First time buyer....need your suggestions please.

edward_scissorhands

Hi,

We (my wife & I) are first time buyers. We have seen this house on 2 occasions & we like it. The asking price was £269,950. We initially placed an offer of 243,000 (10% below the asking price) 2 weeks back, which was rejected. Our second & final offer was 250,000 (7% below) a week back. It was also rejected. The EA mentioned to us that the seller is expecting 260,000 minimum last week. The EA rang us couple of days back and said that the seller would come down to 258,000 for us and that there are other buyers who are interested in the house too. We are aware of the 0% stamp duty for ftb below 250,000 and the sudden jump to 3% over 250,000 which would amount to £8000 (that would amount to paying 16000 over the 250,000 which we cannot pay.

We have a good deposit (25%) and have a mortgage letter in principle. Plus we are ftb’s and would like to move immediately.

We like this house but don’t want to pay 16,000 over our budget.

Any suggestions from you all will be really appreciated.

E Scissorhands.

Eric1

edward_scissorhands wrote: »

The EA rang us couple of days back and said that the seller would come down to 258,000 for us and that there are other buyers who are interested in the house too.

:rotfl:
Of course there are other buyers, or maybe even offers, but do they have a 25% deposit?

You already know what to do. Decide what it's worth to you and stick to your maximum offer.

hazyjo

Stand your ground. Put the offer on the table and walk away. Tell them to call you if they change their minds, but in the meantime you have other properties to view. No house up for £260k-anything is going to sell for more than £250k in this month in this market (well, it might, but the buyer would have to be barking mad). Yes, in a great market, they might sell for that, and it might actually have be 'worth' more than £250k if it wasn't for the stamp duty, but unfortunately that's the way the market is. We were on for £265k (thought we could get it) but, despite a very active market here, we had to drop to £250k. Had an offer at £248k which fell through, and after 3 weeks on with another agent accepted £230k from an investor. I bet my bottom dollar it's been priced to sell at £250k.

What the seller expects and what someone will pay can be poles apart. Unfortunately for the seller, it's not them who really gets to choose what their house is worth, it's what someone will pay for it that establishes its value. Let them hang on... if they can't sell, they'll have to drop to £250k and then will risk having to take offers below that.

Definitely don't budge or enter into any other discussions about money/paying extra for fixtures and fittings, etc. £250k, offer on the table - subject to survey, take it or leave it.

Jx

Catatonia

I agree with Hazy. Perhaps tell them that your £250k offer is final and will be left on the table for a week/ 2 weeks only?

edward_scissorhands

Hi again,

Thank you for all your replies.

Received a call from the EA today afternoon (who by the way have been helpful with our house search). The seller has agreed to lower the price to 255,000. Since we are FTB’s, he has said that we pay 250,000 for the house and 5,000 for the disposable items (to avoid the stamp duty). When I enquired what these disposable items were….they said it would be the curtains (plus the heat resistant blinds for the conservatory…which was apparently worth £4,000 at the time of purchase a few yrs ago), carpets & lightings.

I am not clear whether these items would be categorised as disposable items, probably the curtains & blinds would, but not the carpets and lightings. He has said that the solicitor would be fine with it and it is not illegal. We don’t want to do anything illegal knowingly or unknowingly that would be categorised as tax evasion or avoidance.

We haven’t given our answer as yet…and have said to them that we do need time to think about it.

Kindly do help us with your advise.

Many thanks in advance.

E Scissorhands.

casperlarue

edward_scissorhands wrote: »

Hi again,

Thank you for all your replies.

Received a call from the EA today afternoon..... quelle surprise!

The seller has agreed to lower the price to 255,000..... so those other interested buyers have vanished then?!

Since we are FTB’s, he has said that we pay 250,000 for the house and 5,000 for the disposable items (to avoid the stamp duty). When I enquired what these disposable items were….they said it would be the curtains (plus the heat resistant blinds for the conservatory…which was apparently worth £4,000 at the time of purchase a few yrs ago), carpets & lightings. So not worth £4k now are they.

