Tactics for ‘Offers in excess of’, guide price ranges etc.
Discussion
I’m finally in the process of actively house hunting, after several years of watching the local market. I know the properties and area pretty well (zone 4, London) but I’m still trying to gauge how to respond to guide price ranges (typically a £50,000 range), ‘Offers in excess of £xxx,xxx’, modern auction crap and so on…
Seems like agents are now often focused on delaying potential buyers from getting through the door until they can line up a packed ‘open day’ and build the sense of competition, presumably triggering wildly inflated panic bids. I saw a house on Saturday (the first day of viewings) that I arranged to view the day the ad went live. Apparently they had 50 parties booked to see it. I saw five or six parties in the 25 mins or so I was there. I’ve made an offer (£11,000 or so over asking) and have no idea how it’s going to play out…
A similar house across the street was advertised on Wednesday, had no viewing slots available on the first day of viewings (Saturday) when I phoned mid-morning on Thursday and apparently has a sale agreed on it today at the top of the £50,000 guide price range, despite them having had a ‘waiting list’ of people who didn’t even manage to get in.
I’m interested to hear what tactics people use to decide what to offer in this type of scenario. Are there any smart ways to gauge what’s likely to secure a house, short of just bidding very high?
One property I was watching previously was reduced by £30,000, then reduced a further £45,000 over several months and then got bid back up to the original asking price when two buyers turned up at the same time. Meanwhile, poorly advertised stuff seems to hang around for a long time…
Seems like agents are now often focused on delaying potential buyers from getting through the door until they can line up a packed ‘open day’ and build the sense of competition, presumably triggering wildly inflated panic bids. I saw a house on Saturday (the first day of viewings) that I arranged to view the day the ad went live. Apparently they had 50 parties booked to see it. I saw five or six parties in the 25 mins or so I was there. I’ve made an offer (£11,000 or so over asking) and have no idea how it’s going to play out…
A similar house across the street was advertised on Wednesday, had no viewing slots available on the first day of viewings (Saturday) when I phoned mid-morning on Thursday and apparently has a sale agreed on it today at the top of the £50,000 guide price range, despite them having had a ‘waiting list’ of people who didn’t even manage to get in.
I’m interested to hear what tactics people use to decide what to offer in this type of scenario. Are there any smart ways to gauge what’s likely to secure a house, short of just bidding very high?
One property I was watching previously was reduced by £30,000, then reduced a further £45,000 over several months and then got bid back up to the original asking price when two buyers turned up at the same time. Meanwhile, poorly advertised stuff seems to hang around for a long time…
The only tactic really is to bid what you are happy to pay. You don't want the spend years thinking you over paid for it.
The biggest thing is how proceed able you are. House under off good. House not on market bad. This applies for any offer in a bid or not.
I don't believe there is a rule of thumb etc as each property is different and you have no idea how many/ if any other are bidding.
I am surprised that the current market supports packed viewings and significant overs.
The biggest thing is how proceed able you are. House under off good. House not on market bad. This applies for any offer in a bid or not.
I don't believe there is a rule of thumb etc as each property is different and you have no idea how many/ if any other are bidding.
I am surprised that the current market supports packed viewings and significant overs.
Wacky Racer said:
Just decide what you think is a fair and reasonable price you are happy to pay and stick to it.
Imagine if a house was offers over 500k, you offered 520, bought it and found out the second highest was only 505.
Sure. Seems a logical way to approach things. That’s what I’ve done with my offer. Just leaves you with no idea what your odds are of getting it.Imagine if a house was offers over 500k, you offered 520, bought it and found out the second highest was only 505.
Funnily enough, I saw the same house five years ago when looking for our current place. Maybe I should have just gone in with the asking price the day it was advertised before anyone had viewed it!
Jeremy-75qq8 said:
The only tactic really is to bid what you are happy to pay. You don't want the spend years thinking you over paid for it.
The biggest thing is how proceed able you are. House under off good. House not on market bad. This applies for any offer in a bid or not.
I don't believe there is a rule of thumb etc as each property is different and you have no idea how many/ if any other are bidding.
I am surprised that the current market supports packed viewings and significant overs.
That’s true. It’s the second-guessing others that is difficult and dangerous when it comes to overbidding.The biggest thing is how proceed able you are. House under off good. House not on market bad. This applies for any offer in a bid or not.
