Offers over majorly under market value - opinion?

[KatDubs261]

I've set up a viewing with a 2 bed flat I really like the look of and home report is good, although not sure how reliable they are.

The agent is asking for offers over £85,000 but it has been valued at 125,000. All this said, properties in the area are selling for between £95,000 - £105,000. I dont want to spend more than £130k ideally.

Is it likely I'd have to pay over £125k to secure such a property? It seems mad.

Depends on area, OP. DD2 was trying to buy a 2 bed flat in Edinburgh, that needed a lot of work done. She offered £40K over the asking price and lost the flat to a buyer who offered £70K over! Apparently there were 18 bidders and DD was nowhere the top.

She eventually secured a tiny flat for £50K over asking. You need to factor in the overbid when looking at properties you can afford.
Obviously, it would be less of a problem in a deprived area, or one with a lot of surplus housing and low demand (if such a place even exists nowadays!)

Very much depends on the area. In my area which is a edin/glas small commuter town, properties going for 10-15% above home report value.

There are exceptions of course depending on condition of the property, schools etc.

Ugh. Yes, it's really irritating when o/o is priced low to get you to look, but in reality you know it'll go for much more.

It really depends on the area. It's worth scouting to see if recently sold similar properties went for under the home report value. That's certainly not the case here, but it will vary.

It depends on what the seller wants and needs - we liked our current home, put an offer a bit over the valuation in straight away, we would have gone a bit higher but it was accepted as the seller needed a quick sale. Our last home went to sealed bids and we offered about 15 thousand over the valuation to secure it.

I think that most properties are going for near the HR value and more than 10% over in some areas. '

Where are you looking OP?

Offers over price almost irrelevant
In hot spots property will go over HR value
Most other places property will go for around HR
If you are getting a property for considerably under HR there is likely to be a reason for that

I am in Glasgow and looking all over, West End, Southside, City Centre. Ideally 2 bed but open to bigger 1 bed.

I have a flat viewing for a spacious 1 bed in Scotstoun next week. At the moment I could afford 10% over the asking price for that property. A part of me thinks this point in time is just going to be so, so hard to find a place.

Sorry 10% over the HR*

Nice parts of Glasgow south side and all of the west end are very hot right now. If you look at Rightmove you will see that properties that came onto the market in the last few days are already going to closing. For example

www.rightmove.co.uk/property-for-sale/property-84199732.html

This was put on the market on 28th and closes on 7th. So they’ve probably had at least two offers in excess of HV value. So the 0/0 price of 155 doesn’t mean much.

Scotstoun isn’t quite as crazy as Partick as it’s not easy walking distance to the universities . But it’s still going like a fair.

Do you have to buy now or could you wait until parent buying season and the post lockdown rush are over? Or go for something that needs a bit of work done that might be within your price range ? Otherwise you will need compromise on size or area.

Make sure you have a fixed price deal for conveyancing from your solicitor. I’d expect to pay around £600 ( + VAT ) plus outlays to buy something around £130k. Then at least you won’t get charged if you make lots of unsuccessful offers.

Allison - thanks for this. I'm a first time buyer so it's all pretty new for me.

When it comes to something that needs work done - I dont know what would be an acceptable baseline? As in what are non negotiables to start with and what could be worked on. Any advice appreciated

I had hoped to get this out of the way end of the year but it isnt looking so likely. Like you say a property went on the market last week, I had a viewing this Monday and today they told me an offer is in.

Most things can be worked if you have time, money, skills and knowledge or are prepared to acquire them!

How much could you do yourself ? Do you have much DIY experience ? Do you have family who could help you? I’d advise against relying on mates and mates rates.

You need to make a realistic assessment of your own resources before you buy.

I’m guessing you have a partner and / or a child as you are looking for a two bed? Think through the practicalities. Can you all live in one room for weeks / months ?

What if one of both of you has to work from home and you are living in a bomb site?

I don’t mean to put you off my own suggestion!! As long as you are realistic and prepared to work very hard it can be a good way to get more for your money. But it’s not for everyone.

Please tell me you have an up to date mortgage offer in place ? And a solicitor lined up ?

DIY experience - stifles laugh - not really. I helped to make a table last year with a sa and an electric screwdriver and I can and paint, but that's about it so far! There are family members who would be keen to help if I ask them I am pretty sure.

I'm torn on the mortgage front. So to be up front I could likely be a cash buyer because I've just come into an inheritance under sad circumstances. I tried to take out a mortgage with my bank last week to give me options with properties at a higher price and was denied (my credit score is 'fair', almost good). I've never used a credit card, so that could be part of the issue?

To be honest, I'd rather buy a flat sooner rather than later (so have considered a spacious 1 bed) but the second bedroom will become quite important soon enough. It doesnt need to happen tomorrow, but I would like to sort it out in the next 6 months if possible.

A saw*

There are other places to look for mortgages apart from your own bank. Most will be keen if your LTV is low. You need to shop around.

In Your situation I’d borrow some and get something bigger / better area that only needs redecoration. Or keep back more cash and pay to get the work done.

Sorry about your bereavement.

In the mean time, get a credit card and pay it off infill every month

That will build your credit score.

Bloody autocarrot Pay it off in FULL every month

This my bank and there are so many options. Any idea which one would be est for me?

personal.rbs.co.uk/personal/credit-cards.html

If you're only using the credit card to build history then any that has no fee will do the job. But maybe put yourself on the electoral register at the address you live first. I think they use it for cross referencing your address.

Maybe also have a read at any of those websites (Moneysavingsexpert or the like) that tell you how to build credit history so you can tick all the boxes? You don't want to be rejected when you apply for credit card or mortgage since I think it goes on the credit file.

My friend just sold/bought and found the biggest constraint was getting a date from the movers.

Mortgage broker - I have used London and Country mortgages several times and been happy with them. It would never occur to me to just take one out with my own bank.