Offers on a £110k FTB??

Gareth83

I have got a mortgage in principle in place and have now sorted a 15% deposit.

My partner and I have found a property we like and would like to put an offer in.

Property has been on for 6mths and the last sale fell through as the buyer couldn't sort his mortgage.

It is a leasehold with 851yrs remaining so that's not a problem and have found out it will cost £650 + fees should we wish to change to freehold

My broker suggests I should be cheeky and start at £90k (82%) but I feel I may lose the property as I know from overhearing that there are several viewings over the next few days.

Andrewsmith suggests in his house buying guide:

An example of 'the norm' would be something like an asking price of £120,000 with your opening offers beginning at £105,000 - £108,000.

so that would equate to £96,250 - £99,000 (87.5% - 90%)

I wouldn't pay any more than £100,000 to be honest with the cheaper the better as there are several other similar properties but not sure how to play it.

This guide was however back in March 2006

The same property would have been up for around £130,000 in this area so I guess the asking price is reflective of the current market.

The EA has said the lady will take an offer of £100,000 so there's obviously some margin for negotiation

Suggestions???

Millburn_farm

ermmm' you overheard !!!!!!

follow your broker, you can always up the offer; especially if there are similar properties in the market

It is a buyers' market and some at the moment; even in my part of the world, (North-east of Scotland) sales are down; and unless this house is unique, what have you to loose???

LiGhTfasT

I'd start at 98k if i liked it and stop at 102k. Hopefully you'll have better luck than me im not budging from 106 offer on 115k house and getting no where.

Gareth83

Millburn_farm wrote: »

ermmm' you overheard !!!!!!

yeah I went down to take a look at the lease and as I was there someone came in to discuss similar properties and booked a viewing for Wednesday

follow your broker, you can always up the offer; especially if there are similar properties in the market

do you think it's too low though??

It is a buyers' market and some at the moment; even in my part of the world, (North-east of Scotland) sales are down; and unless this house is unique, what have you to loose???

But obviously most of this is due to the mortgage availability, I think the house prices themselves reflect the market

Gareth83

I have just drafted my letter:

Dear Ms Seller,

Re: House, Town

SUBJECT TO CONTRACT

My partner and I have decided that your property is the one we wish to purchase for our first home and would like to make an offer.

As a first time buyer I am in an excellent position to proceed quickly as I currently live with parents and have no property to sell. I have a 15% deposit with a mortgage agreed in principle which can be confirmed by ***************. I would be able to instruct my solicitor immediately upon the offer being accepted, who have stated they are able to complete within 28 days.

I would like to make an offer of £94,750. I feel that this is a fair price for the property as we wish to budget towards the installation of double glazing and the updating of the decor prior to the arrival of our first child this coming July. I would also have no objection of the tenure remaining as leasehold.

My offer is subject to survey and the property being withdrawn from the open market immediately with all future and current viewings being cancelled and a sold board being erected within 48 hours.

I hope that my offer is acceptable and look forward to hearing from you shortly.



Yours sincerely

simple2rent

Before putting a formal letter in maybe you could try talking to the EA. My approach before has been to tell the EA my budget is limited, and you need an idea as to whether the vendor would accept £90K (as per your broker's advice). Emphasise to the EA you have finance in place to complete fast, also make sure they don't think this is the only property you are interested in buying. Once you get a feel from the agent as to the lowest price the vendor might accept put your offer in to them at a figure a little below this.

Key is to keep the EA on your side, they want to make the sale, if they know you are serious and you have options to buy another property through another EA they will want to help.

edgex

If the max you want to pay is £100k, why are you starting at £95k?

Start at £90k, as your broker has suggested, & state that you have the finance in place.
If thats not acceptable, you can then raise to £95k, & youve still got another raise before you get to your max.

Idiophreak

Start at 90, add 5, then increase in halving increments - so
90, 95, 97.5, 98.75, 99.37 - will make it pretty clear they're not getting £100+ out of you...

MX5huggy

I would like to make an offer of £94,750

Then no where in your letter do you make an offer.....
Change it to "I am offering £94,750" Or "my offer is"

Gareth83

Well I dropped the letter exactly as above (was already printed) off this morning to receive a call from the EA at 11.30 that the offer has been rejected.

I asked for justification and how much the vendor is likely to accept and they have said she is looking for offers around the £100,000 mark.

I guess with a lease of 800 odd years that wont affect the value but I feel that the kitchen and bathroom would need updating at some point as well as the fitting of double glazing. Then there's also the carpets and decor etc. etc.

So my initial offer of £94,750 was rejected.

How much to offer next then? considering £100,000 is my theoretical max and I hope that the surveyor will downvalue anyhow.

My broker has said meet them half way at £97,500 or so

Should I give it a day or two prior to submitting?

I know that there are viewings tomorrow but don't want to appear too hasty or desperate.

I guess it would be best to submit my next offer in person and listen to the call being made?

Should I put a time limit on any further offer?

What do you guys think?

hethmar

Dont know Gareth, you are the one on the spot, you know if the house is worth £100k to you. Have you checked what price it was sold for previously? How does it compare with other houses sold recently in that road? More importantly,. can you afford it at £100k - I noticed you said you managed to get together a 15% deposit - was that saved or borrowed? Are there any other places that are cheaper that may be worthwhile checking out.