Making an offer on a house already under offer

[bettyboo4]

We’re first time buyers with no chain and viewed a house in last year that is our dream house but because of my fiancés work and family/life issues we had to hold off the buying process for a few months.

The house had been on the market for over 5 months before going under offer 2 weeks ago. Shoot me but we called yesterday to put in an offer for the full asking price, cheeky I know and I do feel bad but alls fair in love and property until contracts are exchanged any why shoulder the owner get the best possible price for their property. Not something I would have done on just any house but for us personally this house ticks every single box and more and I genuinely know if we don’t get it we won’t get close to this again.

The house price is higher than most in the area because of the street it’s on and has less/ smaller rooms than other houses that are cheaper in the area (but perfect for us). I assume that’s why it was so hard for them to sell given the price. The owner told us they had an offer on the table for 10k under the asking price and given it was on the market for so long I assume (only assume but they might be wrong) they’ve had to accept a lower offer.

The estate agent sounded shocked and said this doesn’t usually happen but also sounded surprised we was putting in an offer for the full asking price. What’s the likelihood they will accept given we have no chain and potentially a higher offer? Waiting for a call back from the estate agents today after them putting our offer to the owner 😬🤞🏼

Still a shitty thing to do though isn't and you know it 🙂

Good luck in all your future endeavours OP 👍

Hopefully someone will do the same to you

It certainly doesn't always work like that. We are mid way through a house purchase, our finances were checked prior to viewing so no checking needed after. At the two week point we had absolutely instructed solicitors and paid for searches.

@hummingbird12I actually didn’t think it was a shitty thing to do until I came here 🤷🏻‍♀️ But please bare in mind this is the first offer we’ve ever even made on a house and have zero experience with how any of this works. Google said it was fine (😂 I know) as I wasn’t sure if it was even a possibility. What's the difference of a house going to auction and being outbid right before the hammer?

Same here. Our checks were done the next day after the offer was accepted, surveyor had visited and prepared report within 5 days, solicitors had already been contacted when we started viewing houses so lots of admin had been done before we offered and within the week almost everything had been sorted and we'd been invoiced by surveyors, entered into conveyancy payment package with solicitors etc.

Then the EA should have had it marked as Sold subject to contract.
Not Under Offer

I had two offers on the table for my house, but one viewing had been done unbeknown to me by an estate agent when I had already accepted a lower price from another buyer. the difference was 5k and I gave it consideration knowing that it was 2k above what I had already paid for the house, but in the end I went with the lower offer because I didn't want to inconvenience the buyer whom I had already negotiated with. The other buyer was a cash only one as well so they wouldn't have had to go through with a mortgage application.
OP you as a buyer putting an offer in wasn't wrong, and the seller accepted it presumably knowing how far along they had been negotiating with the other buyer.

What's the difference of a house going to auction and being outbid right before the hammer?

If this is a serious question, the auction process is very different, with more information provided to buyers upfront and there being a meaningful financial penalty if you pull out after your offer is accepted. This is different to the normal house buying process and is why auction lots are often bought by developers who have more cash to hand.

If your finances were accepted in a day then either
you had cash
or
you already had a mortgage sum already agreed in principle and your offer was within that.

Going to auction you know the risks of being outbid. It's a completely different process.

You said yourself you EA advised this doesn't usually happen. Because it's not the done thing!

We are 4 months into buying our next home. 2 weeks in we had absolutely fully committed to the process. If someone came along then and gazumped our offer I'd have been devastated.

The better thing to have done would be advise the EA of your interest and if the sale falls through for any reason could they give you first refusal and save the vendor re marketing.

The EA has to let the seller know there is another offer in, but they are told to advise not to accept.

As if!!

We had an offer over £150k more than our proceeding buyers and refused it, knowing that if they fell through we could go back to that one.

Your sellers morals are shady at best so hopefully there are no hidden issues.

They should have refused.

Except an EA is under contractural obligation to notify the seller of all offers and interest made irrespective of what stage another buyer maybe at.
That decision is the sellers to make, not the EA.
They must inform them

Ours is marked as under offer, though we have paid for a survey and up front conveyancing fees, we haven't actually seen any paperwork yet though. Should we be SSTC

Assuming both parties have signed the Sale Memorandum then yes
I would insist the property is marked as SSTC

under offer means others are more likely to view and offer.

As an aside if you’ve booked surveys etc push your solicitor to get the sellers to fill out all the sellers forms etc. It sounds like you are more invested than the sellers or indeed your solicitors.

This is right, when we were in a similar position to @bettyboo4 we had to persuade a reluctant agent to put the offer forward, but they do have a fiduciary duty.

This was my thought too. If your mortgage provider undervalues the house by 10 or 20k will you have the funds to back up your offer OP?

This happened when we sold our house - received a full asking price offer (great!) and then our FTB mortgage company valued the house at 10k less. We couldn't reduce our agreed price as we'd made an offer on our onward purchase based on the agreed sale price for ours. Was all very stressful!

In your position I just don't think I'd be able to trust that the seller wouldn't walk away from you before exchange given they've done it now to accept your offer. (What's to say the original buyers they accepted won't offer a higher amount in a few weeks to get the house 'once and for all'? I think the stress of that would end me!)

A lot do not do that until you have exchanged. It is company policy and "insisting" makes no difference. I have found this both with the agent for our sale and the agent for our purchase.

Business is business I suppose.

The OP’s gloating isn't needed though.

Of course, someone else could view your dream house in the next weeks OP and make a higher offer. Pity about your survey and search fees, and emotional investment.
You already know that your vendor doesn't have a strong moral code so know what the outcome could be.

And to add (as I do take on board you've said you're new to the buying process and this is the first time you've offered) but to give some context of people's reactions: Two weeks into our purchase we'd spent £2k on solicitors fees and £1k on a survey. All non-refundable for buyers. This is what the people who have just learnt they've been gazumped may have lost, in addition to the sadness of no longer having the house. It's why gazumping is generally seen as a low move to make.

Yes of course the EA has to tell them.
The EA isn't at fault they have a job to do.

Once you’ve exchanged it is no longer Sold Subject to Contract as you have passed that stage completely.
SSTC is the stage that all the legals are checked
Once you’ve Exchanged that has been completed.

An EA that doesn’t understand the stages in buying is hoping someone will come along and gazump the buyer. Usually an EA that’s getting a % of the purchase price or perhaps if the offer is low or because they are just a bit useless.
They are certainly not complying with the true stages.

That is the OP does go ahead with the purchase. Sometimes they are time wasters.

Same for us. It's no use insisting that 2 weeks is not that far into the process. We had appointed a solicitor within 24 hours and booked the survey about a week later. We'd have lost money if our vendor suddenly accepted another offer. So there is a consequence to your action - definitely an emotional one and possibly a financial one.

I also second what's already been said on here about the mortgage valuation. There's a lot of down-valuing going on right now. This is fine if you have a large deposit or equity that can make up the shortfall, but if you are near your limit, offering more than what anyone else has been prepared to offer when it's been on the market for a substantial period might not be the wisest move.

What you did was the equivalent of waiting until the auction ended, then walking up to the seller and differing a bit more while the original buyer has already paid their auction fees

Well as a buyer, I wouldn’t have put an offer in. As a seller, I wouldn’t have accepted the new offer. Just decline if you want to try and get more money for your property. It’s not difficult. If more people behaved like this there would be less ‘ gazumping’ going on. It must be so difficult for people who ‘lose’ the dream home they were going to be buying.