Buying first property

[ABCDE01234]

We've been looking to buy for over a year now and nothing has popped up that we both liked until now.

We have found our dream home although it has proven to be very popular and the property is now going to a closing date.

First time buyers so not 100% clued up about the whole situation but just looking to see if anyone has any ideas or been in this situation and can tell us what the best offer amount would be to try and secure the property.

Property marketed at offers over £160,000. Home report states £165,000.

We did offer £160,000 but I feel like of this is the property for us then we're going to need to go higher but I just don't know how much higher because we don't want to end up paying over the odds.

TIA

I think, if you have the money, and this is your 'dream home' - added to the fact that you haven't seen anything you like in a year - I would offer whatever you can afford.

Yes, we all like the idea of a bargain, but you don't seem to have so far. You seem to have been looking for something really specific, or you would have found something to offer on before now.

If it is that specific, then how likely are you to find another home you both love, in the next year ?
IME, most people, when they feel the time is right to buy (and have the money - deposit and mortgage - in place), tend to find a home they want to put an offer in on a lot sooner than 12 months down the line, but you haven't, which suggests to me, if you let it 'get away' you will really regret it.

Trust me, 5, or 10 years down the line, the extra few thousand will have been forgotten, but if you are still living with parents or renting, you'd likely wish you'd used the money you had.

Are you in Scotland - with the mention of a home report, was the home report carried out on behalf of the vendor ?

So even if you are not in Scotland, the 1st figure that came to my mind was £167.

It does say offers over - yet again that is a very popular way of selling in Scotland, and at one time it was ' known ' that offers over would be by x% at least. What x% would be these days I don't know.

When you say there is now a closing date - is that for bids or sealed offers ?

I understood years ago that sealed offers were a ' surprise ' to the Estate Agent on the day and the property would be sold to the highest bid, the reason they were sealed was so no one knew how much was being offered by others.

But it has been many years now since I have bought or sold in Scotland, and if this house is not in Scotland then I may have totally wasted your time.

Oh ! I just remembered on a similar post the other day or so, someone suggested finding the ' sold ' prices on Right Move / Zoopla and that may give you an idea of what the property may go for ? be worth ?

Now that only works if the property has similar properties nearby, if it were a ' unique ' property or a one off then it would be harder to guess a sale price.

Bottomline is - how much can you afford to offer ? and remember there are costs involved in purchasing a house ( tho I don't think you pay stamp duty at that price range ? )

If you're in Scotland with a closing date if you don't offer at least home report value I think you stand no chance. I think they should be able to tell you how many letters of interest or offers they had. A closing date usully implies a few. It's been a while since we bough.

How much over home report you need to offer will vary hugely by area and popularity (it could be as much as 15-20%, but maybe it's not so crazy anymore). What you need is a local solicitor who can advise you. Or you could try your luck by posting on Scotsnet and hope you find someone local who keeps up with prices.

@Callisto1

I had wondered about the % these days. So an 18% above offer of the home report would be roughly £195 ( I used 18% as it is neither 15% or 20% )

I think your suggestion of Scotsnet is brilliant !

I'd start by working out the max you can afford. If it's really your dream house, you'll surely rather shell out another 5-10k rather than miss out on it.

Assume you're getting a mortgage? If you go too high, there's a risk that the bank could say 'no, it's only worth (eg) £165k and we'll only give you a mortgage for that'. Is the house in good condition? I was in a similar situation and offered asking price. We got the house, but the bank downvalued by £5K on account of some work needed. We ended up covering that ourselves (although it's also possible to ask the seller to meet you halfway or lower the price).

By the way, I would definitely submit your offer with a little info about yourselves. In your case, you're first-time buyers, which means you've got no chain. That's attractive to sellers. You might even add some detail about why you love the house. Just something short.

How much will you be gutted if you discover it sells for, and you didn't offer that much?

We over paid for this house. But we knew it was what we needed - and everything else with the configuration we needed was 200k more. So we offered 7% over the first weekend it was on the market - and got it. We've have been cross with ourselves if we'd offered less and missed out. The extra was worth it to get a house we wanted.
Been in 18 months. There has still not been a house we'd have looked at in this price bracket come on the market. We'd have needed to find 200k.