I am not clear whether these items would be categorised as disposable items, probably the curtains & blinds would, but not the carpets and lightings. He has said that the solicitor would be fine with it and it is not illegal. We don’t want to do anything illegal knowingly or unknowingly that would be categorised as tax evasion or avoidance.

We haven’t given our answer as yet…and have said to them that we do need time to think about it.

Kindly do help us with your advise.

Many thanks in advance.

E Scissorhands.

Tell them your are considering other properties that are available. If you want to pay £250k for the property then say thats your offer and leave it at that.

pardal51

unless this is a very desirable (if it was it'd have gone by now) property than stick to 'your' price. Don't be afraid to lose this purchase (unless you loved and loved this property).

basically this price bracket is quite tricky and they won't be able to sell it over £250K mark. The EA will push hard to make you pay £250K because they know this is the max. I am also a FTB with a reasonable deposit and we are in a good/strong position. We can 'lead' the negotiations, not them. Make sure that they know you have a mortgage approved, can proceed quickly, are committed, etc. But be prepared to lose. If you have this in mind you can try and negotiate a good price.

TBH, I think if you go for £250K you are overpaying because this is the max. they can get in the current economic climate. If they need to sell and are committed to it you can negotiate a good price because you are in a strong position.

This is my personal opinion anyway. Hope this helps.

Hailstorm

£250K is a stamp duty threshold so even non FTBs who might be interested would try hard to push them down to this. It is very unlikely they will get more.

Be wary about deals where you pay £250k for the house and more for other items. The taxman is aware of these attempts at avoiding stamp duty. If they decide to investigate your sale they will consider what they think the other items would be worth on the second hand market.

For example, if they conclude the other items are only worth £2k and not £5k they will treat the sale as £253k for the house and £2k for the additional items and you will still be liable for stamp duty.

jcbl

Stick to your guns! We went in at 250 on a 275 asking and the EA wanted to try 'well what if you paid 270 and they paid £5k of the stamp duty', and all the rest. 3 weeks later, our offer was accepted; we complete on Tuesday.

Fact is, very very few FTBs have the cash to play above £250k, and those that do will move to the £300k bracket as once paying SD the cash requirement is a relatively small further percentage. If the vendor was swimming in offers you wouldn't be having this dialogue with the EA.

Hope this helps.

hazyjo

hazyjo wrote: »

Definitely don't budge or enter into any other discussions about money/paying extra for fixtures and fittings, etc. £250k, offer on the table - subject to survey, take it or leave it.

Jx

edward_scissorhands wrote: »

The seller has agreed to lower the price to 255,000. Since we are FTB’s, he has said that we pay 250,000 for the house and 5,000 for the disposable items (to avoid the stamp duty). When I enquired what these disposable items were….they said it would be the curtains (plus the heat resistant blinds for the conservatory…which was apparently worth £4,000 at the time of purchase a few yrs ago), carpets & lightings.

See above. I answered your question before you asked it It's a common ploy. Don't fall for it. No, don't pay £5k for things that aren't worth it. Plus Mr Tax Man ain't stoopid. My EA said we might get away with a couple of thousand for things, but not more. And we had to take way under the £250k mark for a sale anyway in the end. Don't budge. You might need to renegotiate following a survey anyway. £250k on the table. Don't allow yourselves to be chipped away at until you cave in thinking it's as good a deal as you'll get or that £5k ain't much in the scale of things. They won't better £250k in this market (and are fully aware of that fact) and should count themselves lucky to have found FTBs. The EA is just trying to squeeze every last drop out of you.

Jx

talla4a

I suggest you decide on the maximum price you are prepared to pay for the house then have your solicitor make a formal legal offer with a condition saying offer is valid for 3 days only.

If yours is the only offer, it will force the seller to make a decision without any further shilly-shallying.

As they say ' a bird in the hand.....'

Good luck!