is 20% under the asking price a cheeky offer

spend_thrift

Re-reading that, there's a lot of numbers in that post - so here's a summary:

£150k - my offer (88%)
£154,500 - my current agreement in priciple max (91%)
£160k - my potential agreement in principle max if I can stretch, also what the EA says the vendor needs to move on (94%)
£161,500 - what the EA thinks it should sell for (95-6%)
£169,950 - asking price (100%)
£170k - what seller wants
£176k - seller bought for in 2008

myhouse_2

If you're confident about your valuations and willing to increase your offer, then go ahead and do that - no harm done. Since they're likely to reject, you should be ready to walk away from it. There's nothing to be gained in dragging out negotiations with an unrealistic seller.

LilacPixie

would you be comfortable paying the higher price for the property? Do you think your current offer is fair?

myhouse_2

Chris2685 wrote: »

One thing that seems to have been missed here, and I think it is the most important, is that a house is a home. If you are buying for investment, then offering a very low price and losing out may not matter, but if you set your heart on it as yours and your families home for the next 10-20 years (f not not more) then I would try and play it so you actually DO get your offer accepted!

Never been convinced by this argument. A house should be a home AND an investment. While it may work out well for some people to overpay on their biggest purchase, generally it's wiser to think with the head as well as the heart.

spend_thrift

LilacPixie wrote: »

would you be comfortable paying the higher price for the property? Do you think your current offer is fair?

My current offer is what I thought I could afford based on speaking to one mortgage advisor, so I was really taking a punt to see if the vendor was interested and at the time it was my best shot.

I'd be willing to increase the offer to 94% (which is £160k) if I can get it from a lender - I need to work out the best way to do it though. I'm inclined to give them my maximum offer now and tell them that I have no room to bargain, although giving them a lower offer and then increasing could create a better impression... there goes the procrastination!

RichPyke

20% is fine, I just went in at 20% under, which the EA told me was about right due to the reasons I gave for the low offer (decorating costs, needs new central heating & hot water, next to railway, house in same street sold for less etc). Was refused but the seller doesn't need to sell, he just wants to sell... can see it being a battle to be honest, and that fact has put me off slightly as he may back out at any time after a sucessful offer...

spend_thrift

Just a quick update:

I put in an offer of £154,500 (91%) which the vendor rejected. The EA told her it was my maximum, and now the vendor is talking about taking the property off the market for a while (until next year or so).

My mortgage broker has just told me that the lender has altered their criteria, so I'm no longer eligible to borrow more, and that's the maximum I can get. The only way I could borrow more, would be to increase my deposit to 25-30%, which ironically would mean that I would no longer need to borrow any more!

It sounds to me like the vendor is just fannying about and isn't actually that keen to sell. Waiting for a while is fine, since the longer I am living with my parents the more I can save, but I don't want to do that for too long (ie I'd like to be in my own place by the start of 2011).

Predictions for the market are for another 5% drop before the end of the year, so my 91% offer could look like 94% by Christmas!

spend_thrift

LilacPixie wrote: »

would you be comfortable paying the higher price for the property? Do you think your current offer is fair?

My current offer is the most I can afford at the moment, although I would be happy to pay enough to allow the vendor to move on. With the current predictions in house prices suggesting that they're set to fall another 5% by the end of the year and even further in 2011, I'm reluctant to strain my finances too hard and shoot for the asking price since I'd be heading for a loss and possibly negative equity pretty damn quick should the market perform according to predictions.

Arthritic_Toe

% of the asking price is irrelevent. Asking prices vary enormously, some are realistic some are not. If a house has an asking price thats 50% over its value, offering 80% of it is still a bad idea.

You need to forget the asking price and try and figure out what it is worth right now and offer accordingly.

westlondonbuyer

If you're buying a place at the very top of your budget, don't also buy a place that needs work. If the economy does go the way it's being predicted, a depreciating asset which requires further expenditure is going to be a financial nightmare for you.

My mum is caught in this trap. She bought her retirement place for £x90k, estimating it needed a further £50k of work. Unfortunately, the market where she lives has completely crashed. Her next door neighbour's house is immaculate... and is on sale today for 50k less than she paid for a house in a shocking state.

My mum has already spent £20k just making her place habitable, but now can't bear to "throw good money after bad" and get the job finished. Her house is like something from DIY SOS:(

Ironically she can't quite understand that she sold her previous home at the top of the market in order to downsize, and is therefore well ahead overall...