House Buying - Moneysaving Tips

silentotter

I am considering buying a house that is on the market for £339,950 by cash so a mortgage isn't required, as it will be a cash offer is 90% of the asking price a reasonable offer to make and expect to be accepted thus making the offer £305,995? The property has been on the market for quite a while and has even had its price dropped by £10,000 pounds so far.

When I sold my property in 2008 the buyer who initially offered the full asking price and then once I had accepted came back a week or two later and demanded a £15,000 reduction on the price or he would walk away? Is this a tactic that a lot of buyers are now using since property prices crashed and the downturn took hold?

Silentotter

jonny_power

silentotter wrote: »

I am considering buying a house that is on the market for £339,950 by cash so a mortgage isn't required, as it will be a cash offer is 90% of the asking price a reasonable offer to make and expect to be accepted thus making the offer £305,995? The property has been on the market for quite a while and has even had its price dropped by £10,000 pounds so far.

When I sold my property in 2008 the buyer who initially offered the full asking price and then once I had accepted came back a week or two later and demanded a £15,000 reduction on the price or he would walk away? Is this a tactic that a lot of buyers are now using since property prices crashed and the downturn took hold?

Silentotter

I'd go in lower than that. A cash buyer may be preferable but only slightly. Most buyers have a AIP and after that it doesn't take long to get a Mortgage Offer.

They can only say no to your offer, it might be worth highlighting that you're ready to go ASAP and have solicitors and the money sorted.

jp1982

hi,

I am just seeking the opinion of others regarding an opening offer on a property that we have found. The house is on for 137000 and has been on the market for quite some time (not sure how long but it is now on with the 3rd agent). I know many variables exist (e.g. our max spend, current price in the area, etc..) but I do not want to offend the seller in anyway with my first offer, which could affect further negotiations. The seller did disclose that the reason for the sale is a relationship split and that he intends to move back to his parents once a sale is achieved so is eager for the sale to take place. is there a percentage rule of thumb that any one can recommend? I was thinking of starting at 126000 with a view of paying 130000? Any thoughts/advise would be welcomed!

J

Jemster01

Hi JP1982,

We had an offer accepted today! It was on for £135,000. We offered £118, then £123 and then the vendor came back and said they'd accept £125- which is the price we had in our heads all along. Property had been on for a year, and needed some work doing (new kitchen, few new windows, cosmetic decorating) and we are FTB so no chain. Like you said you need to know all the local variables, your position and that of the vendors but my advice is go in low even if feels really uncomfortable- we're not used to haggling as a society. And make sure you property bee it! Good luck!

johnwarner75

I used to be an estate agent, and you want to deal with Serious Buyers, one who have finances in place, know what properties have sold for recently, and dont ask stupid questions.

Antispam

:spam: post 380

Grogle

Hi all, have an offer accepted at the minute, on a place and have had the full survey done. This has recommended a damp survey and given a valuation of the property which is under the agreed price at present.
Would you a) get the damp survey done then negotiate
start negotiating now, and not bother with a damp survey
C) start negotiating now and ge the survey done in due course?

Also when renegotiating would you go back via the solicitor or sellers estate agent?
Advice appreciated, thanks.

Grogle

Oh sorry I forgot to mention that the valuation done by the mortgage co was good enough for them to offer us the money at the current agreed price, yet our own full survey was the one that has a lower valuation. Do we need to declare this to the mortgage company at all or is this info ours to do with as we please?

Ruda

AndrewSmith wrote: »

Thanks Doozergirl, must learn to keep my mouth shut sometimes, a point that I am sure Martin himself will gladly welcome

So, how to sucessfully negotiate with an agent or seller on the property you want, and how to get it for the price (or as near to it) that you want.

Selling or buying a house is ranked amongst one of the most stressful things that one will do throughout their lives. Think about it, you are talking about something that will be where your family memories and possibly members will be born and will bear special meaning to different people. Needless to say it is an immotive time at best.

I do not have all the answers, no-one does as it will vary from property to property, and person to person.

What I can offer however are some tips that I have picked up and still use from the 8 years I spent sat as a broker in an estate agency office.

1) Know Your Budget
Sounds obvious but there are buyers out there today who have no idea how much it is likely to cost them to buy a home, or what they can afford. Work out what you have coming in, and what you can afford to spend each month including all the household bills.

2) Know What You Can Borrow And It's Cost
This goes hand in hand with the above. If you aim at nothing, you will hit nothing. Visit or speak to a broker to establish what you are able to borrow, how it works, what's involved and how the costs will fit in with your monthly spending budget. This is the point at which you will know whether your plans are, in fact, do-able.

3) Get The Funding In Place
If taking a mortgage, get an agreement in principle or mortgage promise from the broker. This will be invaluable when you come to actually begin bidding on a property as you will be taken far more seriously by the agent and seller if your finances have already been agreed. Never forget though that an agreement in principle is only as good as the information you provide to obtain it. Be honest from the start and it will prove worthwhile. Make sure that you have the necessary funds inplace for the deposit, mortgage fees (survey etc) and, as I will move on to, the Legal fees.

4) Get 3 solicitors quotes and decide which one you will use in preparation
Get at least 3 solicitors quotes based on the figures and budget worked out with your broker. I always suggest 1 Local firm, 1 Distant firm, 1 online form. See how they compare but remember that cheap is not best. Paying a little more could make the difference between a swift trouble free transaction, or having a solicitor who leaves your case till 'tomorrow'. If yu have the solicitor firm in mind, it will benefit you again when bidding.

