Asked to give a best final offer, is this common?

[Specksofwhiteallaround]

DH and I are first time buyers nd have just started looking and viewing homes in the past two weeks. We viewed a house that was asking £325k on Friday, the photos were a bit misleading and the house needs a lot of decorating (door frames were peeling, they’d plastered over what look like a couple of large holes in a couple of rooms and not painted over them, bit of damp in a cupboard and the stair carpet had been shredded by their cat, that sort of thing.), and it needs two new doors, a single plus french doors, plus some windows replacing. The house is very over priced, no other house on the street has gone for more than £280k and some were bigger and done up to a higher standard. We decided that it would suit our family but it wasn’t worth the asking price so offered £285 thinking that if they negotiated up to £300 that would be acceptable, we wouldn’t be upset if we didn’t get it.

We got a message from the agent the next day saying that they had passed on our offer but let us know that another offer had been made. Thirty minutes later we got another email saying that due to the interest they want us to give our best and last offer on the property by midday on Wednesday. I was a bit surprised by this, I had assumed if more than one offer was made they would decline or negotiate each offer, this sort of feels like they’re using the power of FOMO to get us to over offer on what it’s worth.

Is this a common thing for sellers/agents to do? Has anyone had any experience of this?

I’m definitely guilty of over thinking it. The estate agent said they had found a house they want to move into and it did seem they may be in rush to sell but it was also priced well over the average for the street. They’ve installed a really nice looking new kitchen but half the house doesn’t have double glazing and the back door looked like it’d been kicked in, they’ve filled in a load of holes but not painted over it so was bare plaster all over the place. I guess if they had time to wait they’d maybe have sorted some of that stuff out. But it doesn’t make you want to pay over the odds, the doors and windows alone is £10k of work to do.

It could be the EA knows the other buyer and was trying to put you off so the other person could get a bargain. It does happen.

The mortgage issue with it being over priced is why we offered less as well as other previous sales in that street. I have no idea why they’ve priced so high, it is the only house currently on that street for sale but it’s not a particularly desirable street or anything. It’s a spacious 3 bed but there are equally spacious 4 bed houses in the immediate vicinity priced around £350k and not needing any work so not sure what the thinking is on price.

You’ve kind of answered your own question here. The other buyer doesn’t need to have offered much more than you. They might have only offered 290k. If you were prepared to offer that much, there’s a good chance they would have been too. I imagine that’s why they’re giving you the opportunity to up your offer.

I wouldn’t offer over what you think you can genuinely pay or what it’s worth unless it’s a street where nothing tends to come up and stands out as suiting your needs. If you think £285 is that , then I would stick at that unless you desparately need to move

Remember that estate agents lie a lot @Specksofwhiteallaround.
There may have been another offer but that is not certiain. If there is another level, it seems likely that it is at the same levels as yours or very similar. Otherwise, I would have expected them to have accepted the other offer. It sounds as if they are trying to encourage FOMO sentiment here, as you have said.
I would stick to your guns and not offer more as it sounds as if the house is very over priced compared to others in the area in a very slow market. If you do increase your offer, it may well be downvalued by the lender later anyway.

If that was the case, they could have just said so. Presumably, both offers are on the lower side compared to the asking price and they are trying to create a competition in the hope of raising the price. This might fail badly in a slow market, as described by the @Specksofwhiteallaround

It’s a spacious 3 bed but there are equally spacious 4 bed houses in the immediate vicinity priced around £350k and not needing any work so not sure what the thinking is on price.

And yet here you are making an offer on the house, showing that there is clearly interest in it. There are probably others like you. When we sold our house recently, we went to best and final offers after one Saturday. We had 3 offers and we didn't want to wait and protract the process and we needed our house sold before we could make an offer on a house we wanted to buy. You never know what other people's motivations are. Just give them your best and final offer and if you don't get it then move on to the next house. It's really not an unusual process these days.

I wouldn’t increase my offer at all, and I’d be getting a Level 2 survey at least before exchange.

I think I’d probably wait for a different house TBH.

I’ve had similar make your best offer nonsense from an estate agent before, and for that one there weren’t even any other offers 😄. No thanks.

This is true. It will be interesting to see if the seller does accept either offer in the end.