The bank will probably accept the home report value for lending (ours did). This means that anything above that value has to come from your deposit.
Local solicitors should give you a good idea about what % over will get you in the race and what % over should win it. They also submit your bid. The trouble is that you often have to bid too high. Maybe the recent interest hikes have calmed things down.

@NewName24 we have both been looking for certain things within the home. We have young children so really been looking for somewhere we can just move straight into withouy having to do much work and this home is that.

We have viewed a lot of homes but some outwith the area we want, some have needed a lot of work whereas this home is in the area we would like and doesn't need any work done straight away for example the boiler etc still has warranty so we have time to get in and settled before having to worry about fixing certain issues.

@OlderGlaswegianLivingInDevon yes we are in Scotland, yes the home report was carried out on the vendors behalf, the vendor is still living in the property also so the home report wasn't a full report as there was some things they couldn't access due to fixtures and fittings.

After speaking with a solicitor he has said that it won't go to negotiations so I think the vendor is just going for best price which is why I'm worrying a bit because I don't think we will be told who has offered what giving us the option to go higher.

I have looked at house prices and 8 years ago the property sold for £140,000 I haven't checked neighbouring houses but will do that just to see.

@Callisto1 thank you I haven't heard of Scotsnet so I will try there also. We are in talks with a solicitor just need to finalise a few things with him today.

@falafelover yes we are taking a mortgage and this was something else that I worried about by going too much over asking. We have been renting for years and we have the deposit but not much more in the event that the morgage lender says you've offered too much so were not paying the extra £5,000.

Can I add info about us to the offer? When I called up to make the offer she just said she would pass it on to the vendor but didn't give me any information of what I could say or do. We are hoping to possibly go back for a second viewing to speak to the vendor to try and work out how much they are wanting and to sort of make them aware that we are really keen.

@SnowsFalling it fills everything that we have been looking for and DH said walking out of it this is now or never this is the one so I think he feels exactly the way I do in terms of it being our dream home.

@ABCDE01234 if it's gone to final offers then there will be no negotiations. You make your best offer and win or lose.
You could include some details about you, but I would say if you really want this place you need to bid high. Your solicitor should find out how many bids they have and how many letters of interest they received before going to final offers. This will give you an idea of how many offers you're competing against.

To give you an illustration of this process. We were looking at flats in Edinburgh. In our area they went for 10-15% over the offers over price (we couldn't check home report on the historical listings). Then there was 1 flat who went for 19% over because it was ground floor with a good layout and access to a very pretty shared garden. So your most important job right now is to work this out for your area so you can submit a reasonable bid and not be disappointed.

@Callisto1 I have had a look at neighbouring properties and the most they have sold for is £140,000 no property has gone as high as £160,000. We are looking at a 3 bed and 1 4 bed went for £155,000

How recent are these sales @ABCDE01234? If they're recent (2023) and similar then it's very weird that the home report suggest such a high value. Why do you like this place so much? Has it got something the other places didn't that justifies the price? Honestly without the local knowledge I'm just making wild guesses.
Find out how many letters of interest and current bids they have. That should at least tell you if you're competing against 1 or 10.

@Callisto1 a few recent a few going back to 2019. The bedrooms sizes, the storage space, the garden space literally everything. We have found properties which have everything we need inside but didn't have parking, the ones with parking weren't spacious enough inside and the ones with both needed some upgrades but with 3 you g kids we really need somewhere we can get in and settled before having to make huge upgrades and this home is perfect for that. I will give them a call and see if I can get this info.

in our area of Scotland it’s usually:
offers over +10% = home report
closing date bids =home report plus 10%

depending on your area of Scotland prices from 2019 could be 1/3 less than now.

if it’s closing date bids you need your solicitor to make the bid formally.

and no it doesn’t go to a bidding war - highest bid wins. You could miss out by £1 or £15000

@Answersunknown so what would you say would be an ideal offer based on the

offers over +10% = home report
closing date bids =home report plus 10%

As people have been saying - it would just be guesswork.
What you have to work out is what you can afford to pay, and - if it is "the one" offer that.
That is the case in all housebuying to some extent, but sealed bids for final offers are just that. You decide what you are willing to pay, and offer that, whilst hoping no-one else offers more.

