This "offers over" trend needs to stop

[itsacon]

Back in the day, the seller put a house on the market and stated the price they wanted for it. Usually, you would go and view it and either offer asking price if you loved it, or you might be cheeky and go a bit under. Then the buyer would come back and they'd meet you in the middle.

These days however, the practice of "offers over" is endemic. Estate agents put an offers over price that is somewhat lower, to tempt you in. Buyers then get stuck in bidding wars, you aren't allowed to know where your bid stands in relation to others, and houses are selling for prices wildly over the OO price.

For example - offers over £350k, house is eventually sold for £390k. Offers over £600k, house is sold for £710k. (Real, recent examples from my social circle)

I'd go so far as to say it's an unethical practice.

The next problem with it is at the mortgage valuation stage. These offers are being down valued. First time buyers don't stand a chance, as they don't have the wriggle room available to cover the shortfall. The seller doesn't care as they can just go back to another buyer who was offering a crazy price. The FTB then goes back into a bidding war on the next house.

I just think house buying in England is just an awful situation.

@Greenybluetowel
That’s true. The Scottish system, despite the offers over, definitely seems better to the English one.

The thing that blew my mind recently is that people are doing this for rentals now. What the actual f*$k!

An estate agents job is to get as much money for vendors as possible and if using ‘offers over’ achieves that, then they’re doing a good job. People seem to forget that estate agents are paid by vendors, they are not there to get buyers a good deal.

Obviously you should. The selling price is what matters. Not a fictional asking price. If the final deals are 20% over your max, look for 20% under your max. It’s obvious really!

Yes, this. It's a bit like irritating websites/shops that are targeted at consumers, but still display their prices excluding VAT - you just have to get used to the fact that the price they state needs to have 20% added on to it to see what you would actually pay. If the excluding-VAT price is the maximum you can afford to pay, you simply can't afford to buy that item.

If it's any consolation, it's also a gamble shrouded in uncertainty for sellers and they don't hold all the cards. Just as sellers will give you their minimum and leave you to work out what to offer, many buyers will offer what they think they need to, to get their foot in the door and have their offer accepted over other people's, often with no intention or even ability of paying anything like that price.

I get that sellers' markets are very frustrating for buyers, but the seller isn't a passive party who only exists for you to get a house; they also want the best market price that they can get for their property, just as you want it for the lowest price you can pay.

The concept of auctions has been with us for a very long time, and auctioned lots will frequently have a reserve that they don't even disclose to you; but I don't think many people have a real issue with auctions. Selling a house is often like a mini auction, and there are so many variables, it's impossible to slap a price tag on a house and know that it's the exact 'correct' price for it.

It's galling enough if you sell, say, an old piece of furniture or a bike or whatever for £35 and then later find that somebody would have given you £50; but when we're talking tens - even hundreds - of thousands, people just aren't willing to risk losing out.

This is also why I'm dubious about people who put notes through doors of houses that they would like to buy, inviting the owner (if interested) to sell to them at an agreed value without putting it on the open market and avoiding estate agents' fees.

I know this method does work for a lot of people - buyers and sellers - but I always have the impression that the buyers potentially have an ulterior motive in seeking to be the only considered buyers, with the price agreed afterwards.

Yes, the sellers avoid any EA fees - although buyers will often expect to split this or offer less specifically with this in mind, so that the sellers don't really benefit - but I fail to understand why, especially in a sellers' market, the seller would willingly close off all other potential purchasers and not try to find the best offer on the open market.

Yes, if it's family or close friends, but when it's a stranger who puts a note through your door?!

It kind of makes me think of these high-pressure salespeople who will try to demand you make a decision to go with them NOW by 'assuring' you that they are the cheapest so there's no point whatsoever in you wasting your time approaching any other companies. In contrast, the genuinely best-value ones will give you a quote, happily leave you to think it through, seek out their glowing online reviews and get other quotes, and then wait for you to get back in touch with them when you know they are the cheapest.

@JudgeRindersMinder

It’s how it’s always been in Scotland and it works.

A house is generally only mortgageable to the home report (survey) valuation, and if you want to offer more than that, then it’s your own cash, not mortgage.

There’s a lot more needing sorted out in the English house buying system before o/o can be criticised!

It’s not a good system though. It’s an absolute nightmare buying in Scotland for that reason. Selling favours the seller, but buying is so so stressful.

The trouble is that offers over encourages sellers to be unrealistic. I've seen so many then fall through.

It’s always been like that in Sheffield. A city of weirdness in the middle of a country where everyone else does it normally ( excluding Scotland) it’s hateful!

Houses are routinely advertised below their asking price. Some are currently going over 50k above for a 3 bed semi. I only know this because l know people trying to buy, bigger houses must be 100k over asking price.

When we bought our house, the bank devalued it by £20k.

Thankfully the vendor just sulked and accepted it. She was here when the valuation took place and he said “there’s no way this house is worth that much!”

But she had to sell quickly so she had to take the hit.

Tbh the house is a myriad of bodge jobs and it’s expensive to fix so he was right! Sometimes I’d like to give up, sell and buy a better house but I’m now scared of the whole property market thing

It's awful plus the fact it happens so quick so you now get 1 viewing & 2 days & you can't really think about anything too much.

We were outbid on a house someone bid 15k more than us which was still 45k over asking. The EA then told us they bid against themselves and went up another 15k. How is that ethical?!

I saw one last week that was already over valued & was on for offers over. Even the EA said he didn't expect to get any offers

It's a sellers' market, but the majority of those sellers will also be buyers, the majority of whom will be buying a bigger house.

Exactly, I don't understand why so many fail to realise that ever increasing prices make it much harder to move up the ladder

I agree its very irritating. Unless the price was already less than I wanted to pay I wouldn't bother making an offer.

If my budget is X, then I shouldn't have to consign myself to looking at houses that are 80% of X, surely?

If X is your total budget and you are looking at houses asking for offers over X then you've got no wriggle room. Looking at houses under X gives you the wriggle room you are looking for.

If my budget is X, then I shouldn't have to consign myself to looking at houses that are 80% of X, surely?

It's a tricky one as on paper that's correct but that assumes sellers are realistic, which isn't often the case.