Adding ‘or 5k higher than top bid’ in best and finals

[KimGa]

We’re going into (another) best and finals on Monday. It’s on for 450. We’re planning to offer 531k because in our opinion it’s been undervalued, should be 500k so we are taking that and then adding another chunk to try and beat the competition as is required where we are.

We have been looking and offering for 6 months this is the best thing we’ve seen that’s in budget. 30 other people viewed. The figure we’ve decided on leaves us 28k to hopefully put in new kitchen and convert garage to office, both need doing in time though ideally sooner rather than later.

But maybe it still won’t be high enough. Another thread I saw on here ages ago mentioned putting your offer in followed by ‘or 5k higher than the value of the highest bid up to…’

Has anyone done this? Are you allowed? I feel like offering 81k over asking ought to be bonkers enough, but we are so desperate to get this one (we won’t get school catchment we want in time if we don’t) that I’m thinking about saying ‘531k or 5k higher than the value of the highest bid up to the value of 559k and forfeiting improvements budget necessary. But will the agents ignore it or take out offer as 559?

I know we’ll never know what others below us would have offered but even offering 531 could be massively overpaying. It’s so difficult to know.

Last time we lost nearby we put in 541 house was on at 495 we were the second highest bidder.

Well you'd have to put a top limit though otherwise it could end up being well higher than your budget.
The whole point of best and finals is to stop the negotiations. So if you say £5k over best, the agent will still have to check that you could pay that, then you either say yes (fine) or no, then he/she has to go back to other bidders etc. defeating the whole purpose of it.
As for offering over - my friends daughter had to go well over ask a couple weeks ago for the flat in London she's buying. After three best and finals that went well over ask she didn't want to risk missing out again.

Also doesn’t the agent legally have to put the bids to the vendor? So the vendor will also know your top amount?

Entirely your choice, but not a decision I would make in a cooling market. Depends on how much you want the property, I suppose.

EA commission will be a % of sale price.
So it's in EA interests to get a higher price.
EA is controlling the process and the information bring shared with a group of bidders who can't make independent contact with each other.

And that dynamic is all you need to remember when dealing with EAs.

Proceed with caution.

Very much this.
This time next year the CoL will be biting hard and we'll be living with higher interest rates.

House prices will pop from the current bubble.

Thanks for all the advice. Think I will leave out the ‘or 5k on top of highest bid’ part as agree it is trying to cheat the system and I don’t think I’d like someone saying that along with an offer on my house, if the EA actually relayed it.

We plan to go on 5 year fixed mortgage wise and have built a large buffer in each month to hopefully cover cost of living rises. Fully expect house prices will fall, but we need to move now and intend to live in it indefinitely, so we feel like going way over with an offer is the only way to make this move happen.

I’d just go in with the absolute most you would be happy paying for it. Though only pay what you’re comfortable with and don’t think about what others may put in. They may not be starting from your view of it being undervalued and only adding a bit to what it’s listed for. I wouldn’t do the whole £5k above highest up to X suggestion.

We’ve finally found somewhere after looking since we sold in feb. Miraculously we have managed to secure it for asking because it’s a bit quirky, perfect location though. Till then we were offering £50-60k above and missing out each time. Like you, we need to be in right school catchment, which makes it tougher.

good luck

I swear I would never manage to buy a house in that climate. The thought that you could be paying £50k+++ over what anyone else would have paid is mind boggling.

It’s a difficult one, when you need to move in a difficult market. Good luck.

In the end I kept talking to the agent to try and get a feel for the number of offers coming in and whether any of them started with a 5 etc right up to the deadline and he gave us the best advice he could without talking actual figures. He wasn’t the agent we sold through but knew us from various viewings which was helpful. We offered 511k (so 61k over asking) and….won! So happy. And much better than the 81k over asking we were considering yesterday, so even though it’s bonkers it feels slightly less bonkers.

Well done.

Fab news OP well done!

Its mental at the moment. I had to offer well over the asking price to get out of rented. Losing out again (like others missed out on 3 others!) would have put me at risk of rent rises anyway, and this is a long term prospect so can afford price to go down initially. I plan to be here for the foreseeable.

Well done OP, really pleased for you. If you’re there as forever home, can afford it and it works for you, don’t stress about about the price paid.

Bet the relief feeling is great, I’m still feeling it a week on from finally securing a place.

@KimGa

congratulations!!!

let us know how you get on!!

Congratulations OP!

I don't think this practice is allowed in Scotland, or at least I've not heard of it being used. We have closing dates so regularly that it would just end up being a standard clause from every bidder.

The last house we saw in that price bracket was offers over £445k, valued at £450k. It went to a closing and sold for £612k... Wouldn't have been so bad except it wasn't even habitable! Needed £200k of work immediately.

No real sign of the market significantly slowing here (Eastern Scotland). I keep hoping it does.

We are in the SE.. everything is either sitting stale or being reduced

Just bear in mind that anything over what the mortgage provider values it as, they won't lend on so you have to pay it upfront in full, in addition to your deposit.

Thanks for the congrats. We’ve been in this game since Feb and it’s still hot where we are - we lost our first buyer so had to find another this month and though it took two weeks not one like before we ended up with 3 offers to choose from again. It’s even hotter where we’ve been trying to buy in the popular school catchment.

We know down valuation is possible and are prepared - we significantly reduced the price of houses we were looking at to take into account needing to cover this and the effect of rising interest rates on monthly repayments.

You say in your opinion it has been undervalued but have you had this place independently valued? How did you arrive at this £81k extra figure? You are deep into the property rabbit hole here. I'd take a very deep breath and pause before you commit to this.