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FTB Advice - The 'offering' process, help please! (long post sorry)
MrDT
Posts: 951 Forumite
I viewed a couple of houses at the weekend. One was very nice cosmetically, but out of my price range, and wasn't really exactly what I'm after. The other is a bit run down (has been lying empty for a little while) but workable, and has a nice big kitchen and the outside space I was after etc and on at a lower asking price. I'm thinking of putting in an offer. I know, I know, but I'm thinking it through properly at least!
Initial asking price was 100k. I can't be too sure when it first came on the market as the agents have removed from rightmove and relisted a few times, but I'm pretty sure it came onto the market at least 6 months ago, maybe even up to 12 months ago.
The property has sold subject to contract once, the deal fell through, and it came back on the market with one of those hideous '100k with 5% deposit paid by vendor' deals attached.
Luckily that didn't last for long, and the vendor has just dropped to an asking price of 90k.
The house needs work. Nothing too major from what I could tell, but it needs work, mainly cosmetic. Very much a do-er upper, which suits me to a tee. No kids, no live in partner, just me, and what could be a nice project to occupy my weekends! I reckon I'd buy this house if they accepted 70k for it. And I think they might.
What I need to figure out is HOW to get them down to 70k. I wouldn't want to pay more than this, so it's important I get it right.
The EA has been helpful so far, and I'm meeting their financial advisor Wednesday to essentially have my sums backed up by the word of a professional; Idea being that the offer I put forward, although much lower than the vendor might expect or hope for, has been backed by a pro and is a serious offer they should consider long and hard.
Should I go to the EA affiliated advisor, cards on the table, and say "I'm willing to pay 70k for the house, I won't pay any more, this would be my first and final offer, lets go through the math"? Would I then take this offer to the EA to pass on to the vendor? Do people ever accept 'first and final' offers?
In fact, 70k seems a bit on the low side, but it's what I'd be willing to pay. It's what makes sense to me financially, and also covers me to some extent from further drops. 70k and I'd be happy, more than that would be a no-no.
Since the FA is associated with the EA I expect they will swap notes. What I need the EA to understand is that although I might be able to afford more than 70k, I don't intend on paying more than 70k. What I'm willing to pay is all that should matter to them, not what finance options I have available. How should I ask the agent to deal witht he vendor? Again, a straight up 70k first and final offer, or should I go in expecting to play a game of cat and mouse, some morroccan bazaar style haggling? If so, what do I offer? Similar houses were selling for over 100k back in 2006 (though of course they could have been in far better condition) so I'm thinking an offer of about 65k would be considered far FAR too low (even taking into account current conditions) that would take us back to 2003-2004 prices. 65k seems a very low offer, and I'd risk the vendor not even bothering with the haggling bit and writing me off as an idiot chancer. It does leave some room for manouver if they do want to play a game though.
Argh!
I know the vendor has stated that if the property doesn't sell in the next couple of months she will take it off the market, fix it up, and rent it out. This wouldn't be much use to the EA, they'd get nothing. Whereas if the place sells for 70k they'd get a percentage, a smaller amount than if the place sold for 90k, sure, but more than nothing, and nothing much is selling here at the moment, and nobody else has shown an interest in this property even... I'm kinda feeling that the EA might be onside with me here, it's in their interests for the vendor to accept a reduction, so do I deal with the EA straight and let them advise me on how to handle the offering process?
It's all very confusing!
All advice will be gratefully considered
Oh, and please don't all jump on me for thinking of buying too soon, the reduction I'm after is adequate to shield me from sleepless nights, the mortgage would be affordable, and I think there's a genuine opportunity at the moment to get a really good deal. Anyway, without some sales going through (at 78% asking price, 70% asking price last year) the haliwide stats wouldn't be as exciting would they?
Initial asking price was 100k. I can't be too sure when it first came on the market as the agents have removed from rightmove and relisted a few times, but I'm pretty sure it came onto the market at least 6 months ago, maybe even up to 12 months ago.
The property has sold subject to contract once, the deal fell through, and it came back on the market with one of those hideous '100k with 5% deposit paid by vendor' deals attached.
Luckily that didn't last for long, and the vendor has just dropped to an asking price of 90k.
The house needs work. Nothing too major from what I could tell, but it needs work, mainly cosmetic. Very much a do-er upper, which suits me to a tee. No kids, no live in partner, just me, and what could be a nice project to occupy my weekends! I reckon I'd buy this house if they accepted 70k for it. And I think they might.
What I need to figure out is HOW to get them down to 70k. I wouldn't want to pay more than this, so it's important I get it right.
The EA has been helpful so far, and I'm meeting their financial advisor Wednesday to essentially have my sums backed up by the word of a professional; Idea being that the offer I put forward, although much lower than the vendor might expect or hope for, has been backed by a pro and is a serious offer they should consider long and hard.
Should I go to the EA affiliated advisor, cards on the table, and say "I'm willing to pay 70k for the house, I won't pay any more, this would be my first and final offer, lets go through the math"? Would I then take this offer to the EA to pass on to the vendor? Do people ever accept 'first and final' offers?
In fact, 70k seems a bit on the low side, but it's what I'd be willing to pay. It's what makes sense to me financially, and also covers me to some extent from further drops. 70k and I'd be happy, more than that would be a no-no.
