Let's do this deal! Or, you know, whatever...

April 28, 2014 4:43 AM

I'm buying a house for the first time and trying to figure out the best way to approach things. I've found one that seems perfect and the asking price is within my budget. However, after a few years of nothing moving things have suddenly picked up, and everything I've looked at over the past month has moved to Sale Agreed really quickly and has gone for above the asking price. I'm trying to work out whether to be aggressive about my offer or not. I'm in the UK so not sure if that makes a difference.

Basically I'm not sure if I should:

a) go in under the asking price - even though I know it will go for more than that - and risk starting a bidding war
b) go in at the full asking price and wait to see what happens - it's literally been on the market since Saturday so maybe if people ring up to ask about it and it's already at full price it might put some people off even considering it?
c) tell the estate agent to ask the vendors what figure they are hoping for and tell them I will match this if possible in order to get it closed out quickly, but risk the vendors thinking "well if they'll offer X straight away them maybe someone else will offer X+ so let's wait it out" thereby inadvertently pushing the price too high.

Houses in the area I'm looking at are not coming up very often, which is why they're being snapped up, and for various reasons I'd like to get something sorted asap. So do I play it cool or essentially say "I want this - tell me what you need to make it happen"?

Has anyone any advice on what has worked for them in the past?

posted by billiebee to Home & Garden (11 answers total)

My advice is, don't go with option c, since the vendors are paying that estate agent who is probably on a percentage commission!
posted by emilyw at 5:12 AM on April 28, 2014

What have other similar properties in the area sold for? Base your offer on that, with allowances made for condition, etc. You can find information on Zoopla.

The place might be priced optimistically, in which case option b. would mean you spend much more than you need to, or it might be priced low for a quick sale in which option a. will not work for you because they'll not want to sell signicantly beneath the asking price.

My advice (IANAProperty lawyer or any kind of expert, just someone who's bought London properties twice) is that you be upfront about your need to move quickly on this and your disinclination to lose time by going back and forth.

Good luck!
posted by Ziggy500 at 5:19 AM on April 28, 2014

Agreeing with the above posts, what you offer should be based on comparable sales in the area and what its special qualities are worth to you, not on the asking price. Once you decide what such a house is worth to you, the asking price merely gives you an indication of whether you and the seller are likely to be able to come to an agreement.
posted by jon1270 at 5:25 AM on April 28, 2014 [2 favorites]

Seconding the 'I need to move quickly' approach. If properties in your chosen area are selling like hotcakes, there's not much point in going in under the asking price (as long as that price is sensible). But whatever you decide to offer, make that offer straight away and make sure you get your answer the same day; also, make sure they know that you have an agreement in principle and are ready to proceed as soon as you get the word. If there's no 'chain', tell them that too - it makes a difference. A lot of sellers would much rather deal with someone whose offer isn't contingent on selling another property, because things will move that much more more rapidly.

Note to American readers: in the UK, the agent acts on behalf of the seller, not the buyer. The buyer is basically on their own apart from the mortage and legal sides of things.
posted by pipeski at 5:35 AM on April 28, 2014 [2 favorites]

(Bought once, still have it).

Make yourself the most attractive buyer. There is a tradeoff between time to complete and money offered so having decided a sensible price it really helps if you can stress that you are a serious buyer, have finance arranged (you do, don't you?) and have no property to sell, thus are able to move quickly.
posted by epo at 5:39 AM on April 28, 2014 [2 favorites]

Make an offer above asking price but slightly below your maximum, and as others have suggested above, make it clear that you want to move quickly. This will give them incentive to accept your offer (since others have been going above their asking price) and will give you a little room to negotiate.
posted by chickenmagazine at 5:52 AM on April 28, 2014

I do not think it is wise to put out an unrealistically low bid in a seller's market, as it appears London is at the moment. If properties are selling quickly, they are selling for their asking price or better, and it is likely that there will be other offers at that price. If there are several such, the seller may entertain a bidding war, depending on their level of patience for that sort of thing. But some people will happily take the cleanest offer that meets their expectations. Low bids in a seller's market tend to be ignored, as the buyer looking for a bargain is unlikely to engage in a bidding war.

tl;dr - If you think the place is worth the asking price, offer that much & wait.
posted by mr vino at 5:57 AM on April 28, 2014

A person I know just missed out on a house he really wanted by putting in a too-low offer. There were other offers, and the sellers chose to bargain only with the top one or two offers, and he never got a chance to counter and improve his offer. So while there is definitely a time and a place for bidding low, there's also a point where if you go too low, you are just indicating you are not serious.
posted by Dip Flash at 6:03 AM on April 28, 2014

I'm assuming you're in Northern Ireland. Having experience of house buying in England & Scotland, I can tell you that the systems are very different. I'm assuming that Northern Ireland doesn't have the sealed bid system of Scotland, so is more like England, but I'd say it's worth checking what happens where you are, along with the general advice given above.
posted by ambrosen at 6:10 AM on April 28, 2014

I take it you have agreement in principle for a mortgage? If not ring your lender now and get that. It helps strengthen your bid and gives you a ceiling as well in your negotiations. You don't tell the seller what you're approved for obviously. You make an offer considering the factors others have pointed out and then you highlight you're pre-approved. If you are not part of a chain hilight that as well. Basically, highlight every little thing that adds credence to your stated desire to move quickly - it will strengthen your offer. Good luck!
posted by koahiatamadl at 6:13 AM on April 28, 2014 [1 favorite]

We bought a house in Cambridge during an (earlier) hot market. We put in a bid at the asking price, after which the estate agents came back and said "the seller has x offers at the asking price and is going to do a single round of bids to decide who they will go with". We made an aggressive bid and got the house.

Caveats:
- we had a firm offer for our flat and could move quickly so we were "good" buyers
- one of the other potential buyers tried to top our bid. The sellers stuck with us because we'd made a serious final offer and it gave us credibility. Other sellers might have seen it differently though. You have to be firm about what your maximum price is.

tl;dr - offer the asking price. Be clear about wanting to wrap things up quickly. Expect to pay more than the asking price to get the property.
posted by crocomancer at 7:03 AM on April 28, 2014