First time buyer- advice needed

wsharp

We are first time buyers, got mortgage approved and with large deposit in place. We saw a house which asking price is £194,950, and viewed the house we both like it. Then went back to the agent to say we like it and anyway they would lower the price, the agent told us that the lowest would be 190k,which we told them that we cannot afford that price, so we just left like that. however, the very next day first thing in the morning we got a phone call from the agent to say that actually they would accept offer between 185-180k.So we thought great, we'll have a 2nd viewing and put the offer down after that. We did 2nd viewing and put our first offer of 175k, which was turned down, then an hour after that we put 180k, which was turned down again. After this we thought with the current market not really worth to put more than 180k, but our mortgage adviser was more keen than us:rolleyes: kept contacting with the agent and found out that if we really want to buy the house they would accept 185k. So in the end, we did put down an offer of 185k, but surprisingly, they turned this offer down as well...so that's it we dont want to put anything more than that for sure. As we were lead all along by the agent to believe that they will accept an offer of 185k, but we would like to know why still been turned down. So today, I asked one of my friends to ring the agent to pretend that she was interested, and found out the couple is looking for extra 2k to cover their legal costs, etc.

What's your opinions on this?

Thanks

dopester

The Guardian, Wednesday 3 September 2008

Starting from today, anyone buying a home costing less than £175,000 will escape paying the lowest stamp duty rate of 1%. This figure is raised from the previous starting level of £125,000.

I'm not sure if this is up for change in the near future.

wsharp

dopester wrote: »

The Guardian, Wednesday 3 September 2008

I'm not sure if this is up for change in the near future.

It was already in place, and the house we are buying is more than 175k...thanks anyway

dopester

wsharp wrote: »

It was already in place, and the house we are buying is more than 175k...thanks anyway

Yes but you offered £175K and it was refused. By offering a £1 less, had it been accepted, you'd be saving yourself a further £1,750 by not having to pay stamp-duty.

Also I think houses at £180K, £190K, £200K level, are being nicely dragged down to the stamp-duty exempt level by market forces, and of course, by other sellers who will accept lower offers.

piggeh

wsharp wrote: »

We are first time buyers, got mortgage approved and with large deposit in place. We saw a house which asking price is £194,950, and viewed the house we both like it. Then went back to the agent to say we like it and anyway they would lower the price, the agent told us that the lowest would be 190k,which we told them that we cannot afford that price, so we just left like that. however, the very next day first thing in the morning we got a phone call from the agent to say that actually they would accept offer between 185-180k.So we thought great, we'll have a 2nd viewing and put the offer down after that. We did 2nd viewing and put our first offer of 175k, which was turned down, then an hour after that we put 180k, which was turned down again. After this we thought with the current market not really worth to put more than 180k, but our mortgage adviser was more keen than us:rolleyes: kept contacting with the agent and found out that if we really want to buy the house they would accept 185k. So in the end, we did put down an offer of 185k, but surprisingly, they turned this offer down as well...so that's it we dont want to put anything more than that for sure. As we were lead all along by the agent to believe that they will accept an offer of 185k, but we would like to know why still been turned down. So today, I asked one of my friends to ring the agent to pretend that she was interested, and found out the couple is looking for extra 2k to cover their legal costs, etc.

What's your opinions on this?

Thanks

My opinion is that both parties have discussed it and your mortgage advisor has advised them what your maximum is probably likely to be.

Tell them to go away until they decide 175k is a good price in a falling market but you're only going to keep the offer avaialble for a month. Then when they come back to accept offer them 170k instead.

penguine

I think it sounds like your mortgage advisor was overly keen to get his commission.

The sellers may be approaching negative equity and literally need every last penny in order to pay off their mortgage.

I'd keep looking, with a limit of £175k in mind to save on the stamp duty. As house prices continue to fall you're going to have more to choose from.

latecomer

Unless the property is unique I'd keep looking for something else and stick to your original budget.

macaque_2

wsharp wrote: »

What's your opinions on this? Thanks

I would forget this property and ask the agent for details of properties in the £300-350K range. Ok, so they are still above your budget, but that is changing rapidly. House sellers are being dragged kicking and screaming back to reality with each passing week.

For the first time in 2 generations, you will soon have the opportunity to buy a decent home without being paralysed with debt. My strong advice is for you to be patient.

wsharp

Thanks for all your advices, much appreciated.

At the current market, if asking price is 195k (for a 3 beds det house), how much would you expect to pay if you are a first time buyer?

We also looked at a Persimmon's development, they have plans for 3 beds det house, when we went to see the sales person, she said their advertised price is 190k, but for us as first time buyer will give 10% discount.

So my question is if you are in the market to buy a house, would you buy a 2nd hand which is more expensive or a brand new much cheaper?

whathavewedone

I think if I were a first time buyer I would be tempted to buy a newbuild house because of not having to do anything to it so there wouldn't be any hidden costs.

The only thing that would worry me is that the value of these properties is expected to fall by more than second hand properties. Even without that consider how dated the estate will look in 8-10 years time (when you might want to sell). If you look at estates built in the 90s, 80s and 70s you will see what I mean.

I would wait a bit to see how much further house prices fall. Save up a bigger deposit. If in a year's time you can get a 3 bedroom Victorian terraced or semi in good nick and a decent area for the same price that you can currently get a 3 bed new build then I think you would be getting better value for money. You might even get it for less.

kennyboy66_2

piggeh wrote: »

Tell them to go away until they decide 175k is a good price in a falling market but you're only going to keep the offer avaialble for a month. Then when they come back to accept offer them 170k instead.

This is an excellent tactic when you don't actually want to buy a house, but have plenty of time on your hands to waste and have some internet fantasy about being a great negotiator.

No doubt similar properties will continue to fall in price over the next 12 months but this kind of behaviour is delusional.

If I was a seller I would accept the £170k, let you get a survey, arrange a mortgage, engage a solicitor and at the point of exchange would then demand £175k.