Buyers who offer more than they can actually pay

[WeBuiltThisBuffetOnSausageRoll]

After being messed around for months by a timewaster extraordinaire, we said enough was enough and put the house back on the market. Although our 'buyer' cost us a lot of money, the market has of course risen quite a bit in recent months, so that mitigates a lot of it.

We had quite a bit of interest, resulting in several offers - two of which were strong and realistic (not quite the highest), and we've since accepted one, who seems very serious, very keen and isn't hanging around, which is perfect for us!

However, some of the offers we received were from people who clearly did not have the funds available to pay the price they offered, had we accepted it, with their totals of deposits and agreed lending falling short by some way - by £10-15K. Added to this, the property needs work and modernisation, which was made very clear to them (and they would have seen when viewing), which makes it even more puzzling.

Is this normal? What's their game - does anybody know? Are they just hoping that they'll find another £15K down the back of the sofa, be able to twist the lender's arm, tap a family member (for what obviously has to be declared a gift and not a loan), eye-watering credit card cash advances?

I may be being unfair here, but I rather suspect that some of them see their initial task as making the highest offer, so as to exclude the competition and get their foot in the door, but never for one moment expecting to honour that offer.

Whether they're:
Over-optimistic and/or not very good with maths;
Counting on finding something to blame ('requiring' a significant reduction);
Thinking (or planning to gaslight) that the lender's valuation is THE only actual market price (irrespective of competition from would-be buyers in a seller's market), which automatically overrides anybody's offers;
Planning to let things progress a long way before springing 'an issue that has arisen' on you - or just to keep quiet and gazump the day before exchanging contracts (even in a rising seller's market)?

Why do they do this? Do they tend to somehow succeed or just end up wasting everybody's time and money (including their own)? Have you been the buyer in this scenario and how did it all work out for you? What are the worst horrors of this kind that you've experienced - as a seller, estate agent, observer or other?!

We got our current house as we were genuine cash buyers without a chain ( downsizing ) The EA asked for proof of this which we gave. We were not the highest bidders & it was below asking price - went to best and final bids - but we did get the house. I think the vendor was realistic in that we were a bird in the hand not in the bush IFYSWIM. & we offered what we could & said "not a penny more because over this amount we are not cash buyers" . But he wanted to sell & wasn't going to hang on for months and months for the promise of jam tomorrow

@BasiliskStare

We got our current house as we were genuine cash buyers without a chain ( downsizing ) The EA asked for proof of this which we gave. We were not the highest bidders & it was below asking price - went to best and final bids - but we did get the house. I think the vendor was realistic in that we were a bird in the hand not in the bush IFYSWIM. & we offered what we could & said "not a penny more because over this amount we are not cash buyers" . But he wanted to sell & wasn't going to hang on for months and months for the promise of jam tomorrow

That’s a dream seller! I hope for one of these!

@SugarDatesandPistachios - it took us 2 years of being in a small rented flat to get to that situation. But we were firm and had vendor come back and said can you meet me half way between your offer and the best offer we would genuinely have said no. He wanted a cash buyer and we offered the cash we had. ( & I realise we were fortunate in that we were downsizing so had equity ) but we were very firm about our final offer. - Worked out well and love our teeny tiny house.

My mum had a couple of offers on her asking price of 300K "in need of renovation" house, it was priced to factor the work in. As a pensioner looking to move to a more expensive area near me, the £330K cash offer was particularly appealing.

Cue four months of mucking around, suddenly deciding he wanted a mortgage anyway, then right before exchange dropping his offer to £275K. Unbelievably he was a surveyor by trade, but only wheeled out his lame reasons for reduction at that point. Mum told him to sod off, so he came back with a 300K asking price offer and exchange the next week. She accepted this reluctantly. He strung her along for another three weeks and then dropped out completely saying "too much work to be done". I feel sorry for his customers who have him as their surveyor as he's clearly useless!

House back on, couple of offers. One was a bit higher but sounded like scrabbling around for cash was required. The other was bang on asking, with an email written very directly "I want to buy this house, I have the cash, I don't need a survey, and I will not mess you around, I will buy at this price as quickly as possible, you have my word."

And he did exactly that, and she completed last week. Now that is a dream buyer! And we all felt a lot happier that mum's lovely home went to a nice person, not the tosser who messed her around so much.

I may be being unfair here, but I rather suspect that some of them see their initial task as making the highest offer, so as to exclude the competition and get their foot in the door, but never for one moment expecting to honour that offer.

Mostly it's this exactly! But it's the horrid system to blame - that allows then to do it MONTHS into the process! Nowhere in Europe / US this would happen.

I think there can be a number of reasons why people do it as you say - some have good intentions and some do not.

