offering higher than asking price

[Hayleydobedoo]

Hi all,

currently first time buyers, chain free looking for our first house we have big deposit, Despite the current climate we are in houses are selling like hot cakes near us, we have viewed 2 so far offer on one, it got refused, we looked at one on weekend, £410k to £430k asking price, with the last one it was same bracket, we went in at £425 then had one last chance for final bid did £430k no idea what it would have sold for soon find out, anyhow the one on Saturday is only 2 bed but room for extension, we are planning to go at highest asking price then if it goes to final offers we can maybe stretch some more, my question is, i read that people are offering £10 - £15k over to secure the offer being accepted then hoping it gets down valued at mortgage valuation, is this a likely thing to happen? or is there a chance surveyors will agree on higher price you offered... any advice would be great, just crazy right now, lucky to even get a vieiwing with how quick they get booked up! x

not sure why anyone would offer above in the current climate

Do not offer more than you can pay. Depending on area, many houses are exchanging over asking. Lower mortgage valuation does not mean the seller will necessary accept a price reduction because many buyers can pay cash, and people need a place to live.

Don't offer more than you can afford - it's worth looking in a slightly lower price bracket as there's more likely to be something you could afford if it goes over the asking price?

The valuation may come in at a lower value but the seller is under no obligation to accept that, especially if there were other offers. They could simply go to one of the other offers which is more likely to go ahead ok if low LTV or cash buyer.

You'll also be asked for evidence of your offer before one is accepted - so evidence of savings in bank for your deposit and the AIP for the mortgage. So if that isn't enough to cover what you've offered it wouldn't be accepted.

Friends daughter just successfully bid on three bed flat in Brixton last week, no outside space, needs updating. £565 ask she was a winner at £590k. This was third flat she tried to buy, other two also went over ask so she learned her lesson.

The market may be cooling a little now but two months ago places were going for 10-15% not 10-15k over. Often to cash buyers who don't need a mortgage valuation to agree.

People who say don’t pay over asking have clearly not had to buy property in the current climate! A few years ago, most people paid under asking.

We are buying in a very popular area and accepted an offer over on ours by 7k and the one we are buying, which is a similar price to yours, we had to go 12k over. We’ve lost on several others where we have offered up to 20k over.

Neither have been downvalued. If you’ve got a decent deposit it possibly won’t be, the bank just needs to get it’s own money back.

Offer what you can afford and what you think the property is worth. Best and final and don’t get involved in game playing with the estate agents.

Weird, flats in London with no outside space are not shifting and price quite flat for the last few years.

If the valuation is less than you offer you either have to renegotiate the price or meet the extra from your own resources

A seller in a crazy area with other offers on the table is likely just going to refuse to negotiate and, as you say, the valuation may well be the same if the market is rising. I agree, other what you can afford or start looking in a lower price bracket.

Our house went on last month for 450 and sold for 482. Offer what you can afford and what you think the house is worth- but yes- anyone with recent experience of buying in hot areas at the moment knows you need the offer well over asking usually.

OP my son was a FTB with a fixed budget. He tried to buy 11 houses last summer. He offered fap but never got offer accepted. In the end one of EA suggested he offer above asking price. She said at that point most houses were achieving aap offers but being down valued on survey. He took a gamble and did this. He got offer accepted. House was down valued. Seller agreed to sell at valuers price. Not sure if this is typical though. He moved in in late October.

We offered 6% over asking, no down valuation and nothing in survey worth negotiating over.

I think it depends on what is happing with the market where you live. Where we live it appears impossible to buy a house without offering over the asking price. We ended up offering over after several unsuccessful offers on other houses, one person had offered £25k over (!!!))) but we got the house at £10k over due to our circumstances. It is true that if you go too far over your mortgage company may refuse. I would find out more about the market, and what has happened with houses similar recently. As others have said though, dont be tempted to offer more than you can afford.
it also depends how quickly you need to move, because it sounds like things might be changing.

It really depends. I wouldn't offer over your affordability as there's no guarantee it will be downvalued. Or even if it was, the vendor may not want to negotiate with you. You'll need proof of funds before anyway. Also I think it's kind of shitty to do that to vendors.. but can understand when people are constantly getting outbid. Hope things change. We were viewing houses in what was our max budget and offered on two that were on for offers over. We went very slightly over and got significantly out bid apparently. Im guessing one went for 30k more. We then viewed a house comfortably under budget but needs some tweaking for us, which we could do. Our offer was accepted at asking (even though we are in a hot market area too) but they didn't have any other offers, perhaps due to the fact there's some 'quirks' to the house which wouldn't be to most peoples taste. We didn't offer under as at that time it really was a manic market and didn't want to risk them having more viewings and potential offers. So it was taken off right away and I feel like it worked out for the best.

offer way over. just dont cry when it drops in value and interest rates rise and the bigger mortgage you took out becomes unmanageable

it really is not but there's always one person who has to be like that haha

Thanks all for your comments and help i really appreciate it, we have had a offer accepted we was not the highest bidder but had a bigger deposit, this is all new to me let the fun begin

I've just sold to FTB took a 15k drop as I've been wanting to move for years, luckily I got an offer accepted 12,500 under the asking price on the one I'm buying