Making an Offer Strategy

Matty0682

Hi All,

My wife and I have seen a house that we really like and want to make an offer. We are first-time-buyers

Obviously we would like to get the house for as little as possible and are willing to go close to asking price because it ticks all the boxes. Based on all the factors we believe asking price is 5-7% over valued. The house came on the market 3 weeks ago.

Is it a fair strategy to get a friend to pose as a cash buyer and view the property? Then ask the friend to put in a low offer (-15%) to test the waters, and when rejected, get feedback from the agents regarding the sellers expectations.

I am thinking about doing this to save us putting in a snow-ball offer, as we do not want to lose creditability.

Pros
Lowers sellers asking price expectations
We do not lose creditability
Hopefully receive feedback from agents regarding sellers price expectations

Cons
Takes time (another week to arrange), whilst we could be making in official offer.
By receiving an offer, albeit low, the seller may feel the house is getting sufficient interest to hold out for higher offers

All comments appreciated
Thanks

Fire_Fox

Have you read Chickmug's excellent thread on what to offer and how?

Matty0682

Fire_Fox wrote: »

Have you read Chickmug's excellent thread on what to offer and how?

Thanks

No not yet, do you have the link?

I will try searching for it

Matty0682

Matty0682 wrote: »

Thanks

No not yet, do you have the link?

I will try searching for it

I have read this post now. I am aware of everything discussed in it

My question above is whether the strategy above should ever be used.

The house we are looking at rural and unique. There have been no sales in the area for 10 years, so it is difficult to price based on alternatives and sold prices.

This is why we would like to test the water as it is diffiicult to value



thanks

PJackson_2

I think this is fairly risky tbh. Said friend would have to give over address details and the like as most agents (maybe all?) have to put offers in writing to both the seller and the prospective buyer. Having said that, it could be that they only write if the offer is accepted?? Someone may be able to clarify.

I personally would not do this. I'm not whollier than though by any means but I think it is wrong to con someone into thinking they have an interested party when they don't. There is nothing wrong with a friend ringing to test the waters with a propery i.e. to ensure an agent is marketing your property for sale or something like that, but to actually view someone's house and put them through the stress and anxiety of making an offer which in fact isn't legit is awful imo.

I hope you do manage to get the property you want but using this kind of tactic can be dangerous.

benood

Personally I think this is a bridge too far, you're really joining the EA in the gutter!

Also might the EA get wise to the fact something was up if a new buyer arrives on their books only looks at one house, makes an offer then disappears?

In any case what's to stop you making the low initial offer?

DVardysShadow

Another downside is, if the friend's offer is rejected, it will prime the agent to think there might be more interest at a certain price point which could work to your disadvantage.

Matty0682

benood wrote: »

Personally I think this is a bridge too far, you're really joining the EA in the gutter!

Also might the EA get wise to the fact something was up if a new buyer arrives on their books only looks at one house, makes an offer then disappears?

In any case what's to stop you making the low initial offer?

Thank you for yr response. But whoa, me joining the EA gutter? I haven't done this, I was merely putting this strategy for everyone’s thoughts as making an offer is new to me. It is interesting to hearing the effects from both sides.

Your right, nothing stopping me from putting it low initial offer

Matty0682

PJackson wrote: »

to actually view someone's house and put them through the stress and anxiety of making an offer which in fact isn't legit is awful imo.

I hope you do manage to get the property you want but using this kind of tactic can be dangerous.

Yes I agree with you. I guess being obsessed with getting the lowest price I have forgotten about the ethics here (shoe on other foot etc). I won’t go ahead with this strategy.

I am grateful I can post on here expressing an idea and getting input from all sides before committing

PJackson_2

No worries Matty. The thing is, I always say you have to think how you'd feel if that happened to you and you were the one selling. Like I said, I'm not holier than (think I put a W on the first time lol) but it's not a nice stunt to pull imo. I don't normally stick my neck out on posts on boards but this did make me wince!!

I do think you need to start off low and work up to where you can realistically afford and would be willing to pay for property.

PS - My Mum is trying to buy right now and finding people are barely budging on their asking prices! EAs are telling her it's down to two things a) their properties are v realistically priced (in some cases less than the seller thinks it's worth!) and b) high demand and low number of properties means those that are decent are getting offers straight away (i.e. the day they go on sale) and as a result sellers are thinking they can 'get more money' - I say all this as you state said property has only been on the market 3 weeks - a lot of people take the mentality that 'it's only been on the market x days/weeks, we don't want to take the first offer' etc - infuriating really as why have they got it up for sale then - someone has to be the first offerer!!! :rolleyes:

Matty0682

Thanks again PJackson
I really would like to start low. House is on market for 200k, so I like to start 175k because of the stamp duty. But say if I started at £175k, do you i think we’ll lose credibility if we continue rising to £195k?
I have been looking in the market since May, and you are right about the lack of supply holding up prices. People do not want to sell at the bottom, and those who did have their house up for sale last year have simply taken it off the market, rather than lower to a realistic price
The fact it’s not been on the market long counts against us as you have mentioned. But I bet the are no FTB’ers looking at it (all will be in chains, except cash buyers of course)
I wish we had the conviction to hold out for a while, but we don’t