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Put An Offer In Today, One Other Interested Party And I Didn't Even Match Their Opening Offer!


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#1 trickydicky79

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Posted 24 January 2012 - 09:26 PM

Put an offer in today...

I found most nice places beyond my reach, but finally found one that I could just about manage to afford. It was a ‘death in family inheritance’ and the place needed gutting – the works really; wiring; building work; new central heating; new kitchen & bathroom, but even with factoring these in I thought it was a good buy and in an area where houses don’t often come up and I was actually looking forward to taking on a challenge

Now…

The house for sale was, as I said, in need of refurbishment - around 15-20k to bring it to a reasonably standard. Maybe more, maybe less, but definitely ‘in need of modernisation’

It was on for 175k (its 1st week)

Two houses - absolutely identical buildings, in every respect – both sold last year for £159k - one in the summer and one in October. Both needed work, and I know for sure that the latter was in a similarly rundown condition.

I thought… value at around £159k last year, probably about 157k now, but the sellers were apparently willing to negotiate and wanted a quick sale, so try for £155k and see what happens?

Just about to make my offer when I was told another party made an offer (yesterday) and the seller was prepared to accept. Would I like to make an offer as they were cancelling all remaining viewings (I had a second viewing booked in for two days time). Intially, no hint on the other party’s offer...

I thought, chances of a cheeky offer were probably gone, so went in straight in for £159k (a fair offer by anyone’s standard) = rejected.

‘Ok’, I thought, ‘I like the place, so might have to accept a slight overpayment due to competition’. So, £162k = rejected (very quickly)

Decided to cut to the chase and told the agent that we best just stop wasting each other’s time…
“Am I anywhere near the other party’s offer? Otherwise we’ll be playing this game all day and I already think my offer exceeds its current value”.
Agent, “No, you’ll need to offer substantially more”
Me, “Ok then, let’s forget it. I know how much the others went for, this place is no different and I’m not getting into a bidding war”

The other party’s bid was accepted and I can say with some degree of certainty that it must have been high £160’s to low £170’s.

I can’t fathom some people! I understand prices push up when several parties are interested, but this was their first offer, and they didn’t even know that I was willing to make an offer when they made it! Do they not do their homework???
One quick tap into Google and you’ll pull up sold prices and find out your starting offer was around 10-12k over sold prices from 2011.

Arggh!!! Although I’m disappointed losing out, I feel more annoyed that I’m up against such idiots willing to pay whatever an Estate Agent puts in their window! I can almost see the conversation with their friends, “we got a bargain, it was on for 175, but we got it for 170!”

My only consolation is, that with any luck, the Mortgage valuation will be more thorough that the buyers were and will only value it at around £157k. If the buyers need to make up a 13 grand shortfall I might find it back on the market sooner than I thought!

Note, the accepted offer was made by FTB's, House is in the SW area, 2/3 bed semi which, in good condition, maybe sell for £190k (probably the ceiling price, due to the houses' size which is a little on the small size for a family home)

#2 8 year itch

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Posted 24 January 2012 - 09:37 PM

Sit back and wait for it to fall through/price confirmed on zoopla but stick to your guns.

There is no ladder.

JY


No need to sell up, the next phase of the economics cycle is going to be very positive for anyone that owns property.

All I'm sayings is, don't listen to the property bears people, they are wrong.


#3 juvenal

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Posted 24 January 2012 - 09:56 PM

Put an offer in today...

Do they not do their homework???


No, they don't. I've lost count of the people I've spoken to who have no idea you can look up recent SOLD prices. Any many are more interested in wallpaper and worktops than the biggest financial deal of their life.

That's people for you...

Edited by juvenal, 24 January 2012 - 10:59 PM.

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#4 Spot

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Posted 24 January 2012 - 10:27 PM

I looked at a place last year up for £399,900.
It had been up for sale for over a year and it was originally priced at £520,000.
I thought it was still way overpriced and walked away.
About November I noticed it was sold.
Last week it was back on the market again. And this time priced at £430,000 !
Mental.

Good man for walking away. Don't worry, something will turn up. Hang onto your money....

#5 catmandu

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Posted 24 January 2012 - 10:51 PM

Regarding the people who outbid you - you will see them in 2 years time on the BBC news complaining about how they are in negative equity and telling us the government needs to do more to maintain house prices.

#6 Sibley's Love Child

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Posted 25 January 2012 - 12:19 AM

Sit back and wait for it to fall through/price confirmed on zoopla but stick to your guns.


Definitely, as the old saying goes, how do you know when an EA is lying? you can see their lips moving.

Sure, if and when the property does show up on the Land Registry I guess it goes to show there's always a greater fool. You did right to walk away in this instance.

Please update this thread accordingly in three months time.

#7 trickydicky79

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Posted 25 January 2012 - 12:26 AM

I think it’s a case of someone buying using their heart rather than their head.
Sadly, no amount of bearish sentiment can sway the emotions of some determined people. I suppose you must just stick to your guns and avoid getting suckered in.

