Offer price tactics

NaughtiusMaximus · 7 December 2017 at 12:06PM

What are people's thoughts on the best tactics when attempting to negotiate a price with a vendor?

Say for the sake of argument I see a house listed at £200k but the most I am prepared to pay is £190k. Conventional wisdom would be to make an opening offer at a point below 190, maybe between 180 and 185, and negotiate from there. Is there a benefit in instead going straight in with the final offer of 190 and refusing to budge from there, do you think this gives the impression of being a more serious buyer?

There's probably no right or wrong answer here, I'm just curious as to your opinions. I'm currently leaning towards the latter option but that may be coloured by the fact I dislike haggling any more than I have to.

aneary · 7 December 2017 at 12:08PM

I would go in lower tbh then if the EA asks for Full and final offer you have somewhere to go up to.

Surrey_EA · 7 December 2017 at 12:10PM

In my experience most sellers are conditioned to reject the first offer, so I would suggest the former approach might work best.

As ever, it depends on the individual vendor, and the particular property in question, as well as what other competition there is.

hazyjo · 7 December 2017 at 12:17PM

I'd try a combination of both - go in at £185k (presuming you think it's worth that!) and say you don't think there's much if anything left in the pot. They always try to get more so maybe then jump a couple more grand. Or try £186k to sound a bit less like you're jumping up and offering in £5k increments.

If it's been on the market at that price for months, I'd go in lower or hold out for a reduction by them if they didn't accept my offer. I'd not leave it on the table or they'd be less inclined to drop the price later on.

ReadingTim · 7 December 2017 at 1:06PM

I think most vendors expect a buyer to go through the pretence or charade of haggling, even if it is a largely symbolic - an elegant if meaningless courtship dance if you will.

Not to do so might mark you out as a little odd - and a single "take it or leave it" ultimatum would probably invite more people to leave it than take it. I think your first approach is therefore more sensible.

Mutton_Geoff · 7 December 2017 at 1:10PM

Also bear in mind an offer is not just about the price. Along with your offer, let the agent know you've employed a fast legal team (not the cheapest online conveyancers), you will take a view on some issues if they are time hurdles (eg obscure searches), you'll ignore trivia in the survey report, your finances are already in place, you've already sold and are in rented etc.

If you've yet to arrange finance and your existing property is not sold (if you have one), then you are not in as good a place as someone who is sorted and ready to go.

When I moved last, I had already sold, was near exchange, didn't want a survey etc and got a substantial discount off the asking price. There was another buyer in at full asking price but their sale had just fallen through so I was able to step in and secure the property at, to me, a very good price.

Lokolo · 7 December 2017 at 1:48PM

Just to have another view. When I was looking there were some properties that were extremely popular. At this point there wasn't much point haggling and starting low as there were always going to be others putting in offers.

For these I always just put in my final and best offer, a couple I lost out on as there were other bids higher, one went to final and best offers which I re-submitted the same offer and also lost out on, and finally I got one.

n217970 · 7 December 2017 at 1:49PM

I've had success with making a nice rounded offer - say 185,000 expecting it to be rejected before going back with a "I've done my sums again and its the very top of my budget" offer of something weird like 188,672 - making it look like I've been checking down the back of the sofa for spare cash.

Its worked 2 out of the 3 times I have done it, in both cases I would have been prepared to pay 3-5k more. In the case it didn't work I walked away as vendor was unrealistic on price after being on the market 12 months. It was repo'd 6 months later and sold for quite a bit less then I offered and hugely less then the asking price. Mad.

NaughtiusMaximus · 7 December 2017 at 1:53PM

Thanks for the comments and useful advice everyone, interesting to her your views.

Mutton_Geoff wrote: »

Also bear in mind an offer is not just about the price. Along with your offer, let the agent know you've employed a fast legal team (not the cheapest online conveyancers), you will take a view on some issues if they are time hurdles (eg obscure searches), you'll ignore trivia in the survey report, your finances are already in place, you've already sold and are in rented etc.

Oddly enough pretty much all of those apply to us, the sale of our old property has now completed, we have sufficient funds in the bank to allow for a 30-35% deposit, for conveyancing we will use the same solicitors we've used twice before. Good tip about the surveys, we will likely go for a full buildings survey but the aim is to identify major issues, we have no intention of attempting to renegotiate the price based on survey findings which would come under the categories of routine maintenance or 'to be expected for a property of this age'.

AdrianC · 7 December 2017 at 1:59PM

There's as many "right ways" as there are vendors.

TBH, if I was the vendor of a £200k property, and your maximum was £190k, I'd be more inclined to consider it if you came straight in at £190k and said "Look, this is it, take it or leave it". If you say £180k, then go to £190k (especially if you go via £185k), I'd be more inclined to think "They're bluffing and will come nearer".

hutman · 7 December 2017 at 2:34PM

depends on the demand for the property; it has an inverse relationship with haggling power.

if the property is starved of viewings and offers, assuming the estate agent is not lying, then i would go 20% below what your max is. another factor to consider is how desperate the seller is; perhaps this is the best scenario for those hoping for some savings.

the market is somewhat begrudgingly moving towards a more even playing field between seller and buyer. transactions have dramatically reduced and the brexit waiting game has assumed. good news to some extent for our generation rent of first time buyers!

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