The house we have just bought had a previous sale fall through as the buyer didn't have enough funds to complete the purchase... they had a decision in principle (as you don't need to demonstrate proof of funds for this) and they assumed the vendors would take a while to find a property they wanted to purchase which would give them time to sort out the deposit - unfortunately for them they were wrong!

A friend of mine purposefully over-offered on a house with the view that she'd negotiate money off following the survey to bring it to what she wanted to pay. The vendors told her to do one which meant she'd then lost money on the survey / solicitors fees and was not at all happy happy, however, I couldn't help but think that was the risk she was taking in making an offer she was never prepared to honour.

I think in this market it really is about looking at the quality of the buyer - we weren't the highest offer on our house but we were in a good position with an ok LTV and borrowing a small multiple of our incomes. The thing that swung it for us was the EA really selling to the vendor how much we loved the house. If someone loves the house they are much less likely to walk away / mess you around. A higher offer came from someone who'd just walked away from another sale so the vendor chose us!

The EA should properly qualify the purchaser before submitting an offer. A motivated genuine buyer will have that documentation to hand in order to be taken seriously. We had to provide proof of funds and anti laundering ID checks in order for our offer to be considered.

I think many who over offer do it knowingly. I know someone who made the highest offer at sealed bids and once they had the survey negotiated down to what they were really prepared to pay. Many will work on the basis that further down the line it's just easier for the buyer to drop the price than start again but in a market like now it's less risky for a vendor to just say sod off and put the house back on the market.

I'm always amazed at the way people carry on when house buying. When I've sold houses in the past I've expected to get the price that was offered and we agreed on. I don't care if you decide later on that you want a new kitchen/conservatory and it will cost £30,000 so you're knocking that off the price. Pay for it yourself.

If we ever get round to selling our current home it will need renovation. We know that. It will be priced accordingly and we will only accept viewings from people who are in a position to proceed. And I'm stubborn enough that anyone who came back at a later date with a sudden lower offer thinking I'd have to accept rather than start again would be mistaken.

I'd never do business with someone like that. Any messing about would be enough for me to immediately cut them off and put the house back up for sale. Moving house is stressful enough without dealing with time wasters like this.

Atm the market is such that places are being sold really fast and over the asking price to secure it. They'll find the extra I'm sure.

The buyer of my last house announced on the day of exchanging contracts that they were suddenly thousands short and would I be willing to negotiate. I was already selling at 10% under asking price as I needed to move locations ASAP and they appeared to be a dream buyer... cash, no chain ect. I told the EA to tell them to F off. I was tempted to find them on Facebook and ask if they got a kick out of wasting everyone's time but I thought I best not haha.

When buying a house in 2020 I was 6 weeks into the sale when someone knocked on the door of the house and asked the vendor to accept £10k above the asking price (which I was paying) and she accepted the EA agents warned them not to, she had a low deposit and advised she would have to find the extra 10k as the bank wouldn't lend it to her and low and behold the sale fell through xx

Atm the market is such that places are being sold really fast and over the asking price to secure it. They'll find the extra I'm sure.

But you have no way of knowing which ones can and are willing to genuinely do that and which ones are banking on scamming you further down the line. Even if they can find the extra, they might figure that they'd prefer not to, if they can simply promise it and then later renege on their promise.

Fuel prices have rocketed in the current 'market' and plenty of people aren't just rolling over and finding the extra, because they genuinely can't - so they'll be sitting in freezing houses with empty stomachs, and not a small number will end up dying as a direct result.

Plus, however 'hot' the property market is, most people don't buy and sell properties that frequently, so many may not appreciate that their underhand tactic that worked 15 years ago might well not work now.

When buying a house in 2020 I was 6 weeks into the sale when someone knocked on the door of the house and asked the vendor to accept £10k above the asking price (which I was paying) and she accepted angry the EA agents warned them not to, she had a low deposit and advised she would have to find the extra 10k as the bank wouldn't lend it to her and low and behold the sale fell through xx

Ha - she got exactly what she deserved!

I don't usually mention this, but in fact, I'm actually a multi-millionaire. If anybody wants to ask me what life is like as a millionaire, I'm willing to answer all questions.

Actually, I am very, very much NOT a millionaire (I'm about a million short of it ). But I was able to claim it just then (and didn't need to add this retraction now or at any time). Just like any old liar can offer you £30K over your asking price when they know they have no possible way (or desire) of ever paying it.

People selling their kidneys just to buy a house or step on the so call ladder is probably the biggest problem in the whole chain. And when they finally do, they expect to sell at massive profit to move up, then other buyers come in and can’t offer unrealistic valuation, but they pretend they can. Then they sell their kidneys just to get validation that they managed to buy a house. And it just goes on and on in circles. To a point where terraced shed in London zone 4 is costing 500k :D

And based on mumsnet people are still offering over. However, I had few relatives selling houses in London at this so called ‘hot’ market and it really didn’t go as crazy well as someone tells here.

