Buying a house - first steps

notevenlondon

#2501

DynpkGc


#2502

Sorry if this has been covered but is there a general rule for how much over the valuation you should go when it comes to closed bidding? I really loved the first place I viewed this week but it looks like I’m going to be competing with at least four or five other buyers.


#2503

Can massively, massively depends. With massive caveats.

Scroll up to response #2356 (and the follow-on) for my general two penneth.

More specifically, consensus for Glasgow, that I’ve come across, seems to be that up to 10% over the survey valuation isn’t uncommon in a popular area, and it can go beyond that without to much. Can be more than that, too, but i’d advise you to carefully consider exactly why you’re willing to go that high (or even over the valuation at all), to make sure it’s for trains more substantial than just because you simply want to stand a chance of getting it.

A year ago we bid 13.5% over the valuation (cos we intend this to be our home for probably a couple of decades or so and it fit the bill for what we wanted EXACTLY, with cherries on top) and apparently weren’t quite the highest, but the seller accepted our offer anyway (because I suspect he saw his younger self in us, compared to, maybe, a BTLer)

Ultimately, offering over the valuation is likely to mean that you’re deferring the accumulation of equity in the place° (and, if this is a first time buy) maybe accepting that you’ll be in negative equity for a bit. But something to be taken lightly, but if you KNOW it’s somewhere you’ll be for a while (or that you can specifically add value in some way) and your employment/income is secure, then you may be able to justify out.

Even further up the thread I’ve said she stuff about how utterly mad the psychology of second and third guessing what the imaginary other bidders will offer. Ultimately it comes down to you offering what it’s worth to you. There’s the risk that you’ll offer a substantial wedge more than someone else, it’s true, but if you’ve done the research on the local market and keep a cool head, you’ll not end up mugging yourself. Which is pretty standard across the board, really. Even when it’s not closed bids.

Good luck.

°disclaimer: deferring the assumed accumulation of equity in a place can be something you unwittingly get caught up in even if you’ve offered nothing over the survey valuation (or bought a place below survey valuation), if the local or national housing market as a whole takes a hit. Which isn’t exactly a risk to be completely ignored, considering our precarious Brexity economic future and the state of the UKs finances in general.


#2504

tl;dr 8.357%

Just re-read the post and noticed ^this. Woah, there. I’d be astonished if you end up buying the first place you view. Tread very carefully.


#2505

I bought the second place i viewed (and my first viewing wasn’t serious), I’d just heard so many stories of people who found a place they liked early but decided to keep viewing only to regret it, plus I’m lazy and it ticked all the boxes


#2506

where do people save their money?

I’m pretty sure my ISA is just losing me money but I dont have enough of it to make investments or anything.


#2507

like I literally make more getting the £3 monthly ‘reward’ in my current account for having a few direct debits and wages being paid in.


#2508

can you get a help to buy ISA? They’re basically the only account that will give anything decent AFAIK


#2509

sounds really tory


#2510

having a cat is pretty tory


#2511

earning interest is kinda tory. It’s free money though so might as well take it


#2512

Use up what you can from the likes of TSB, Nationwide, Tesco Bank and suchlike’s current account deals first, then looked into monthly saver accounts; e.g. TSB and Firat Direct pay 5% on theirs for a year (you can then move the money elsewhere).

In terms of Isas, remember that the first thousand pounds you earn in interest is tax free (and all interested is paid tax free) now, so there’s literally no point in them unless you’re getting near that threshold in annual interest.


#2513

Couple of other bits… @Aggpass is right on the money with Help to Buy if you’re sure the money is going to be used as a deposit. If you’re not and might want it for something else, don’t go near.

Also consider whether you need easy access account or not. I usually go with them because I want to know I can get at most of my money when I need, but other accounts pay much better - if you know you’re saving for the next 3 years minimum and you don’t need the money then once you’ve maxed out the kinds of accounts listed above, look to see if fixed rate or notice accounts are worth the hassle in terms of paying you more.


#2514

The fuck? I’ve been out of the ISA game for a long time and was looking at getting back in but if this is now the case how does an ISA now differ from a standard savings account with a higher than average rate of interest?

@DarwinBabe choosing between savings accounts at the moment is basically deckchairs on the titanic the way interest rates are. Have a look on moneysavingexpert and find an account that looks best for you I’d say (think the Post Office are doing one at 1.7% or thereabouts at the moment if you want the least Tory option).

Genuinely think Premium Bonds are as good a place as any to stash some money right now. As much as it’s unlikely it’s the only place where you’ve at least got a > 0% chance of getting a return above next-to-nothing.

(Although low interest rates swing both ways - yes, pitiful savings returns, but it means you can access mortgages with lower monthly payments than if rates were, say 4%).


#2515

Tax free if you earn more than £1000 interest across all your accounts. Which even with everything at 5% interest means you’d need an average of 20k in savings to notice the difference. I mean, fuck!


#2516

I had a Help To Buy ISA but only had it for like 2 months before I had to use it so it was totally pointless. Your solicitor will charge a (small) fee for processing it when you use it for buying somewhere.

Other than that, I had a First Direct saver, 5% on a year’s savings (£300/month is the max, I think) over a number of years. If you move any of the money from it you lose the interest.

But as everyone else says, interest rates are so low it’s basically all the same.


#2517

Ah got it.

I mean given what sort of sums we’re probably talking about putting away, debating what savings route is best is literally arguing the toss over £100 a year more/less return tops.

Unless you want to go down the investments route of course which is a different ball game. (I do not).


#2518

I have a not insubstantial amount of savings and am getting about .66% on my ISA. So you would need £150k+ to hit that threshold!


#2519

Don’t reckon a dabble in investments is sensible with brexit coming up. Maybe change all your money into euros, stuff it under your mattress then change it back to sterling when the exchange rate goes nuts in spring


#2520

If investing, usually rules apply; go with funds unless you really know the shares you’re looking at, do your research thoroughly before buying, and don’t bother if you’re not looking at 5 years plus. Picking international funds can get around the Brexit thing, unless you believe the global economy is going to suffer.