@ABCDE01234
that would be guesswork, you need to know the area, the popularity and recent sales.

what is it worth to you? That’s your starting point and when is the closing date?

OP, you don't sound as if you really want to pay £160k let alone more, based on your comments about previous sales in the street.

You need to have a think about affordability and your priorities. What matters more, a bargain or securing your dream house? (Having said that, you shouldn't ever consider bidding more than you can comfortably afford!!!)

If this house really is as unusual as you say then how would you feel if you lost it because you only offered £160 or £165k? Would you feel happy that you gave it your best shot? Conversely, how would you feel if you won the house but had to pay £170k, or £175k? Would you be happy paying that much for your dream house? Would paying that much make you feel nervous? If so, you have your answer about how high your bid should be.

It sounds as if it's had a fair bit of interest so honestly, it really doesn't sound as if a bid of £165k will win. Regardless of what other properties have sold for, if other buyers are willing to bid more, that's what matters here. Also, I can't emphasise enough that prices in 2019 will be significantly lower than current prices - you really need to look at sales within the last 12 months. The housing market has been mental.

We were in a sealed bids situation last year and thankfully won, but it's really bloody stressful. There's no chance to increase your bid - you put in your best offer and they pick. Our seller said they took our personal circumstances into account but I'm not sure how much difference it made as we were (just about) the highest bid too.

We were looking for a very unusual type of property and I don't regret for a second paying over and above the original price. It was listed at £250k but we offered £267,500.

OP, if it’s offers over £160,000 and it’s gone to closing date, there’s no way in hell you’re getting the property without offering over.
Depending on location, the type of house, size of garden and its uniqueness, some houses are still extremely popular despite the overall market fall. The fact there’s a closing date means they’ve had a number of notes of interest and possibly offers already.
A house that recently went on the market near to me was on for offers over £285k. Closing date was set within a week and it sold for £335k. A house on my street went up for offers over £225k in November, sold this week for £266k after going to closing. Of course every single home is different, but £160k isn’t going to cut it, so you’ll have to think carefully about its worth to you.

Just watching Location Location Location as you do :)

and am curious if indeed you offered again on the property ? and when the closing date is / was ?

otherwise have you found anywhere else ?

We did infact increase our offer by 8% over asking and we were unsuccessful we haven't found out how much exactly as its STC but the solicitor told us that it went for significantly higher than what we had offered and that we were 3rd offer out of 4.

Will be keeping an eye in the hope for an update of how much it went for.

Also sorry should have said that we are back looking but there is nothing that interests us at the moment. Currently checking daily 🤣

You offered 8% over £160,000 = £172,800 ?
or can't I do figures any more :)

and you were 3rd out of 4 ? does that mean 1 offer was lower than yours, and 2 were higher ?

OP Just one tiny point about sealed bids. A few years ago, I was the executor selling a probate property - highest bid to win it - and the person who purchased the house told me afterwards that he had offered what he wanted to pay plus - I think - £50. For example, he offered £160,050 rather than £160,000.

That meant that if someone else had offered the same round figure (£160,000), his bid would have been the highest at very little extra cost to himself. It's a tactic that does not always work, but it might just be useful to bear in mind.

@OlderGlaswegianLivingInDevon your correct we offered £172,800 one bidder below up with a lower offer and 2 bidders above with offers higher than our.

We weren't told how much higher bidder 2 went so could have literally been £173,000 but we were told the winning bidder was significantly higher than ours so seemed like we would've have probably had to go around 10% over asking possibly even more.

@nameXname we honestly weren't planning on going much higher than asking but after speaking with the sellers they advised that someone had verbally offered £167,000 and because we wanted the property we went up to the 8% but it still wasn't enough unfortunately.