Going over asking price by 150k…stressed!!!

[MovingandStressed]

Hi all, I need someone to calm me down! We offered in March on a property that we loved, asking price 700k and because there was so much interest (think could barely get a viewing etc) we offered 150k over in a sealed bid process to secure it. We were told after we won the bid by the agent that someone actually went slightly higher but they wanted to sell to a family.
Now the market has gone down considerably since then, we had got a really good offer on our house (also paying over asking) but they have now pulled out and we are looking to have to reduce our asking price by 50k. Fortunately we can borrow enough to allow us to buy the property we like before selling ours (paying an absolutely extortionate mortgage in the process).
Now massively panicking that the price we are paying for the house we love is way too high in todays market (it’s a very lovely location - bit of a one off - which is why all the interest). We would intend it as a forever home. Needs oodles of work extensions etc and totally gutting (we are used to doing big projects but this time I wouldn’t have the intention of moving!!), but the plot is fab and I love it. In terms of buying the property, if we had sold this, we would only have a tiny mortgage, but we need a bigger one for all the extension work, but still half what we are currently paying, so the interest rates don’t worry me tooo much. I want a good investment though and I’m getting really nervous about the fact that we are overpaying asking price hugely for this and that they probably wouldn’t get that in todays market.

help!!! Do we renegotiate the price?

Particularly amused by the infiltration theory 🤣🤣🤣
on to more sane posts….
there are such a wide variety of responses here that it’s helpful to see that there are others who think that it’s not quite as simple as we are offering over - either yes it’s a good idea, no it’s a terrible one. Seems to be more nuanced than that and this is where I am getting stuck
If we lost this house then I would be upset but I’m a realist and have moved enough to see that there are always others, but it’s the potential that it has which is special and would be an amazing family home. It’s also walking distance to elderly family which has a value in itself for the future.
@ajandjjmum very reassuring that you overpaid in 1996 by an amount that’s probably the equivalent then of what we are doing now and you don’t regret it.
It does concern me that we haven’t sold our own house and don’t know what it will eventually sell for.
@Mildura glad you know others who have offered over a similar amount and it’s not just us! Also - you’re absolutely right, we would never buy a fully done up house to someone else’s taste when we can have something we have designed ourselves - I seem to love the pain of a project 🤣
@Sunflowering thank you for the reality check in current building costs. We finished our current build 3 years ago so I am v out of touch with current costs. Was mentally budgeting 250kish in 3 year old pricing for what we need to do to this house. Would that be 350 in todays money?😭 I still think it would break even (just)

Just because the market is falling generally doesn't mean that there isn't still massive competition for certain houses. We're currently buying and although some houses are ending up being reduced or being on the market a few weeks, there are still places going for way over asking too.

What's so good about the location?

Was 700k price right in the first place
a lot of the time they start with an unrealistic low price to encourage a bidding war

Someone else offered more than the OP

Im not sure its accurate to say it was 'too much' because houses are only worth what someone is willing to pay.

I would be reducing my offer but you seem to love it & can afford it so you need to weigh up that. I wouldn't see it as an investment though.

This is very reassuring. There are houses in the same area which are sitting for quite a few weeks (which they probably wouldn’t have done earlier in the year) but they have aspects which are not ideal which may explain it, that’s good to know that more desirable houses are still going over asking, I wasn’t sure that they would be in the current climate.

Couldn't be arsed with all this tbh.

I think it's absolutely crazy to buy a house for so much that actually needs gutted.
Of you can afford to do that, I'm sure you'll be fine.

It is possible to walk away in scotland until the point the missives are signed . I have done it twice.

You will 100% lose the property. If that is what you want, go ahead!

This, I'd never do it again, the EA's play too many mind games and make people go silly.

It’s standard in Scotland. Particularly in desirable areas.

Ours, now we’ve renovated, is over the ceiling price for the street. But we’ll be here 10 or more years, it’s perfect for us, and our mortgage is small and will be paid off before we retire at the end of the fixed rate.

when we sell we probably won’t get back what we’ve put into it but will have had the benefits of it. And we are most likely to sell to downsize…

im ok with all of that. And it’s a very sellable house in a desirable area.

If someone else offered more you probably did pay the market rate at the time. House prices may drop just now but are likely to go back to previous levels in time.

If you love this house and can afford it, buy it.

@Elasticrebounding I’m also of this opinion that prices will get back there eventually, I was particularly concerned that we would be selling at the current lower prices and buying at a price agreed before the market really fell, but we are now hoping to keep our existing house and rent it out to sell it when market picks up (as we have had it on market and can’t sell it as it’s pretty dead round here, even having done a drastic price reduction, and it’s a desirable road in a good area). If we keep the house for now and sell when market improves then hopefully we won’t lose out too much. That’s if it all works out as we’ve had a big delay with everything!

@BarrelOfOtters pleased to hear that you don’t regret your decision, we will also be here for 10 or so years, maybe more as need to wait for the kids to finish school. Im hopeful that the benefits of the house will outweigh possible theoretical losses!

If it is a "forever home" the negative equity doesn`t matter?

"House prices may drop just now but are likely to go back to previous levels in time"

Previous levels for normal borrowing rates maybe, that would be a big drop from here, the zero rates/QE/General money printing to support bonds etc. experiment that brought us peak prices in 2021 will never be repeated in our lifetimes IMO, FAR too much inflation risk going forward now.