5) Make Yourself Known To The Agents
Call the agents on a regular basis. On the desk of every decent sales negotiator there will be a small index card box called his 'hot box'. This is a list of people, usually first time buyers who are looking for property and are ready to proceed. Your aim is to be at the front of his 'hot box'. This requires a certain amount of persistance on the part of you and your broker. Call the agents at least once if not twice a week. Ask if there are any new properties on their books, have any sales fallen through. Get your broker to call and tell the agents that you rmortgage has been approved (in principle) and you are now keenly looking to move ASAP. Don't however let your broker tell the agents how much you can afford. Keep the pressure on the agent to find you somewhere, once they know you are serious you will be the first one to get a call when they have a new instruction.

6) Finding The Property
Once you have found the property you like, never seem over eager to the agent initially. View it more than once at different times of the day. What seems like a quiet suburban street at mid-day can become a rush hour ratrun at 4.30. The first time you view will be with your heart, the second time will be with your wallet. On the second viewing make sure it is in the evening after the agent has closed. This will allow you to be unhurried and have the current owner on hand to get honest answers to the inevitable questions you will have. The remainder of this bit is, Im afraid, down to you as you are the only one who knows what you are looking for.

7) Pre Offer Information
Before considering what to offer you need to find out as much about the situation of the seller as possible. Find out if they have found a property. Is the chain above you complete and how long is it. How stable is the chain and how well established is it. Are there any other viewings booked or other offers on the table? Do you think there is any wor needing doing to it? Armed with this information you will then be able to present yur offer in the best possible light to the agent and seller. After all the name of the game is giving the seller what he wants, and that is allowing him to move upwards. It is not always about finances alone.

8) Submitting The Offer
There are many different schools of thought as to how much you should offer on a property. Never forget that the seller will have a level he needs to achieve to make his move possible, and that he will not have seen blistering increases in the value of his own property, which will reduce the available room for manouver.

This is where i personally take over for the buyer and begin submitting offers to the agent on their behalf. The offer must be presented confidently and with supporting information. Example:
" Mr & Mrs x have decided that the property 'x' is the one they wish to purchase. They have their funds in place with the mortgage agreed in principle, and are in a position to instruct a solicitor immediately upon the offer being accepted. They are in an excellent position and can close the chain above and get it moving swiftly. Bearing that in mind they wish to offer 'x' subject to the following conditions.
All future and current viewings are cancelled
The property is withdrawn from the open market immediately and they have exclusivity over it
The sold board goes up within 48 hours
They receive weekly updates on the progress of the chain.

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.

9) Know Your Limit
Always keep in mind the amount you are prepared to pay for the property. Increase your offers by small increments say £500-£1000 on a value as above. The worst they will say is no. This is the point where it is actually better to ask your broker to bid for you as they agent is then less likely to try to play any 'games' to increase the price. If you are offering yourself it is better to go into the agency office and place the offer in person. You are then more likely to actually witness the offer being put forward to the seller and there will be less likelyhood for mis-trust. It also helps build rapport with the agent.



If you are seen by the agent as serious, they will take you seriously. If you overcome the potential problems such as cost, mortgage etc before you even look, again you will be seen as serious about buying.

Build a relationship with the agent who is selling the property you wish to buy. You want your name to be at the forefront of his mind when he is on his way to value a property suitable. This way you may even get to view it before it goes to the open market.

Once the offer is accepted it is then down to you to fulfill your side of the deal. Instruct the solicitor without delay and get your broker to submit the full mortgage application without delay.

A good broker / solicitor will hold your hand until the day you move in.

This is not a definitive guide and I will add to it when i think of more ideas. However the basic model is something that I have used with all my clients and has, until now, proved very successful.

Hope this helps and apologies for the length of the post

Andy

that is great...
many thanx

dippywelshbird

Hi all,

Newbie here! in need of some advice. I've read all that is about on the website and just wanted to gauge a reaction from forum users.

I've recently accepted an offer on our own house. Before placing an offer on the property that we want I got info on how the sale is going. They have only had one other viewing since ours (a month ago), not other interest. The house has been on for nearly 4 months.

So I put in an offer below asking - which was an initial offer to start negotiations. A very good initial offer. EA came back shortly after saying too low. Asked if I wanted to increase, I asked if seller wanted to decrease. Apparently can't accept below asking - which we're not willing to pay. Left there. Call back from EA a few hours later - the people that viewed only last night have apparently put in an offer. It is higher than ours but not asking price. asked me if I wanted to increase. I said that we can't pay asking price and therefore I was not going to make another offer. EA then changed mind and started to say they could take less than asking, but that the other offer was higher than ours, so if we wanted to increase ours we should hurry. Left that there.

We are willing to increase our offer, but my worry is that I don't want to be bullied into paying more than we have to. We do really like the property and have a max that we can pay for it. I don't know whether the EA is playing a game with this coincidental 'other offer'. Is it worth risking losing the house? How long is it ok to sit on and wait before increasing? Then I was thinking we'd go in with best and final next and then walk away if it is not accepted. Is this wise?

Any advice/pearls of wisdom/experiences would be greatly appreciated.

Thanks