Some EA seem to encourage this - I've seen two with a default search filter applied on their website with 'tempt me with properties 10% over my budget'. What is the point of that? If they had 10% more then that would be their max budget?!

I also think some buyers struggle to grasp that the house is valued as it is seen, so you don't get to knock money off for needing to install new kitchens, bathrooms etc. The valuations assumes that already. You may be able to negotiate some money off for less obvious things revealed by a survey. In our case it was around £500 for a flat roof that started leaking after house was valued!

We have had an offer accepted on our purchase and had to provide ID and proof of funding before property was taken off market. We anticipated this so had scanned copies ready to go so got it back to EA within a couple of hours.

Some EA seem to encourage this - I've seen two with a default search filter applied on their website with 'tempt me with properties 10% over my budget'. What is the point of that? If they had 10% more then that would be their max budget?!

It's disgraceful, isn't it - and very counterproductive. It's not like a smaller purchase where people might want to spend under a certain amount but can be persuaded to push the boat out a bit more - adding on tens of thousands that people simply don't have is always going to be problematic.

This happened to me! I offered a decent over the asking price offer and they went for the highest one. It finally sold for less than I offered.

We’ve been trying to buy for the last 12 months, we have offered over asking price on 4 properties and lost out on all of them. Every one of those vendors chose the highest bidder, none of them were interested in our situation or how much we loved the house. Didn’t care, just wanted the maximum money.

@Amei

The buyer of my last house announced on the day of exchanging contracts that they were suddenly thousands short and would I be willing to negotiate. I was already selling at 10% under asking price as I needed to move locations ASAP and they appeared to be a dream buyer... cash, no chain ect. I told the EA to tell them to F off. I was tempted to find them on Facebook and ask if they got a kick out of wasting everyone's time but I thought I best not haha.

When buying a house in 2020 I was 6 weeks into the sale when someone knocked on the door of the house and asked the vendor to accept £10k above the asking price (which I was paying) and she accepted the EA agents warned them not to, she had a low deposit and advised she would have to find the extra 10k as the bank wouldn't lend it to her and low and behold the sale fell through xx

Why would the op have accepted a random offer off the streets that was the same as yours?

@Paddingtonthebear

We’ve been trying to buy for the last 12 months, we have offered over asking price on 4 properties and lost out on all of them. Every one of those vendors chose the highest bidder, none of them were interested in our situation or how much we loved the house. Didn’t care, just wanted the maximum money.

This in spades!

Ah sorry you were paying the asking

I’m talking about vendors who are selling for up to £100k more than they paid for the property two years ago. And still want to create a bidding war to get more than the asking price.

I’m sure some vendors are being messed about and that’s not ok. But honestly, vendors hold all the cards right now. Being a buyer in this market is utterly soul destroying.

I would say that how much you love the house doesn't matter to the vendor unless it means you are absolutely determined to go through with the sale - that could be important. If vendors want a cash buyer make sure they are. The highest bid could be pie in the sky.

@Paddingtonthebear

I’m talking about vendors who are selling for up to £100k more than they paid for the property two years ago. And still want to create a bidding war to get more than the asking price.

I’m sure some vendors are being messed about and that’s not ok. But honestly, vendors hold all the cards right now. Being a buyer in this market is utterly soul destroying.

The thing I would say in this situation is that a vendor is also a buyer, in general.

You need to bear in mind that if their 2 bed house has gone up £100k in two years, say - that the 3 bedroom they are desperately trying to bid on has probably gone up more.

Ultimately no one is a winner. People aren't (in general) raking it in from houses because they need to then buy another one, unless they are a property developer. I'll be honest and say I live a very ordinary life and I don't have a single friend or acquaintance who owns more than one property. Most people are either renting or paying a mortgage - and they simply don't have enough left over at the end of the month to have any savings or to build a 'property portfolio'.

At some point we probably need to downsize from the tatty family home we've lived in for 20 odd years. But a bungalow around here would probably cost me £100k more than my family home (which needs a lot of updating) will be worth. I'm almost retirement age - and don't have any savings. I won't be able to afford to sell this house and downsize - because it would cost me more money than I can raise.

I shall probably struggle on, in a draughty Victorian house that's too expensive to heat properly.

Yes, the properties we are wanting are those big drafty period properties! And who sits in them - people over 70 whose kids have left the house but can’t find a nice enough bungalow to move to. Not enough of anything for anyone 🤷🏽‍♀️

It would be interesting to get an EA's perspective as to what they regard as 'proof of funds'.
From my experience, Estate agents only seem to rely on the buyers word & don't request the evidence to back it up.