I see this a lot, the houses I’m looking at are generally those attractive to young couples or FTB’s - i.e. 2-3 bed houses and not too bothered about room for loads of kids or school catchment areas. Trouble is, these type of houses generally only get lived in for around 5 years before people marry, have a second child (etc) and their priorities change to seeking a larger, quieter family home. If you look at the prices current owners paid 5 years ago then a large number were sold at peak. They simply can’t (or won’t) sell at a loss and stubbornly hold on for the ‘right price’ or hold off putting their house up for sale altogether. When the odd one comes up at a realistic price, there is still a lot of interest despite the tightening of credit.

I think, if you can afford it, its better to jump this stage altogether and look at the large family houses where the current owners (at least some anyway) are more willing to lower their expectations and can accept lower sale prices and still make a tidy sum to boot (retirees, down-sizers, emigrating overseas etc).

Sadly, I can’t afford to bypass this stage and, like many other I expect, when a medium size house in a nice area comes up for sale I immediately take an interest. Whilst I still remain headstrong and thoroughly research prices and values, others simply look at the stubbornly high prices around them, decide this is a ‘bargain’ and they can just about afford it, then jump in hoping they don’t ‘miss out’. Its certainly not helped by the ‘Now is a good time to buy’ and ‘get yourself out of the dead rental market’ advise of their parents and the dreadful stream of property porn spewed out across all TV channels!

Although I hate my current flat (its cheap and I’m on a month-by-month rolling contract), I will bide my time and hopefully timing will be on my side next time!

#8 needle

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Posted 25 January 2012 - 07:30 AM

Put an offer in today...

Note, the accepted offer was made by FTB's, House is in the SW area, 2/3 bed semi which, in good condition, maybe sell for £190k (probably the ceiling price, due to the houses' size which is a little on the small size for a family home)


Casting a critical eye over that post, there is nothing in it except you and an EA talking.
Either youre a complete fkn idiot or an EA trying to feed crap to people.

Firstly you made an offer.
Then you raised your offer.
Then you asked an EA how much did you need to offer.

I mean, its the very definition of being played for a mug.

All the rest - another party to the transaction, FTBs, not looking up prices etc etc - is all happening in your head.

Heres what I reckon happened; the EA saw you coming.
You turned up did a viewing, gurning like a giddy idiot and requested a second viewing almost immediatly.
The EA knows he has you on the hook.
You make an offer - really early on - before the EA even contacted you for feedback.
The EA got you by the balls and he knows it; but you dont.

So the EA throws you a line. You gobble it down.
Later you come back for more. Gobble down another line.
Gobble, gobble fkn gobble.

EA is probably laughing his 4rse off in the office at the mug punter bidding against himself.
"And," says the EA, "get this, he even asked me how much he needed to pay."

You seem to think the problem is "idiots willing to pay whatever an Estate Agent puts in their window".
But its not. Its giddy-headed muppets like yourself. I mean, you've already bid the price up twice.

EDIT _ remarkably similar story to this thread http://www.housepric...howtopic=174360

......which was also posted by a new member and ponders upping his offer..... curious, eh?

Edited by needle, 25 January 2012 - 07:39 AM.


#9 trickydicky79

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Posted 25 January 2012 - 11:52 AM

Paranoid a little aren’t we?

Despite your critical eye and super sleuthing skills, I’m afraid I have to tell you you’re wrong on all counts. But, I must admit, I’m flattered by your determination to oust me… Just don’t let me catch you going through my bins!

It against my better judgement to even respond to your drivel, but I will just say this.

You’ve obviously never really bought anything have you? A new/used car? a house? An auction? (not ebay!). When you do, and you find another person wants to buy it, two things happen:

One - the price starts to go up (as the two parties compete to secure the sale, until one decided enough is enough and pulls out).

Two – One party realises there actually isn’t another party at all, and he’s being had by an evil nasty estate agent who is breaking the law to increase his commission by a fractional amount; risking losing the sale, as well as his job, as a result. The evil estate agent does this just for fun you see, its what they do, call it an addiction if you like.
Of course the super slick potential buyer (lets call him Needle) doesn’t fall for this scam as it is his mission in life to rid the world of these nasty estate agents so he shouts abuse down the phone and posts rude things on websites.
One day Needle might even find himself putting a dead rat through the estate agent’s letterbox. Sadly, Needle’s often get arrested for this and often end up getting a nice visit from a two Doctors and a Social Worker before they get taken to a nice place to relax and play with their friends…




[Psst… “Needle, don’t look now but I think there’s an Estate Agent behind you”]

#10 8 year itch

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Posted 25 January 2012 - 12:11 PM

snip...