Just out of curiosity, how close were the offers to your asking price? To be fair I was asking if it was common as I have no experience of buying a house, so happy to be told it’s common.

We got a message from the agent the next day saying that they had passed on our offer but let us know that another offer had been made.

Hang on a minute. The other offer could be 20k less than yours. Don't assume they've offered more!

This could just be a tactic to get you to raise your offer. If it really needs that much work it's unlikely someone has gone in high.

One of the questions we need to provide an answer to is will we be needing a survey, I hope this is a standard question in this circumstance as of course we will be asking for that. Not sure in what circumstance anyone will not need a survey to be honest.

Two were asking price, one was slightly under. In the end two parties ended up increasing their offers to over asking. We chose the lowest of the three offers but we felt the buyer was the most committed one. We chose based on enthusiasm and we were right because our onward purchase fell through and our buyer ended up having to wait for us to find another house and start the process again. There is something to be said about showing commitment and enthusiasm, it's not just about the money because at the end of the day £10-20K won't make a huge difference to someone's monthly outgoings, but showing how much they want a house can actually get them that house. In England house buying is a long, protracted and frustrating process when chains are involved so a committed (and chain free buyer) is like gold dust.

Rightly or wrongly it does feel like they’re trying to get one of us to over pay in fear of missing out which does rankle a bit with a house that’s so over priced to begin with. They’ll have to hope the other buyer is susceptible to fomo as we’ve only been looking for two weeks and we currently rent so we’ll just keep looking, definitely no compelling reason for us to up our offer by much. If the other offer stays low they’ll presumably have to wait for better offers anyway.

That would concern me. You could say that you are not going to have a survey and then later you could 'change your mind'. That way, if they are only accepting offers from people not intending to have a survey, you will still be in the running.

However, I would be wondering why they don't want a survey done on the house.

I'd be tempted to put in a lower 'best and final' offer now and be prepared to walk away.

"The house is very over priced, no other house on the street has gone for more than £280k and some were bigger and done up to a higher standard. "

This is something you really need to think very carefully about. The market is not in a good place, prices in most areas are stagnant, at best, and slightly receding in many places.

The problem you have though is you are looking at the price bracket that has one of the highest numbers of potential buyers. Its both first time buyer territory AND older downsizers. Many older people are also looking to cash in equity at the moment because they see the market is likley to slip and inflation, costs of living and borrowing rates are going to go up at least short term. So although a little late, they are downsizing to reduce living costs and extract equity.
The point I am making is that someone else may be prepared to overpay for a variety of reasons. You need to calculate your own offer according to your own assessment.
Plenty more suitable properties out there and no shortage of new ones coming to market though.

The issues about peeling paint, carpet and decoration aren’t big issues. The windows however are quite costly so do include those in your decision on price. I wouldn’t offer any higher based on what you’ve written here- it doesn’t sound like you love it! X

Yes, I wouldn't increase your offer. I wouldn't on principle as I dislike these rather maniupulative tactics (at least probably, from what you have said). I suspect most buyers are far less susceptible to FOMO nowadays. Good luck whatever you decide.

The paint and carpet didn’t bother me too much although I was surprised that for the price they hadn’t painted over it, which made me wonder if it was a sudden decision to put it up for sale. The windows though weren’t obvious on the pictures at all, they’ve put a lot of bulky furniture in front of the French doors too to try disguise that they were in bad condition as well as single glazed. They kept the back door out of the online pictures, it literally looked like it’d been kicked in, I’d go so far as to say I’d be amazed if their insurance would pay out if they were burgled as it didn’t look secure. It’d need replacing immediately. Saying all that I actually really liked it, I just don’t want to pay more than it’s worth.

Stick to your guns and don't increase your offer. You'll know by tomorrow afternoon.

DP house went to best and final last month with 6 asking price offers. Most of the offers were a few k over, one stuck at the asking price but one blew the rest out of the water with 15.5k over and this was on a 250k house. All were FTB so he went with the highest offer and completes next week.

We had this and there was no other bidder in the end it was just a ploy by the estate agents to push the price up. We stayed with our initial offer and got the property.

I think so too.

Are you sure these sellers aren't house flippers ? How long have they owned it ? If only 2 or 3 years they could be trying to cash in before they have really finished - as they think the market is about to head south...