The art of making offers....

sinbad182

Evening all!

First time buyer here. Ive found a flat I like in London, have an agreement in principle for the mortgage, and am ready to move for it.

Its on the market for 220k, and today I put in a low offer of 195, just to test the water and see if I could get some feedback out of the vendor as to what he would accept.

The EA got back to me saying (as expected) the offer had been knocked back, and the vendor was hoping for something closer to 215 as a similar flat in the block had sold for that in 2007. Obviously, this was before the bubble burst, and in my opinion I dont think he should expect this in todays climate.

My question is therefore, what sort of secondary offer should I go in with? Immediately meet him halfway? Or nudge it up 5k at a time? Ive done a lot of homework on the buying process, but being a FTB obviously have no experience in actually negotiating the price!

Eric1

there is no art of making offers in the current market, IMHO. Just make your final offer and stick to it, even if it takes weeks.

mark5

My sister offered 108,000 on a property up for 115,000 about 3 months back and the estate agent was quite funny with her stating that the vendor would get the asking price and wasnt interested in any offers below this.

The house is still on with the same agent for 102,000 now!

myhouse_2

2007 is 2007 and prices have fallen quite a bit since then. Your offer sounds about right (if not just a little generous). Go up in small amounts. I would suggest putting in a +2k offer and put a deadline on it - i.e. this offer is available until mid August. Your seller will know it's a difficult market to sell in and may just accept.
..unless of course you are happy to over-pay, or believe there is significant interest in the house from other buyers.

jockosjungle

How long has the property been on the market? Normally takes a few months for a seller to realise they are not in a position to get the price they want

R

gnimia

myhouse wrote: »

2007 is 2007 and prices have fallen quite a bit since then. Your offer sounds about right (if not just a little generous). Go up in small amounts. I would suggest putting in a +2k offer and put a deadline on it - i.e. this offer is available until mid August. Your seller will know it's a difficult market to sell in and may just accept.
..unless of course you are happy to over-pay, or believe there is significant interest in the house from other buyers.

While broadly this is true, some parts of London have bounced back, and are exceeding 2007 prices already - OP should look on Land registry for the area he's interested and check out the change...

wessexw

I agree that London is a bit different, I've been looking for a flat in London for quite a while now in the same price range as the OP and have learned that if the property is decent and reasonably priced that it will be snapped up within a month or less. If it's not snapped up in that time then there's something wrong with it - either with the condition/location of the flat or with the price. So you can't really faff too much in London if you find a good place as somebody else will take it.

sarah_elton

Eric1 wrote: »

there is no art of making offers in the current market, IMHO. Just make your final offer and stick to it, even if it takes weeks.

Agreed - if you keep edging up they think you'll keep going.

Decide the price you're prepared to pay. Call the agent, reiterate that you're a FTB so chain free, finances in place, prepared to move quickly (if you are), serious buyer, etc. State the price you'll pay, what it includes (carpets, curtains, anything else you want) and that it's your final offer.

westv

There was a thread a little while ago done by one of the more knowledgeable people here and that showed how to get an idea of what to offer. Probably lost in the depths somewhere now though.

sinbad182

Cheers for advice guys. Think I'm going to go down the 'here's my final offer, take it or leave it' route as opposed to nudging it up 2k at a time. Will prob try and meet him halfway at 205.

I did check out the sales history in this development on mouse price. Nothing comparable has been sold since 2008, and that was probably as the Market was starting to wane a little. This place has been on the Market for a little while, I got the impression from the EA the vendor has been a little unrealistic about the price!

jozbo

wessexw wrote: »

I agree that London is a bit different, I've been looking for a flat in London for quite a while now in the same price range as the OP and have learned that if the property is decent and reasonably priced that it will be snapped up within a month or less. If it's not snapped up in that time then there's something wrong with it - either with the condition/location of the flat or with the price. So you can't really faff too much in London if you find a good place as somebody else will take it.

agreed.

i reckon your offer sounds right. i would plan your absolute max final offer and do not go over it. you may not get this place but the london market is flooded at the moment (in my own experience of househunting) and you can afford to wait to get the price you want.

if you really must have it i'd nudge up to 197.5, say this is your best and final. wait a week or two, if still no agreement then try and nip it with 199 if you're happy to pay that.

going up in 5k increments implies you started much lower than you're prepared to pay and the money will keep coming