Help, is the EA telling the truth?

Doozergirl

First things first, an Estate Agent works for themsleves and their commission, not for the vendor.

If he is lying about another offer, he's probably only trying to lead you in the direction of what he knows that vendor will accept and has accepted previously. If you consider that the sale is worth £1200 to the EA but each £1000 is only worth £10, then any sale is worth more than holding out for another £20-30. That would barely cover the cost of another week in the newspaper for them.

The idea of starting low is that you will get rejected, but it intimidates the vendor into accepting a lower offer. It does work, especially if you play hard at it, increasing each offer by tiny increments over a period of days, you will generally erode the bottom price a vendor will accept. Maybe by only £1-2000, maybe more, but it works more often than not.

willis

forgot to say- if you offer 118, if possible back it up with a reason why it will be your final offer eg: you need the extra money in your budget to replace the kitchen/bathroom etc or simply say that you've been investigating sold prices in the area and 118 is the maximum you're prepared to pay, take it or leave it.

Christal_2

Thanks for all the advice guys.

Well I think I will go for something below 119K, maybe 117 or 118K, just need to find a reason to back up the offer, and possibly, I guess, I will go up to 119K.......cause the place has furniture and everything else (even cultery!!) which makes it whole lot easier for BTL, as I have done the calculation and those things are worth some where around £1000.

I will definately ask for a second viewing first, in bright daylight, just to make sure there is no hidden "treasure" which has been missed first time.....

Angela_D_3

Christal wrote:

Thanks for all the advice guys.

Well I think I will go for something below 119K, maybe 117 or 118K, just need to find a reason to back up the offer, and possibly, I guess, I will go up to 119K.......cause the place has furniture and everything else (even cultery!!) which makes it whole lot easier for BTL, as I have done the calculation and those things are worth some where around £1000.

I will definately ask for a second viewing first, in bright daylight, just to make sure there is no hidden "treasure" which has been missed first time.....

You didn't say it was for a BTL, in which case have you, checked what the flat will rent for and are other flats letting quickly ?

angel1976

Hi Christal,

My husband and I just had an offer accepted on a house we loved. Basically, we decided on the maximum price we think the property is worth and the real estate agents told us all sorts to get us to raise the price (from the normal 'we have received an offer close to asking price', 'the vendor is going to see her financial planner' to the downright aggressive 'why won't you raise the offer?'). We stuck to our guns and in the end, we got the house for £3K more than our maximum (still £12K below the asking price) but it included all the fittings and fixtures bar two lights as we decided it wasn't worth losing the house for £3K. So I would say decide on the maximum you will pay and stick to your guns. But definitely organise a second viewing and bring in a third party (my father-in-law came to our second viewing, which incidentally the EA wanted to cancel because of that first offer!) so you are not just thinking with your heart. Good luck!

Rgds, Angeline

Doozergirl

Ooh Christal you didn't tell us it was a BTL. Different ball game altogether.

There should be a very definate line on the price you are prepared to pay if you're doing your maths correctly. You should be basing your purchase on the % yield you want to achieve not, not relying on capital appreciation for the single means of profit and not basing purchase price on how much you can afford to borrow or really on it's market value.

It's very hard to find anything of market value that will perform better than a a bank account, even if you're paying in hard cash. Not the time for BTL at all, IMO.

noyk

Offer, 112 (it'll be declined) then offer 113 a day or two later and so on for a while until you reach about 116. You should not pay significantly more than others have paid for similar places - otherwise it's likely when you come to sell you may not get your money back.

Guy_Montag

Check what people in similar places are paying in rent. Don't assume that advertised rents are what people actually pay in rent. Are houses of this type easy to rent? Who do you plan to rent to? Have you done your research?

Remember traditionally you're looking for an 8-10% yield.

Good luck, but I can't help feeling you're going to be another bankruptcy statistic in the next couple of years.

Christal_2

Wow, didn't expect to see so many more replys after I mentioned the 3
magical letter.........It's always nice to see people are willing to give opinions though..

Well, yes I have done the math, no it's not gonna achieve 8%-10% yield, the yield will be about 5% cause before I get a tenant in I can't see how much exactly the rent is thus the "about" word in the figure.

I have been renting for 2 years myself previously, according the rental market that time the property should achieve something around £525-550, have looked around the agencies website and paper for the last 3-4 months and believe the property can still achieve the similar rent if not more.

I know best ISA account do offer interest for more than 5%, but put money in the bank is just not my favorite thing. BTW I will be going for capital repayment on the mortgage rather than interest only, cause I do belive the golden time for property market has gone, and won't come back soon. But if I'm paying into the capital and someone else is paying the interest, after a good 5,6 or 7 years I'm sure the value will go up, and if I sell then hopefully it will be better than the interest from the bank for the capital I have now. If not then it's a good lesson to learn.

You can say I'm stubbon, but I'm one of those who believe the property value will always go up in long run.......

Angela_D_3

It will always go up in the long term but what if you need to get your hands on the capital and the market isn't favourable ? For 10% i'd say it was worth the risk, for 5% i'd be sticking to an ISA.