Completely agree, you only really ever know whats going on about your own position so come to a decision and play it with a straight bat. I've tried to point out the same on this thread http://www.housepric...0

If I was guilty of second guessing, I might say that the other one was an attempt to persuade people not to go in with low offers on properties they like because they will lose out and never get a second chance. The implied advice is go in high to secure it, not go in low and wait for the market to come down to meet you. But I don't second guess so I didn't point that out ;)

There is no ladder.

JY


No need to sell up, the next phase of the economics cycle is going to be very positive for anyone that owns property.

All I'm sayings is, don't listen to the property bears people, they are wrong.


#11 el burro sin nombre

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Posted 25 January 2012 - 02:35 PM

I think that the OP is guilty of overthinking this one.
Someone else valued the property higher than you -end of.
You have no idea about the motivation for their valuation and it is pointless second guessing them.
Looking at your post, you may not have considered, that for some punters, not missing out on the house they really want is worth more to them than the £10K that you were trying to save.

#12 trickydicky79

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Posted 25 January 2012 - 03:00 PM

If you’re lucky, then you’ll find yourself being the only person interested and the only person making an offer. Great, put in an offer, see what the reaction is, set a limit etc etc, all very basic and common sense stuff.

Now, unless you like wrecks of houses or hugely overpriced ones, you’ll probably find that you’re not the only interested in a given house. You have two choices, walk away, or make an offer.
Again, if you’re lucky, then you might have some advantage over any other party, i.e. nothing to sell, ready to move quickly etc etc. If you’re unlucky, you haven’t. Therefore with two parties evenly matched any sale is really going to come down to who makes the highest offer.

Now, I’m as cynical and wary of Estate Agents as anyone, but to assume that any offers on a house are fictitious and just a ploy to coerce you into making an offer is very naïve indeed.

I’m not saying this has never happened, but for an EA to go down this route they really are playing with fire and its practice is very rare.
Firstly, its illegal, there’s always a chance they’ll be caught out and risk losing their jobs.
Secondly, its very likely to backfire and you’ll see your real buyer pull out (like I did). Thirdly, why bother? An EA works on a commission of sale price, around 1 – 1.25%, it is simply not worth this dangerous and illegal practice to gain a few hundred quid (and that’s for the company, their personal commission would be even less).

Like it or not, most sellers use EA’s and you must deal with them. You are very unlikely to ever meet the other interested parties in person (unless you actually find who they are by word of mouth) so you have little choice than to trust them that, when they have said an offer has been made, it really has.
If you always assume their lying you’re never going to buy anywhere, ever.

#13 trickydicky79

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Posted 25 January 2012 - 03:06 PM

I think that the OP is guilty of overthinking this one.
Someone else valued the property higher than you -end of.
You have no idea about the motivation for their valuation and it is pointless second guessing them.
Looking at your post, you may not have considered, that for some punters, not missing out on the house they really want is worth more to them than the £10K that you were trying to save.


I agree with you! My post was out of frustration more than anything else. I was just highlighting that, in a pretty stagnant market, you still get people who will pay over the odds even with no competition.
I suspect they didn’t do their homework and based offers purely on advertised price, but only they know that for sure.
They wanted it for more than I was willing to pay, that’s it.

#14 RichB

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Posted 25 January 2012 - 03:22 PM

Now, I'm as cynical and wary of Estate Agents as anyone, but to assume that any offers on a house are fictitious and just a ploy to coerce you into making an offer is very naïve indeed.

I'm not saying this has never happened, but for an EA to go down this route they really are playing with fire and its practice is very rare.
Firstly, its illegal, there's always a chance they'll be caught out and risk losing their jobs.
Secondly, its very likely to backfire and you'll see your real buyer pull out (like I did). Thirdly, why bother? An EA works on a commission of sale price, around 1 – 1.25%, it is simply not worth this dangerous and illegal practice to gain a few hundred quid (and that's for the company, their personal commission would be even less).


Perhaps so, your argument seems very rational.

What I don't understand is quite how the house that has been lying for sale for a year or so, suddenly gets loads of interest just while I am looking at it. When I don't bite, the place is still for sale 4 months later _never_ having gone under offer in any of the advertising.

Time and time again.

#15 el burro sin nombre

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Posted 25 January 2012 - 03:46 PM

There was actually a study of sale figures in the USA (in the book Freakonomics) that showed that EAs sell their own houses at a slightly higher price than others on their books (something like 3-5% or so). The rationale / explanation given was that the amount of comission that they would make on the extra 3-5% was not worth the effort / risk involved. But it was worth it when they took the full 5% (and not 2% of the 5%). It could just be that EAs would know how to market their house and present it to its best.
Anyway, this analysisof real figures would seem to counter the suggestion made on here that EAs make up offers to push up bids by small amounts in the case of a single buyer. I d, however, suspect that this tactic / cheat is used when the EA knows that the offer will be rejected out of hand by the vendor.
In the case described by the OP, I think that the house had just come onto the market. IMO there is no way that a rational vendor would accept a 80% or 90% offer within the first few weeks of going to the market.




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