How much to offer?

kiwi07

Fire_Fox wrote: »

Low offer, in writing not by telephone, clearly stating your strong position and your desire to move quickly. You are the dream purchaser!!

What whould you offer? Are there special form for offers?

kiwi07

Any more advice????

Francesanne

oki1875 wrote: »

So, what do you think is the best starting offer for my loved £129.950 flat?
I am a bit confused - 105 k or 110k?
By the way, I am the FTB, with cash and no chain. :j

Would have thought a reduction of £19,000 is a bit on the steep side. Don't think I'd be dropping price that much if I were the seller. Suppose it depends how desperate they are to sell. How much can you afford to offer?

Fire_Fox

westv wrote: »

Surely using the phone would be quicker then sending a letter?

Speed is not of the essence in the current market, and it takes half a day to type up a letter and hand deliver it. Anyone can go view a house and put in a cheeky offer by telephone. Anyone can not have their finances in place, anyone can be too lazy to write an offer letter and maybe too lazy to keep on their solicitors back. Anyone can rely on the estate agent to let the vendor know just how strong a position the prospective purchaser is in.

The OP is a first-time buyer - either your dream purchaser (no chain, no finances to worry about) or completely inexperienced in the property market, not knowing how to negotiate the pitfalls to a quick sale ... depending on how you look at FTBs.

In my experience a written offer stating the terms and conditions of the offer and what a strong position you are in sets you apart from the average purchaser, shows that you are well organised, a serious buyer who understands the market. I have driven some hard bargains using this method as have others who have used this technique on my recommendation.

Fire_Fox

oki1875 wrote: »

What whould you offer? Are there special form for offers?

Offer low, you can always increase your offer. I don't know the market in the area, that's for you to research. It's helpful to know what the vendor paid as he won't be keen to lose money; hopefully he will be relieved to shift the place quickly. I don't think he will end up making a profit on his 'investment' but that isn't really your problem!

Just don't be too quick to increase your offer - if it is refused tell the estate agent the offer remains on the table as it is and that you are going away to consider your position. If at all possible let them come back to you with a mutually acceptable price after a few days. Too many buyers panic and think they are going to lose the place, it's better if the vendor is panicking thinking they are going to lose a dream cash buyer. Never ever tell an estate agent you have fallen in love, instead focus on the negatives, the work that needs doing.

The following is my own template - it's probably too wordy and I am sure you could improve upon it. It's key that the vendors are in no doubt that you are in a position to buy (or to walk away and buy something else!), want to complete quickly, have researched the market, have your finances in place AND have instructed a solicitor.

Ask lots of pertinent questions - for a flat you want to know about the service charges, ground rent and any planned works that may be chargeable to leaseholders. You might also want to ask if there have been any neighbourly disputes. Yes, your solicitor will ask all this but you don't want to get a fright in three months time when you find out, say, the lift needs replacing at a cost of £10K per flat.

"Your address

The date

To whom it may concern

Re: Address of Property

Further to our viewings on [dates], we are pleased to be in a position to offer to purchase the freehold/ leasehold [delete as appropriate] on the above property for £[offer in numerical format] ([offer in words] pounds sterling). This offer is on the basis that the property is taken off the market immediately and is subject to survey and valuation.

Our offer reflects the poor condition of the internal/ external [delete as appropriate] fabric of the building, the falling property market and our strong position as prospective purchasers. Given that [address] will be vacant over the winter months/ is vacant at present [if relevant], I trust our desire for a swift completion will recommend this offer to the vendor.

Stagnant Property Market
As you are no doubt aware property prices have fallen substantially in recent months and continue to do so. [Now specify prices of properties in the street that have sold, and the large number still on the market in the vicinity].

Essential Repair Works
[address] is in a poor state of repair/ poor decorative order [delete as appropriate] and requires substantial capital input to bring it up to a habitable standard. Discussions with a local builder suggest that it will cost at least £x to replace the windows/ re-plaster/ fit a basic kitchen/ install central heating [delete as appropriate].

Position of Purchasers
We confirm that we are first-time buyers and thus in a chain-free position. Our finances are in place and we have instructed a local solicitor to act on our behalf in any property purchase. As a result we would be able to complete a sale quickly.

Should this offer be acceptable, our conveyancer’s contact details are
Name
Address

[If you have any questions relating to the condition or contents of the property ask them here]. I look forward to hearing from you at your earliest opportunity.