I don't believe there is a rule of thumb etc as each property is different and you have no idea how many/ if any other are bidding.
I am surprised that the current market supports packed viewings and significant overs.
Yes, it is surprising interest levels are so high. These two houses are in a specific few streets with a set type of houses, so they may be particularly popular, but good stuff is definitely moving quickly. My next door neighbour’s house, meanwhile, has failed to sell the last two times it was marketed (though the ad was pretty poor).
RoVoFob said:
I’m still trying to gauge how to respond to guide price ranges (typically a £50,000 range), ‘Offers in excess of £xxx,xxx’, modern auction crap and so on…
The best way to respond to MMA is just to walk on by… unless the property has ended up getting reduced several times (not uncommon for MMA) and is demonstrably cheap vs conventional alternatives. LooneyTunes said:
The best way to respond to MMA is just to walk on by… unless the property has ended up getting reduced several times (not uncommon for MMA) and is demonstrably cheap vs conventional alternatives.
That’s my normal technique. Did see one modern auction place, though, as the house was unique, but was put off offering by the format. Agent had ‘reduced’ the price by £50,000 twice ahead of the closing date - completely contrived way to drum up interest.Think buyers’ fees amounted to something like £25,000 in the end. Can’t see why any buyer would want to play that game. This specific house needed gutting and I can’t see how even a builder/developer would have got a good house for that money…
We worked out the maximum we’d be happy paying, including building works, ignored the guide price and offered that.
Was a forever house, and we’d been outbid on others, so decided would rather just cough up than let it go. I wouldn’t have used this approach otherwise, and didn’t ask what the other offers were!
Was a forever house, and we’d been outbid on others, so decided would rather just cough up than let it go. I wouldn’t have used this approach otherwise, and didn’t ask what the other offers were!
Jeremy-75qq8 said:
The only tactic really is to bid what you are happy to pay. You don't want the spend years thinking you over paid for it.
Those two sentences could well contradict each other. It is entirely possible that the OP finds a house that he is happy to pay, for the sake of argument, £500,000 for. Should he discover later that nobody else was willing to pay more than £470,00 and that the seller would have taken £470,000 then he has still paid a price he was happy with. wombleh said:
We worked out the maximum we’d be happy paying, including building works, ignored the guide price and offered that.
Was a forever house, and we’d been outbid on others, so decided would rather just cough up than let it go. I wouldn’t have used this approach otherwise, and didn’t ask what the other offers were!
That can work for a forever house, as any premium you pay is eroded over time. My situation is that I’ll be moving as far out of London as I can, as soon as I can! Was a forever house, and we’d been outbid on others, so decided would rather just cough up than let it go. I wouldn’t have used this approach otherwise, and didn’t ask what the other offers were!
Having said that, the house that I offered on today is probably about the best medium-term house I could possibly hope for in both head and heart terms, so I am willing to pay something of a premium for it over other just-good-enough alternatives… Just need to work out what that premium is, as I suspect it may end in some form of sealed bids.
Hate OIEO and ranges. OIEO seems to be for people deluded about the value of their house and often pops up after a price reduction. We offered 10K above on one house that was OIEO and it was rejected (they had no other offers at the time), waste of time. If you won't accept lower than a certain price then either chuck it up for that and tell the EA to inform viewers or put it up higher and reject any offer lower. We went to market last week, EA gave us a 50k range. I didn't want OIEO or a range so we put it up for the lower end (which hits a rightmove band) and if it's worth more then the market will decide that and bid it higher
Just to offer a slightly different perspective (although only applies in certain circumstances I guess).
We probably overpaid for our house a few years ago - Underpriced advert, line up as many interested parties as you can, viewings all at the same time to generate competition, get people bidding, and go to sealed bids etc etc.
In our case, this was the only house like it (large house, corner plot, in the area we wanted etc etc) and I don't regret it at all. I tried to offer before the viewing to take it off the market, but they were having none of it.
The few (maybe 10's of) K we probably overpaid by is buttons in the grand scheme of things and we'll likely never have to move again. We didn't think twice about the fact that the next bid might have been 10 or 20 K lower than ours, as it is a 50 year + property for us and we would have been way more annoyed to miss out for a couple of quid.
If the house is a long term one, then don't be scared of making sure you get it, as the cost of not doing so could well end up being more. (We'd been looking on and off for maybe 5 years before this one popped up).....
