What to do when buying a property in a competitive scenario
Published Mar 4th 2013
3 mins read
The UK property market is always the subject of fascination and debate, but for all the hesitant discussion surrounding house prices, as a sweeping generalisation, it is worth noting that there is more property available now than there was a year ago.
Sensibly priced houses sell quickly and exceptional houses sell for good money, whereas overpriced houses just won’t shift. In fact, there is some evidence to suggest that getting the asking price wrong in the first instance can be costly in the long term. Fellow industry experts are hypothesising that an incorrect pricing strategy can cost sellers 10-20% of the value that they would have achieved if they had got their asking price right first time.
So if you are one of the many buyers paying little attention to the expensive looking houses on the market and waiting for the perfect, affordable gem it may, or may not, come as a huge shock to you to realise you are not alone…
Being in a competitive scenario can be very stressful and one of the best things you can do is try to establish as much information as you can about the other parties involved and then tailor your bid to suit. Advising on the specifics of a bid is a case-by-case project, but in general the best thing you can do is establish from the selling agent what it is that the vendor wants to achieve (which is not necessarily just a target sale price, but can include specifics such as flexibility on moving dates), research the real value of the property and then work the numbers from there.
If you are up against cash buyers you may have to be punchier with your numbers. Cash offers the vendor certainty and speed – the dream combination. If borrowing is involved, try and speak to a broker and get an offer in principal before making your bid.
Try to make your bid in writing; include an outline of your position and accompany the letter with any supporting paperwork that you can pull together – a bank reference, proof of your deposit or a letter from your broker – all of these things will give the seller comfort that you are committed to their property and that you are in a good position to buy it. Don’t forget to mention why it is you love the house – most people want to sell their home to someone who will care for it as they have.
If it comes to sealed bids then the best advice I can give is: make sure you know your subject. Research comparable values, the cost of building works and any necessary planning details, ask as many direct questions as you can of the selling agent to gather information on the vendor and other interested parties and then all that is left to do is to put your best foot forward. Make sure that if you don’t win the bid it’s because someone has deeper pockets than you and not because you were trying to be too clever. Likewise, if you have done your research then you will know where your upper limit is. Set it and stick to it.
Just remember that the money is important but it is often a combination of a good bid presented and supported in a professional manner and a good rapport with the seller and their agent that will help you win the day. If there are several bids at around the same value, all of these can help to tip the balance in your favour, even if your bid isn’t the highest.