How much to offer?

Hi,
There’s a house I’m interested in bidding on. It’s been at 315k for 3 weeks, I think it’s the only offer they’ve had.
My top budget is 320k, only 5k more.
Should I offer the 320k in the hope that 5k will knock the other bidder out? Or is it better to go up in 1k?
My worry is that if I offer 1k it will be very easy for the other bidder to offer another 1k, then another etc…
What do you think?
Btw, this will be the 4th house I’ve bid on so i want to get it right this time!
Any advice would be great, thanks.

Depends how much you want it. If you really have to have it, offer 320 on the basis that they immediately take it off the market without entertaining other bids.

If you’re only 90% about it, go up in 1ks cos there’ll be better and cheaper around the corner

What is the current asking price?

It depends where the property is?

Do you have a link to it?

360k

From my experience, it is going to be difficult to get it in case 315k was the initial offer from the other bidders.
The good news is that three weeks have gone so probably they are starting to think that is the “fair” price for the house.
I would bid 320k in the hope they think you have a stronger position. 320k and walk away if not.

+1

Good Luck.

Thanks for the advice, I’ll offer 320 tomorrow and cross my fingers!

If you offer 320 k it looks like you are super keen and the EA will smell it. What you will hear back after a day or too is can you go to 325k. Baby steps in any increases or else you look desperate.

Remember the welcome guest…

I would personally walk away-you are far too eager and ripe to be fleeced. This is a crap time of year for bids/people wanting to move and your desperation is walking you in to offering too high.
They have an offer that’s all-sit tight, there will be better value all round come 5/12/12 (Budget Day) when most people’s net income will be down by at least 1k per year.

Why would I walk away from a house I want?? Surely I have to at least try to get it. I have my budget set, it’s a fair price for this particular house.
I know I have very little chance of getting this house given my budget but how would walking away from a house I want help me?

You’re right - you don’t walk away from a house you want. And I disagree that you are too eager - you are obviously not going to say to an EA what you say on this forum. Put in your 320 offer - nobody will smell anything off you :laughing: If it’s not accepted decide your absolute limit and if you want to go any further. At the end of the day we can play all the games we want but most people buy a house with not having to play any.

I am not telling you what to do, just offering you some advice. My Mystic Meg capabilities for future forecasting may be suspect but this train wreck of an economy does not justify current house prices. We may have reached a temporary bottom but it is delusional as repossessions have not started and there is no credit lending at the moment (and no hope of banks forwarding money until they are filleted and sold off in 2 years time). If this even saves you 20 or 30k in a year to 2 years time be grateful. Keep renting- it will be cheaper in the long run.

There’s no strategy to play here, as you hold no cards.

There are 2 parties (EA/vendor and other bidder) here, and 1 potential party (you)

  • Vendor/EA wants more than 315k
  • Other bidder has bid 315k
  • You can only go to 320k

It doesn’t matter what you bid, to be honest.

  • If vendor wants more than 315k, 320k might tempt him
  • If other bidder is willing to pay 325k, you’re out, and it doesn’t matter how slowly you reach that point

If you like the house make a bid. If you go 317,500, the other bidder might get to your comfort spot of 320k. I’d probably just go sit at 320k on a take it or leave it basis. If it’s enough to buy the house, it’s enough to buy the house. No strategy or cunning will change that when bidding is so close to your max.

If your mystic meg capabilities are telling you to expect repossessions then I’d hold off on giving advice to people.

OP - go for it. But as someone mentioned above, you don’t have much ammo, so be prepared for the possibility that 320 won’t be enough.

I did add the caveat that my Mystic Meg capabilities may be suspect :slight_smile:

+1. It’s a throw of the dice. Make your bid as strong and firm as you can. Go full 320. Tell them, you are in a position to close quickly. Fully approved. Support this position with documentation if you can. Tell them, the seller has 5 working days to consider your offer, after which you will walk away as there is another house you are looking at that you wish to bid for if your offer won’t be accepted. That you wish to find a house sooner rather than later, and need to move on… You may be lucky, and the 315 is either non-existent or wishy-washy eg. other bidder not pre-approved for the full amount etc. Play your card as strongly as you can muster, know it’s a long shot, and be prepared to walk away…

Thanks for all the useful advice. Much appreciated.
I made the offer 320k, told the EA we’re fully approved and in a position to move quickly, this house was sale agreed previously so hopefully the vendor wants to move quickly.
The EA did indicate that the vendor is hoping for more so we don’t have much hope but it’s worth a try. We’ll walk away if it’s not accepted.

Good luck - Hope you get the house.