We probably overpaid for our house a few years ago - Underpriced advert, line up as many interested parties as you can, viewings all at the same time to generate competition, get people bidding, and go to sealed bids etc etc.
In our case, this was the only house like it (large house, corner plot, in the area we wanted etc etc) and I don't regret it at all. I tried to offer before the viewing to take it off the market, but they were having none of it.
The few (maybe 10's of) K we probably overpaid by is buttons in the grand scheme of things and we'll likely never have to move again. We didn't think twice about the fact that the next bid might have been 10 or 20 K lower than ours, as it is a 50 year + property for us and we would have been way more annoyed to miss out for a couple of quid.
If the house is a long term one, then don't be scared of making sure you get it, as the cost of not doing so could well end up being more. (We'd been looking on and off for maybe 5 years before this one popped up).....
RoVoFob said:
That can work for a forever house, as any premium you pay is eroded over time. My situation is that I’ll be moving as far out of London as I can, as soon as I can!
Having said that, the house that I offered on today is probably about the best medium-term house I could possibly hope for in both head and heart terms, so I am willing to pay something of a premium for it over other just-good-enough alternatives… Just need to work out what that premium is, as I suspect it may end in some form of sealed bids.
Why are you wanting to buy a house if your situation is that you’ll be moving away from the area asap ? Having said that, the house that I offered on today is probably about the best medium-term house I could possibly hope for in both head and heart terms, so I am willing to pay something of a premium for it over other just-good-enough alternatives… Just need to work out what that premium is, as I suspect it may end in some form of sealed bids.
Any property slump close to 2008 should occur and you’ll be upside down on it for years!
In Scotland there are 3 prices. The listed price, the home valuation (which is usually above the listed price) and the final sale price (which is usually above the valuation).
Its a bad system IMO, as you literally dont know what you will pay and you know the home valuation is likely 5-10% over the listed price. Its a system thats rigged to get that final bit of juice out of the customer. We bought last year and they squeezed us for an extra £10k right at the end.
Once they have offers the system is that you go to a "closing date" which is when you are expected to put in your final offer.
I think England is trying to go to a similar system tbh. I know there isnt really a valuation - but its fairly common now for houses to be listed "offers over".
Now we are starting to see a lot of best and final by x date. Again its just a ploy to get more £ out of people. I think in the long run it hurts everyone as house prices end up going up.
When we sold our house in England last year this is exactly what happened.
Its a bad system IMO, as you literally dont know what you will pay and you know the home valuation is likely 5-10% over the listed price. Its a system thats rigged to get that final bit of juice out of the customer. We bought last year and they squeezed us for an extra £10k right at the end.
Once they have offers the system is that you go to a "closing date" which is when you are expected to put in your final offer.
I think England is trying to go to a similar system tbh. I know there isnt really a valuation - but its fairly common now for houses to be listed "offers over".
Now we are starting to see a lot of best and final by x date. Again its just a ploy to get more £ out of people. I think in the long run it hurts everyone as house prices end up going up.
When we sold our house in England last year this is exactly what happened.
SEDon said:
Hate OIEO and ranges. OIEO seems to be for people deluded about the value of their house and often pops up after a price reduction. We offered 10K above on one house that was OIEO and it was rejected (they had no other offers at the time), waste of time. If you won't accept lower than a certain price then either chuck it up for that and tell the EA to inform viewers or put it up higher and reject any offer lower. We went to market last week, EA gave us a 50k range. I didn't want OIEO or a range so we put it up for the lower end (which hits a rightmove band) and if it's worth more then the market will decide that and bid it higher
Hmm. Hadn’t thought of it that way. I always just thought buyers were chancing it but would accept the specific figure shown. Bizarre that your £10k over offer wouldn’t be accepted with no others on the table.I suppose the build-up-interest-hold-packed-open-day-get-all-offers-in-quickly format works for sellers, giving them the quickest possible sense of what people are willing to pay. It’s just not nice to be on the other side of that. Makes you feel like one of thousands competing rather than a customer…
fat80b said:
Just to offer a slightly different perspective (although only applies in certain circumstances I guess).
We probably overpaid for our house a few years ago - Underpriced advert, line up as many interested parties as you can, viewings all at the same time to generate competition, get people bidding, and go to sealed bids etc etc.
