Tactics - FTB would appreciate advice

beckstrous

Hello,

I'm hoping folk can help us out here. My boyfriend and I are first time buyers and we've only just started looking. We have a deposit of more than 10% and a joint income of just under 60k and a rolling contract on our rented place. There is no pressure to move so we want to get the right place, and we are still saving to build the deposit up further.

We are in the South East and looking in and around Guildford/Godalming/Farnham area/Ash Vale ideally and also considering parts of Berkshire and Hampshire (maybe Farnborough, but not Aldershot). We think that the most we can stretch to is £175k, so we are looking on the web at properties up to £190k with the view to making offers. I know there's no fixed rule but I've read on here that people usually offer 90% of asking, and 90% of £190k is £171k, so we are using that as a basic rule of thumb but trying to look at the properties carefully before enquiring to make sure they're not going to be out of our league.

We have seen a few we like - not loads, as the EAs tell us the market is slow this time of year and also because we want a 2-bed house rather than a flat it's harder to find something at the right price. But we think this is the right thing to do as we want something for the future. We are interested in getting a place that needs a bit of TLC and doing it up but all the ones we enquire about have already gone even though it doesn't say so on the web.

My mum, who has a bit of experience in buying & selling, says the sort of thing we are looking for flies off the shelves (so to speak) and sometimes goes before it even gets advertised. Therefore what are the best tactics to employ to ensure that we hear about these properties in advance? Do we keep phoning up the EAs, keep visiting them, try to make ourselves known? I would really appreciate any advice especially as I know there are a few EAs on this board. We are not in a hurry and if we have to wait a few months it doesn't matter because it means we get to save more, but I do get the feeling we need to be a bit quicker off the mark and know about tactics so that we don't miss out on a really good opportunity.

Thanks

suki1964

Do indeed make yourself known to the estate agents.When we were FTB we went in to all the agents nearly every weekend.I found having a fax machine invaluable as once it was known what sort of property I was after they would fax details the minute something came on the market so I was often the first to view. Leave them as many contact details as possible - mobile, office, email etc, the quicker they can contact you the more chance you have

Heth_2

Have you been to see a bank/building society to see how much they will lend you? Of course you might have other financial committments, and you've got all the fees to budget for as well, but i would immagine they might lend you more than you think.
We have been househunting for a while, and recently found two places we were very interested in. The first was 160k and they wouldn't even think about an offer just over 150k, the second was 150k and we have managed to get it for 145,500 (and like you we are ftbs, no chain, rolling contract, large deposit, mortgage agreed in principle). Of course you can offer 90% but just don't assume you will get it for that. You might need to be prepared to offer quite a bit more if you really want a place.

AndrewSmith

I have to agree with Heth. You should put yourself in the position of having a mortgage pre-agreed. Use a local broker as he will have wider access than an individual bank.

You mention that a number of properties sell before being marketed. This is true. When I was an estate agency broker (for 8 years) I used to have a file of fiorst time buyers who I had pre-agreed for mortgages. When any new property came onto the market the Branch Staff would come to me first to see if I had anyone for whom it was suitable. If not then it would go onto the open market.

If you go to a broker get the broker to call the agents and keep calling them every week. This will allow him to present your case in as best light possible to the agents as a good proposition to sell to you first, and will cut out the normal 'sales' spin from the agent.

I do this for clients all the time, even place offers on their behalf, and it is 95% of the time well received by both client and Estate Agent. (note to the site regulators, I am offering generic advice on a service poster should ask her broker to perform, not touting for business).

Hope this helps

Andy

beckstrous

Thanks, everyone, for the responses.

I must admit I'm a bit confused about the whole process. We've spoken to a broker but got the impression that we needed to have a place in mind first - perhaps we misunderstood. If you get pre-agreed for a mortgage of, say, £160k, and then you want to make an offer for a place less than that, will the EA try to get you to up your offer, knowing that you have pre-agreed a higher mortgage? I guess what I'm trying to find out is whether or not you can still say "this is the most we can stretch to" even if that's not true?

AndrewSmith

Not always Beck,

The way I would play it as a broker is call the agent tell them you have a mortgage agreed ( but not say how much) and imply that the property is just over your budget.

Then I would push your position forward, First time buyer, you can close the bottom of a chain, mortgage offer within 15 days, nothing to sell etc.

I would then submit an opening offer of lower than the asking price. Assume you see a place for £160,000. The opening offer would be in the region of £155,000, telling the agent that you are keen to buy it and have chosen that property to offer on, however your budget will only allow £155,000.

We then sit and wait for their response and so the game begins.

Ultimately you would be expecting to pay around £156,500-£159,000 for a property on the market for £160,000.

There will always be the exception where a low offer is accepted however I can only speak from my own personal experiences.

The trick is to never overplay your hand.

Hope this helps

Andy

Pinkleylandii

Try auctions, look around the areas you are interested in and if you see any old disused/ill repaired buildings contact Land Registry to find out who owns them or ask people thereabouts, they might be willing to sell, approach organisations such as Orchard & Shipman who are community management agents for councils and they look after private properties which are leased to councils. They sometimes have property to sell - not sure if they cover your area. They do the south

beckstrous

Thanks again. I had no idea that brokers contacted EAs on the buyer's behalf. I guess we have been a bit naive so far. So you don't actually have to show the EA the agreement in principle?

AndrewSmith

No all of them do Beck,

Some will though, and I for one, never show the Agreement in Principle to the Agent. That's as good as handing them a blank chequbook

Andy

claz

we didn't have to show then our mortgage in principal until our offer was accepted and then it was to prove that we were offering a price that we could afford.

your solicitor will need proof of your savings eg. a statement so that they know that you have enough money for the deposit, this is usually before you exchange contract

i'm a ftb and i know its really confusing, if you get a decent mortgage broker ask them to explain the whole process to you, from making an offer to moving in

and a mortgage in principal is vaild for 6 months i think so that is plenty of time to look for a property so get a decent mortgage broker to come and see you

AndrewSmith

Hi Claz,

A decision in principle is usually valid for 30 days, while a formal mortgage offer is usualy valid for 6 months

Cheers

Andy