Just placed an offer, rejected

reef

Hi there,

Myself and my partner have recently placed an offer on a house we really like. We're first time buyers with a mortgage in principle and the ability to move whenever required. The house we're offering on is up for £132,000, however the last house to sell there was a similar one for £135,000 back in May 2007. Going by the Land Registry figures and the figures for this area, the house would be worth around £122,500 about now. My first offer was £120,000 with the plan of going to £122,500 if it was rejected (it was).

When the estate agent called to tell us that the first offer was rejected they basically said the vendor wanted an offer closer to the asking price and a higher offer had been placed by someone else. Im a little skeptical of this, as surely when I placed my offer that day if it was lower than an existing offer they would have said? I assume this is just a trick (though it could be true) to get more for the property. Although the person selling is just moving elsewhere with her partner so doesnt have to have to buy, they did buy in Feb 2006 for £125,000. I have a feeling this is what they are holding out for.

I was thinking of going in again today or tomorrow at £122,500, saying that is my maximum I can go to and leaving that offer on the table?

Any advice?

Many thanks

Pssst

The EAs are bluffing. EAs cannot be trusted and their interest is to make themselves money and sell houses for as much as possible.

I would rig for silent running and leave it for a day or two and see if they get back to you. If there is an offer,presumably they will progress it?

The trouble is that everyone expects to make a profit on selling. People will not appreciate the actions of market forces. If we say that house prices will always go up them presumably at some future date,that house will be worth £1m ??

If i were you id say that you are viewing other properties also and that at this stage,your final offer is....£22,500 or perhaps £23,000 to save face on their part? Then rig for silent running but keep your periscope up and trained on that house.

QTPie

Sooooo hard to know really.

As for how accurate Land Registry prices are to "current value", then this varies from area to area: many areas are now down to 2004 prices, some lower, I would be happy to be at 2006 prices here... :rolleyes:

At the end of the day, you have to work out how much that house is worth to you, go for it and stick to it (making a "last and final offer" looks very silly if you go on to increase it a couple of days later... ).

How long has it been on the market for? If it hasn't been long, then the sellers are unlikely to settle for a "low" (or what you and I would consider "reasonable"...) offer quickly. Even if it has been on a year, some sellers are just not realistic and/or motivated to sell... Not much you can do about that (if it is the case) - either meet their demands or walk away

Without knowing your area or the property, offering at £122,500 sounds reasonable (IF you have a good deposit and are both financially secure and buying this house for the mid to longer term - you do NOT want to have to try to sell it in a couple of years...). There are very likely to be further drops in the value of property over the next year (no-one can predict for certain): you need to factor that in (and the possibility of rises in interest rates) and feel happy with the price that you have paid now. Buying a house is about a LOT more than just it's bottom line value, BUT you want it to remain affordable, to not become a burden or regret it in the future.

If you leave the offer on the table, then they may just leave it there as security - if you time limit it (2/3/4 weeks), then it gives them a sense of urgency to reconsider... which may or may not help (certainly within 4 weeks, assuming they don't get any higher offers, they might be getting "rejection remorse"...).

If this house is "the one" and you are happy and financially secure enough (hope that mortgage is fixed rate...) to go to £122,500, then make that your "last and fiinal offer" and re-affirm your position ("FTB with mortgage in principle"). IF they go on to reject it, then you have the option to leave it on the table or maybe time limit it.

Good luck
QT

reef

Hi there,

Yes we can comfortably afford the mortgage. It would be around 25% of our combined take-home pay leaving us with plenty of room to live and for interest rate rises in future. We'd also be in the fortunate position to be able to build up our savings again or overpay on the mortgage.

We have a 10% deposit and our mortgage will be with Natwest on their 5 year fixed rate mortgage at 5.99%. They had no problem giving us the agreement in principle as we both have excellent credit ratings, have no debts and earn enough that we only have to borrow 2.75x our combined salaries. Our jobs are also very secure so we're in a good position.

Ive decided to leave it for today and call tomorrow with a final offer of £122,500 and reaffirm our desirable position. Im going to say that we cant go higher than that and leave the offer on the table for a few weeks. The house has been on the market around 3-4 weeks, but the lady who owns it is desperate to move as she wants to be out before September as her son is starting secondary school then.

Fingers crossed we'll get a positive result, we really want the house and feel that £122,500 is whats its worth but are prepared to walk away if we dont get the price we want.

QTPie

Sounds like a good approach to me. Very good luck and let us know how it goes.

QT

Ladypenelope

EA's are obliged to tell the seller about every offer they receive (high or low) so I don't think it would be a bluff.....

Pssst

Ladypenelope wrote: »

EA's are obliged to tell the seller about every offer they receive (high or low) so I don't think it would be a bluff.....

In an ideal world yes....but EAs will always duck and dive to line their own pockets.

Running_Horse

The extra commission an EA might make from such a tactic is not worth them losing the sale altogether. All the talk of what other houses sold for and when is irrelevant; what is the house worth to you today? If you and the seller cannot agree a price, then you can't afford it and must move on. You never know, this other sale may fall through and you might get lucky.

lovethymini

Previous property prices are interesting but not as useful as looking at comparable properties on the market at the same time, after all - this is what dictates the recommended marketing price.

For instance, anyone looking into our property's recent history will see that we have just sold for £217k but we bought it in Feb '07 for £219k, having installed a new kitchen and bathroom.

If you see what I mean...?

reef

Ive just placed a second offer of £122,500 and told them this is the absolute highest I can go.

Fingers crossed

reef

The second offer was rejected aswell. The Estate Agent said this time that the seller had already rejected a higher offer than my second and that they want something closer to the asking price. They wouldnt tell me how much however.

I said Id leave the offer on the table for a few weeks while we view other properties and reaffirmed that we are first time buyers and able to move quickly.

It could go two ways with this property, it'll be snapped up quick by someone willing to pay the asking price or stay on the market for a while if the owners wont budge. We like the property but will walk away now and maybe try again if its still on the market in a couple of months.