In our case, this was the only house like it (large house, corner plot, in the area we wanted etc etc) and I don't regret it at all. I tried to offer before the viewing to take it off the market, but they were having none of it.
The few (maybe 10's of) K we probably overpaid by is buttons in the grand scheme of things and we'll likely never have to move again. We didn't think twice about the fact that the next bid might have been 10 or 20 K lower than ours, as it is a 50 year + property for us and we would have been way more annoyed to miss out for a couple of quid.
If the house is a long term one, then don't be scared of making sure you get it, as the cost of not doing so could well end up being more. (We'd been looking on and off for maybe 5 years before this one popped up).....
Thanks. Useful to hear. Definitely is more viable to overbid on a long-term house where being able to stay there much longer cancels out any slight premium you pay.We probably overpaid for our house a few years ago - Underpriced advert, line up as many interested parties as you can, viewings all at the same time to generate competition, get people bidding, and go to sealed bids etc etc.
In our case, this was the only house like it (large house, corner plot, in the area we wanted etc etc) and I don't regret it at all. I tried to offer before the viewing to take it off the market, but they were having none of it.
The few (maybe 10's of) K we probably overpaid by is buttons in the grand scheme of things and we'll likely never have to move again. We didn't think twice about the fact that the next bid might have been 10 or 20 K lower than ours, as it is a 50 year + property for us and we would have been way more annoyed to miss out for a couple of quid.
If the house is a long term one, then don't be scared of making sure you get it, as the cost of not doing so could well end up being more. (We'd been looking on and off for maybe 5 years before this one popped up).....
I imagine that I’d be looking to stay a maximum of eight years with the best house I can feasibly get now. When my son’s in secondary school, I’d be looking to move further out of London, if possible, so wouldn’t want to overbid too much…
House I’ve bid on is one of the few I can find in the area that I really like and isn’t wildly priced. Am planning to put a load of flyers through the door of specific houses, too (typically those with a garage or scope for one, a plot that isn’t super-narrow and a garden that isn’t just a yard, which narrows it down pretty quickly) and see if any owners are looking to sell, as there’s not too much on the market.
My Plan B at the moment is a three-bed flat with a garage for well under half the price of the one I’ve put an offer in on. Could enable me to quit my job and go freelance doing something I actually enjoy. Decisions, decisions…
Edible Roadkill said:
Why are you wanting to buy a house if your situation is that you’ll be moving away from the area asap ?
Any property slump close to 2008 should occur and you’ll be upside down on it for years!
ASAP probably means eight years for me! I’m getting divorced hence the reason for the move now.Any property slump close to 2008 should occur and you’ll be upside down on it for years!
wombleh said:
We worked out the maximum we’d be happy paying, including building works, ignored the guide price and offered that.
Was a forever house, and we’d been outbid on others, so decided would rather just cough up than let it go. I wouldn’t have used this approach otherwise, and didn’t ask what the other offers were!
We did very similar…the price our house was listed at seemed like it was under priced. Within a week of agent approaching buyers they already had it went to sealed bids. Never made it to online listing. Was a forever house, and we’d been outbid on others, so decided would rather just cough up than let it go. I wouldn’t have used this approach otherwise, and didn’t ask what the other offers were!
We paid what we thought it was worth which was a significant uplift on guide price. Agent wa surprised at what we offered but conceded that our competition had similar ideas to us…..
gotoPzero said:
In Scotland there are 3 prices. The listed price, the home valuation (which is usually above the listed price) and the final sale price (which is usually above the valuation).
Its a bad system IMO, as you literally dont know what you will pay and you know the home valuation is likely 5-10% over the listed price. Its a system thats rigged to get that final bit of juice out of the customer. We bought last year and they squeezed us for an extra £10k right at the end.
Once they have offers the system is that you go to a "closing date" which is when you are expected to put in your final offer.
It's a terrible system, although I did benefit from it on my last house sale. The already highest bidder increased their final offer by £5k when it went to the closing date. Their original offer would have secured the house no problem. I wasn't complaining obviously, but I'd welcome a more fair and transparent system.Its a bad system IMO, as you literally dont know what you will pay and you know the home valuation is likely 5-10% over the listed price. Its a system thats rigged to get that final bit of juice out of the customer. We bought last year and they squeezed us for an extra £10k right at the end.
Once they have offers the system is that you go to a "closing date" which is when you are expected to put in your final offer.
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