Renewed interest in an old offer

LisaOnline

I am a first time buyer and have been through a few ups and downs as I try to get onto the property ladder.

A deal fell through on a house previously as my surveyor valued the property £10,000 less than my offer (quite a shock). I tried to renegoitate as I did not want to pay over the odds. In the end I had to walk away as the seller would not budge.

About a month ago, I made an offer on another house - £7,000 below the asking price. The seller did not accept and the estate agent tried to persuade me to increase my offer by £2,000. I held firm but left my offer open.

I spoke to the agent about two weeks ago and I got the impression the seller was prepared to wait for a higher offer. I moved on and started looking for other properties. The market has been pretty stagnet with very few houses in my price range being brought onto the market.

Out of the blue, the agent phoned me yesterday to ask if my offer was still open. He thinks the seller may be more amenable to a lower offer. I have mixed feelings about this turn of events.

On the one hand its potentially good news - the house meets most of my criteria with the only compromise being a slightly longer commute than I had originally planned.

But, in the back of my mind (and with the recent press), I am worried that my original offer is now on the high side in the reported falling market. Should I consider lowering my offer or is this likely to jeopardise the sale? I am hesitant due to what happened last time but really want to make sure I get a fair deal on my first property purchase. I am feeling a bit out of my depth.

I have had mixed opinion from friends and family and would appreciate an impartial view.

Thank you in anticipation.

DVardysShadow

LisaOnline wrote: »

But, in the back of my mind (and with the recent press), I am worried that my original offer is now on the high side in the reported falling market. Should I consider lowering my offer or is this likely to jeopardise the sale? I am hesitant due to what happened last time but really want to make sure I get a fair deal on my first property purchase. I am feeling a bit out of my depth.

The essence of what you are saying is that if your offer is rejected it was a fair offer, but any offer which is accepted is too high. That is a road you don't want to go down.

Do you have a good deposit to put down 15% to 20%? Or are you happy to wait and see how this current property value fall plays out?

olly300

LisaOnline wrote: »

I have had mixed opinion from friends and family and would appreciate an impartial view.

If you can live in the house for the next 8-10 years then drop your offer price by the full £10,000 the surveyor said. I would start by saying that I want to offer £15,000 less.

You need to remember you are likely to move job in that time more than once so if there are no industrial estates/towns in other directions easy to get to get then don't go for the house. In addition you may have a family in that time so if children can't fit into the house don't buy it.

brit1234

LisaOnline wrote: »

Out of the blue, the agent phoned me yesterday to ask if my offer was still open. He thinks the seller may be more amenable to a lower offer. I have mixed feelings about this turn of events.

On the one hand its potentially good news - the house meets most of my criteria with the only compromise being a slightly longer commute than I had originally planned.

But, in the back of my mind (and with the recent press), I am worried that my original offer is now on the high side in the reported falling market. Should I consider lowering my offer or is this likely to jeopardise the sale? I am hesitant due to what happened last time but really want to make sure I get a fair deal on my first property purchase. I am feeling a bit out of my depth.

Something suggests the seller saw the Halifax giant record drop in prices, biggest ever.

What you have to ask yourself is are prices going to continue falling, stabilise or rise.

From my point of view the economic conditions only mean prices are going to continue falling. I am personally waiting for bigger drops.

LisaOnline

I have 30% deposit so like to think I am in a good position - probably the best I will ever be in.

My inexperience is making me doubt my judgement. I am going to see the property again tomorrow and this may help me make up my mind?

DVardysShadow

LisaOnline wrote: »

I have 30% deposit so like to think I am in a good position - probably the best I will ever be in.

My inexperience is making me doubt my judgement. I am going to see the property again tomorrow and this may help me make up my mind?

Yes, you are in a good position with 30% although I think you could see your equity eroded.

Seeing the property again tomorrow may not help you much. Your problem is basically related to macroeconomics, so another viewing of the property will only make your indecision worse.

I would suggest you call off the viewing tomorrow and spend the weekend thinking about whether you are prepared to invest your 30% now knowing that a 15% fall will halve your equity and a 15% rise will add 50%. Think about how long you want to live in the property and how much it is worth to you to buy rather than carry on with your current living arrangements whatever they are. Only after that consider doing another viewing.

MobileSaver

LisaOnline wrote: »

The market has been pretty stagnet with very few houses in my price range being brought onto the market.

the house meets most of my criteria with the only compromise being a slightly longer commute than I had originally planned.

There's definitely a risk you will jeopardise the sale but no-one here knows what your seller's "walk-away" price is. He may now be desperate, accept a lower offer and you've saved a few quid. Alternatively he may already be a reluctant seller and simply tell you where to go if you try to renegotiate again.

Firstly you need to decide whether you are looking for a home or an investment, many of the HousePriceCrash-doomsayers like brit1234 don't seem able to understand that most people are buying a home that will improve their quality of life for typically the next 5+ yrs.

As you are already finding, as prices go down less vendors are putting their property on the market, anecdotally I'd say that in particular the nicer ones are definitely being taken off the market as sellers simply decide they'll ride it out as they don't need to sell.

One mistake I've made myself in the past is to keep looking for the "perfect" house, no house is perfect, there is always something you would change regardless of your budget. Only you can decide whether the commute length is the one compromise you are prepared to make but don't kid yourself that another house may tick every single box, it never will!

brit1234 wrote: »

I am personally waiting for bigger drops.

A flaw in brit1234's approach is that you will never know whether you've bought at the bottom of the market until it is too late and so you keep holding off thinking that prices might be lower next month. It should be pointed out that brit1234 has been following this approach for years and in 2008 infamously predicted 50% falls.

If you are happy to keep renting or whatever you are doing now for another couple of years then maybe brit1234's approach will work for you.

LisaOnline

Thanks for advice. I am quite keen to move as I am running out of space in my current flat. I think this will be a long term investment so I should stop worrying about getting the best deal - who knows where the market will be in 5 years time.

I have rearranged my viewing until next week and have made appointments to see another couple of houses. I hope this will help me get some perspective.

brit1234

MobileSaver wrote: »

Firstly you need to decide whether you are looking for a home or an investment, many of the HousePriceCrash-doomsayers like brit1234 don't seem able to understand that most people are buying a home that will improve their quality of life for typically the next 5+ yrs.

Mobile I am not a member of house price crash. I also understand saving a few years for a deposit to have it erroded to nothing for the sake of 6 months to a year is foolish.

MobileSaver wrote: »

A flaw in brit1234's approach is that you will ever know whether you've bought at the bottom of the market until it is too late and so you keep holding off thinking that prices might be lower next month. It should be pointed out that brit1234 has been following this approach for years and in 2008 infamously predicted 50% falls.

I'm not looking to buy at the bottom just when prices become affordable. AS for 2008, no one could of predicted the massive stimulas and slashing of interest rates to delay the crash. What we know are prices are crashing again and there is nothing left to stop it.