first home buyers negotiating-help please!!

sam77_2

I was hoping for some advice:

My wife and I are first home buyers and were home hunting for some time now. Few weks ago, we found a place which she quite liked and after discussing, we decided to make an offer. The vendor eventually agreed to a price about 8 percent below asking price. Researching the current market further we started having doubts that we will be paying too much...We can't afford losing the money on the house and we don't know what to do....We also got freaked out about the amount of money we will have to put in the place, as the vendor kindly removed everything which could be removed from the house-kitchen fittings, whiteware etc.

What would you do in our situation?
Should we withdraw the offer and keep on looking? Should we press for reducing the price further?

I would appreciate any ideas,
thanks
Sam

Raffles99

Is "quick liked" good enough, given that you say you can't afford to lose money?

If this is not the house of your dreams, you should push for more. Withdraw your offer and go in another 5% or so lower. Perhaps wait until the day after the next set of Halifax figures are out. If the vendor refuses, consider withdrawing completely and either a) going back in 2 months with the same offer or b) looking for something else.

The worst thing to do now is buy a property you are not in love with and do not see yourself keeping for 10 years, because otherwise you run a real risk of negative equity. Over 10 years you should be OK, and if you love the house enough you wouldn't mind even if you did lose some money.

beingjdc

sam77 wrote: »

We can't afford losing the money on the house

If you mean that literally, you shouldn't even be thinking about buying anywhere anytime soon.

People assume that getting somewhere for 10% below asking price means they're ok if the market falls by 10%. It doesn't - the new asking price will be what you paid, and you'll sell for 10% that. Plus lawyers and estate agents.

If you don't mean it literally, then 92% of asking price is around the current average selling price.

ad44downey

A 8% reduction in the sale price is no good when house prices are going to fall at least 30%.

mr.broderick

ad44downey wrote: »

A 8% reduction in the sale price is no good when house prices are going to fall at least 30%.

I am astonished that people can make these wild predictions with no substance ps congratulations to spain this evening on becoming euro champions 2008.

ad44downey

Not wild at all. In fact I was being rather conservative. In recent months all the relevant mortgage lenders, economists,etc have predicted such falls and they are beginning to happen Personally I reckon they'll go down about 50%.

So the OP needs to radically renegotiate DOWNWARDS.

mr.broderick

ad44downey wrote: »

Not wild at all. In fact I was being rather conservative. In recent months all the relevant mortgage lenders, economists,etc have predicted such falls and they are beginning to happen Personally I reckon they'll go down about 50%.

So the OP needs to radically renegotiate DOWNWARDS.

there

Buddy if houses fall 50% .... Trying to find nelly will be the least of our problems..

sam77_2

Hello all,

Thank you for your replies. To answer raflles99's question, we like the place a lot, although it does need quite a bit of work. So for us, the question is really whether we aren't paying too much considering the way the market is going.

Legally, we haven't yet instructed sollicitors. Am I correct in understanding that this means we can still change our offer?

Also, we didn't state in the offer any 'subject to...' clause. If we decide not to re-submit an offer, can we still legally inform the vendor that we will take the property provided that he does some refurbishment to it or contributes towards refurbishment?

Thanks for your comments!

Sam

wymondham

Raffles99 wrote: »

The worst thing to do now is buy a property you are not in love with and do not see yourself keeping for 10 years, because otherwise you run a real risk of negative equity. Over 10 years you should be OK, and if you love the house enough you wouldn't mind even if you did lose some money.

Whilst I can see why you make this point, moving voluntarily is not always the case. If the OP HAD to move due to job/health/pregnancy etc, then negative equity will effect them, pretty much immediately - lets face it if you had to move then things have gone pear shaped somewhere, so negative equity on top of this is a real problem!

Lose your job and be in negative equity and you've got pretty much no way out - double whammy!! I can see this becoming a big problem leading to lots of seriously desperate people.

Everyone who buy's now, or in the last few years could be exposed to negative equity if their circumstances take a change for the worse .... lots of posts overlook this... don't assume you're immune!

BenL

You can do what you want with your offer until you exchange contracts (this is the legal pen to paper part).

This includes after your solicitor has performed all the relevant searches and enquries to your satisfaction.

Your solicitor will explain what they are doing and at what point you cannot backout without penalties.

penguine

If you suspect you're paying too much, then you probably are.

Have you checked how much other houses on the same street sold for? You can find actual sold prices (Land Registry info) on sites like rightmove. Find houses similar to the one you're buying and look at prices going back several years. Then take a guess as to whether prices are going to fall to the levels of 2005 ... 2002 ... or further...