Advice required - what offer to make?

iandv

If I was making an offer what should I go in at 15%, for example the house I am looking at was on the market for £250,000 (which is way overpriced anyway as it last sold for £185,000 in 2003 which was the last time a house sold in that street) but the house has now been reduced to £208,000.

The house that I am looking to make an offer on is now owned by a national house builder as the previous owners did a part ex with them, so I think the developer are keen to sell. Any ideas on what you would open negociations at based on the info above - also the house needs a new boiler, electrics and carpets throughout.

clutton_2

i would try £185k and see what they say.. they are unlikely to want to sell it for less than they paid

iandv

Well the vendors paid £185k for it in 2003 - but they no longer own the house it is now owned by Persimmon as the vendors did a part ex with Persimmon, so I am led to believe that Persimmon are looking to sell the house as soon as the can.

Lynsey

Go in low and negotiate up - Persimmon could well take a loss as they have made a profit on the sale. They will want rid of this part ex.
The 2003 price would be good if you can get it. Are there no offers available, like a 5% discount off??

Lynsey

iandv

Hi

No offers on the property. I was going to go in at 180k followed by £183 then 186 up to a max of 190k- or do you think that is just going to annoy the estate agent who is acting on behalf of Persimmon?

Any tips on negociating this deal and how to conduct it over the phone?

Lynsey

£208k is just the asking price, so 10% below is totally acceptable in this market. It's only worth what someone is willing to pay, not what someone may want.
Test it with £180k, you have nothing to lose - it depends what they will actually accept and how much interest there is the property. No further interest will be in your favour as this is not an auction. A good EA should guide you as they also want their commision.
Hope you reach a compromise (in your favour) - good luck.
When we have been putting in offers of late it's always been at a minimum 40% discount of the peak for the average similar property in the street (won't work in all areas obviously, but can in the NE).
What was the peak price??

Lynsey

iandv

Thanks - how should a good ea guide you - what should they say? as the more they sell a property for the more commision they get?

Not sure what the peak price was as the last house to be sold in this close was in 2003 for 185k. The house was initially on the market for £250k before being reduced to £208 so 40% off 250k would be £150k - there is no way that it would go for that.

I suppose as its a quiet time of year and as we have the mortage in principle we are in a strong position but can only stretch to a maximum of 190k hence the reason why I was going to start at £180k

Do you think that 180k is too cheeky? I have already informed the agent that the house needs new electrics, boiler, plumbing etc and they said they would take this into consideration with the offer and all offers would be passed to Persimmon.

Lynsey

iandv wrote: »

Thanks - how should a good ea guide you - what should they say? as the more they sell a property for the more commision they get?

Obviously the more the house sells they more they (EA) would get in commission (unless they are on a fixed price for selling), but they would only get the commission on an actual sale - believe me, they want sales in the current climate.

40% off the peak doesn't work in all areas, but does in some (some are actually going for 50% off - repossessions etc.) - it depends on the area.

If you are happy with £180k as an entry/opening offer, then go for it. This is where the EA should guide you (a good one anyway) and suggest a price which may be accepted. For a property on the market at £208k, it would be expected to sell at under £200k (not all areas), so your top price of £190k would not be too far away in my opinion. Hopefully you will get it cheaper as you have pointed out the work needed to be done. You could get Persimmon to get the work completed and up your offer to reflect this, if you can afford it of course.

Never be frightened to put in a low offer - it may be rejected and you can increase gradually to find a compromise. You may also be pleasantly surprised.

Good luck, hope you get what you want.

Lynsey

iandv

Any advice on how to deliver the negociations - should I just say I would like to offer 180k or add because it needs a new boiler and electrics. Anything else I should say?

Lynsey

iandv wrote: »

Any advice on how to deliver the negociations - should I just say I would like to offer 180k or add because it needs a new boiler and electrics. Anything else I should say?

Exactly, just tell them that you would like to put forward an offer of £180k taking into consideration the amount of work needed as you have described.
I would then let them do the chasing if they initially decline, but it's your call. The more eager you are, perhaps the more they will test you. It all depends on the interest if any and how much you really want THAT property.
We are flexible as we are looking at BTL's and again believe me we get chased day after day once we have shown an interest in a property. We just give eventually a final offer if it's a suitable property and take it from there. If it's rejected we move on to another property - there is a lot of choice at the moment.
It depends how much they want rid of the property, they will not be desparate as say a forced sale (where mega bargains can be had in certain areas).

Lynsey

iandv

Hi Lynsey

Just an update - as it would be a part ex with Persimmon they have offered my £99k (today) for ours a 3 bed semi (which is a joke) it is currently on the market for £117k (reduced from £122k) .For example the most recent house in our estate was a 2 bed terrace home and it sold in Jan 2010 for £108,500! ours is a 3 bed semi.

If they offered £110k for ours that would be a fair price as it is a part ex and the lowest that we could go down to.

On the property we were looking at with them they reduced it from £208,000 to £200,000 just a 3.5% reduction where as they have offered us 15% less than what the house is on the market for

So I have declined their offer. Any ideas on the next move I should make as part of the negociations? As I thought they would offer a silly numbers first to test the water