Since the FA is associated with the EA I expect they will swap notes. What I need the EA to understand is that although I might be able to afford more than 70k, I don't intend on paying more than 70k. What I'm willing to pay is all that should matter to them, not what finance options I have available. How should I ask the agent to deal witht he vendor? Again, a straight up 70k first and final offer, or should I go in expecting to play a game of cat and mouse, some morroccan bazaar style haggling? If so, what do I offer? Similar houses were selling for over 100k back in 2006 (though of course they could have been in far better condition) so I'm thinking an offer of about 65k would be considered far FAR too low (even taking into account current conditions) that would take us back to 2003-2004 prices. 65k seems a very low offer, and I'd risk the vendor not even bothering with the haggling bit and writing me off as an idiot chancer. It does leave some room for manouver if they do want to play a game though.
Argh!
I know the vendor has stated that if the property doesn't sell in the next couple of months she will take it off the market, fix it up, and rent it out. This wouldn't be much use to the EA, they'd get nothing. Whereas if the place sells for 70k they'd get a percentage, a smaller amount than if the place sold for 90k, sure, but more than nothing, and nothing much is selling here at the moment, and nobody else has shown an interest in this property even... I'm kinda feeling that the EA might be onside with me here, it's in their interests for the vendor to accept a reduction, so do I deal with the EA straight and let them advise me on how to handle the offering process?
It's all very confusing!
All advice will be gratefully considered
Oh, and please don't all jump on me for thinking of buying too soon, the reduction I'm after is adequate to shield me from sleepless nights, the mortgage would be affordable, and I think there's a genuine opportunity at the moment to get a really good deal. Anyway, without some sales going through (at 78% asking price, 70% asking price last year) the haliwide stats wouldn't be as exciting would they?
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Comments
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Oh, and please don't all jump on me for thinking of buying too soon, the reduction I'm after is adequate to shield me from sleepless nights, the mortgage would be affordable, and I think there's a genuine opportunity at the moment to get a really good deal. Anyway, without some sales going through (at 78% asking price, 70% asking price last year) the haliwide stats wouldn't be as exciting would they?
Sorry can't resist, prices are going to fall by far more than this as the credit crunch gets worse but if you are prepared and can afford negative equity then it might be OK in the long run. However when Japan entered stagflation house prices remained low for well over a decade and still haven't fully recovered.:exclamati:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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MrDT
I would see the FA and explain that you want to buy it for £65k due to all the work that is required.
Say that at a push you will go to £70k.
Good luck and enjoy all the hard work when you get it.0 -
Give the guy a break!
No idea - hope someone gives you good advice. I'd be prepared to be knocked back though; EA's work on what you can afford, not what you want to pay, in my experience. If they know you can pay more, but won't, they may not play ball.
Depends how desperate both EA and seller are, I suppose.0 -
Sorry can't resist, prices are going to fall by far more than this as the credit crunch gets worse but if you are prepared and can afford negative equity then it might be OK in the long run. However when Japan entered stagflation house prices remained low for well over a decade and still haven't fully recovered.:exclamati
Haha thanks for your response brit, I must say I was expecting it
I agree that prices in some areas may drop further, but all that matters to me is my specific area, I'm not interested in averages across the UK etc, I know where I want to live, it's in this area I'm looking to buy a 4 bedroom terrace for 70k. If prices drop further, so be it, I'll still be happy with my 70k purchase. Who wouldn't?
The place is future proof, it's what I'm after, and 70k would be a good price What I'm after is advice on how to handle the offers/haggling/bargaining stage of things as I've never done this kind of thing before, well, other than when buying and selling cars, and a house is a much bigger deal! (especially since my cars have all been sub £1000 bangers 
)
Cheers.
edit - tiny 2 beds are on for asking price of 92k or above in the area btw, most are over 100k, 4 beds isn't just me being greedy, the big townhouses here are cheaper than smaller houses believe it or not!!
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Wow - lucky you. 70K for 4 beds! You'd have to do serious time travel round here to get anything like that for that kind of price.
V jealous.0 -
edit - tiny 2 beds are on for asking price of 92k or above in the area btw, most are over 100k, 4 beds isn't just me being greedy, the big townhouses here are cheaper than smaller houses believe it or not!!
I dont think you are being greedy, in my early days I used to rent out other rooms in my house as it more than covered my mortgage.
It meant that I used to be able to wine and dine and still save most of my wages.
If you rent out the rooms to girls you never have to cook or clean as well.:T0 -
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I've just whizzed through your OP so you may have answered this already but why can't you just put in an offer of £70k? What's the worst that can happen? The vendor says no. As you've stated, you don't want to pay more than £70k so if you can't get it, maybe look at other properties. Remember that you're buying a home to suit your budget and not the other way round. Once you factor in repair/renovation costs, if it's above your budget then walk away. The worst thing you can do (especially in the current economic situation) is to overstretch yourself financially.
Good luck."A rich man is nothing but a poor man with money."0 -
Wow - lucky you. 70K for 4 beds! You'd have to do serious time travel round here to get anything like that for that kind of price.
V jealous.
Well, they're asking 90k, but I only want to pay 70k. Still, I know what you mean, some of the numbers I see on here really make my eyes water!! There are people on the 'saving a deposit' thread that could buy my kind of house outright with their deposits :eek:
Still, not everyone would want to live here! Quiet, ruralish, not a huge amount of employment, very low average wage etc etc. Still, I like it here and will settle here 0 -
Well, they're asking 90k, but I only want to pay 70k. Still, I know what you mean, some of the numbers I see on here really make my eyes water!! There are people on the 'saving a deposit' thread that could buy my kind of house outright with their deposits :eek:
Still, not everyone would want to live here! Quiet, ruralish, not a huge amount of employment, very low average wage etc etc. Still, I like it here and will settle here
Good luck.0
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