Yours faithfully

Your full names"

kiwi07

Fire_Fox wrote: »

Offer low, you can always increase your offer. I don't know the market in the area, that's for you to research. It's helpful to know what the vendor paid as he won't be keen to lose money; hopefully he will be relieved to shift the place quickly. I don't think he will end up making a profit on his 'investment' but that isn't really your problem!

Just don't be too quick to increase your offer - if it is refused tell the estate agent the offer remains on the table as it is and that you are going away to consider your position. If at all possible let them come back to you with a mutually acceptable price after a few days. Too many buyers panic and think they are going to lose the place, it's better if the vendor is panicking thinking they are going to lose a dream cash buyer. Never ever tell an estate agent you have fallen in love, instead focus on the negatives, the work that needs doing.

The following is my own template - it's probably too wordy and I am sure you could improve upon it. It's key that the vendors are in no doubt that you are in a position to buy (or to walk away and buy something else!), want to complete quickly, have researched the market, have your finances in place AND have instructed a solicitor.

Ask lots of pertinent questions - for a flat you want to know about the service charges, ground rent and any planned works that may be chargeable to leaseholders. You might also want to ask if there have been any neighbourly disputes. Yes, your solicitor will ask all this but you don't want to get a fright in three months time when you find out, say, the lift needs replacing at a cost of £10K per flat.

"Your address

The date

To whom it may concern

Re: Address of Property

Further to our viewings on [dates], we are pleased to be in a position to offer to purchase the freehold/ leasehold [delete as appropriate] on the above property for £[offer in numerical format] ([offer in words] pounds sterling). This offer is on the basis that the property is taken off the market immediately and is subject to survey and valuation.

Our offer reflects the poor condition of the internal/ external [delete as appropriate] fabric of the building, the falling property market and our strong position as prospective purchasers. Given that [address] will be vacant over the winter months/ is vacant at present [if relevant], I trust our desire for a swift completion will recommend this offer to the vendor.

Stagnant Property Market
As you are no doubt aware property prices have fallen substantially in recent months and continue to do so. [Now specify prices of properties in the street that have sold, and the large number still on the market in the vicinity].

Essential Repair Works
[address] is in a poor state of repair/ poor decorative order [delete as appropriate] and requires substantial capital input to bring it up to a habitable standard. Discussions with a local builder suggest that it will cost at least £x to replace the windows/ re-plaster/ fit a basic kitchen/ install central heating [delete as appropriate].

Position of Purchasers
We confirm that we are first-time buyers and thus in a chain-free position. Our finances are in place and we have instructed a local solicitor to act on our behalf in any property purchase. As a result we would be able to complete a sale quickly.

Should this offer be acceptable, our conveyancer’s contact details are
Name
Address

[If you have any questions relating to the condition or contents of the property ask them here]. I look forward to hearing from you at your earliest opportunity.

Yours faithfully

Your full names"

Thank you so much for your useful info. :TThe vendor bought this flat in December 2000 for £97.500.
So do you think I should start with £107 k? Is it not too low?

kiwi07

Francesanne wrote: »

Would have thought a reduction of £19,000 is a bit on the steep side. Don't think I'd be dropping price that much if I were the seller. Suppose it depends how desperate they are to sell. How much can you afford to offer?

The top of my budget is 120k.

Fire_Fox

oki1875 wrote: »

Thank you so much for your useful info. :TThe vendor bought this flat in December 2000 for £97.500.
So do you think I should start with £107 k? Is it not too low?

The value of two flats in the block nine years apart isn't enough research. You need more in the block, in the same street, flats in the surrounding area. Run the postcode and names of nearby streets through here, til you have a good feel for what the selling prices are locally. If it's a large block you can just do the one building.
http://www.ourproperty.co.uk/

Why are you worried about an offer being too low? First offers are almost always refused, then you up your offer. Do you know how much it will cost to replace the shower cubicle and re-tile around, do you know how much the appliances you will need are going to cost?

kiwi07

I have no idea how much it may cost. I am struggle to decide what will be my first offer.

Fire_Fox

oki1875 wrote: »

I have no idea how much it may cost. I am struggle to decide what will be my first offer.

Then you need to find out before you make an offer! Speak to a local builder about the shower, find out the prices that flats have actually sold for in the block, then come back and ask us if you are still unsure. You need to know these facts for any offer, first or otherwise, to be taken seriously. What are you going to do if you end up agreeing £120K then you find out in two months time you need to spend £8K on the shower cubicle and another £2K on appliances?

At the moment you seem to be basing your first offer purely on what you want to pay, which is only part of the equation. Find out what the flat would sell for if in good condition, then take off the amount it will cost you to make it habitable and that makes a reasonable purchase price. A first offer will be lower than that.