FTB how much to offer?

Gizmo777

Dear all

I have been lurking on the boards for over two years now, I'm looking for some advice please, any help would be much appreciated.

My partner and I are FTB's in the South East, we have been approved by the underwriters for a mortgage with Clydesdale. Our budget is £250K, we cannot go higher than this due to the stamp duty.

We have viewed a house today that felt right. It is on at £279,950.00, on the market since mid October 2010 (Property Bee), no offers showing etc. The vendor is elderly, he has gone into a home and the sale is being dealt with by his two sons. The house is vacant. It hasn't been sold since 1954! Although very dated, it is a good house in a nice area. We would have to live in it whilst we do it and would see this as a ten year house that we would do bit by bit as we go. It is a 3 bed semi, with garage, driveway, 70ft garden. It needs:

New Boiler - Immediately
Double glazing - when we can afford it
New kitchen - liveable until we had the money to install a new one
New Bathroom - liveable until we had the money to install a new one
Lean-to/Dining room completely needs to be started/re-built from scratch - ASAP
Full re-decoration - gradually as we go

My question is, how much should we go in at as a starting offer?

When should we make the opening offer?

We only phoned up about the house today, and as the keys were held we viewed it this afternoon. We haven't spoke to the agent since, we really want this house but after reading many articles on this forum I am trying to be patient and wait in order not to appear too keen.

The agent does not know our maximum budget. She did mention that a couple of developers had shown interest but offered too low, surprise surprise we don't know what those offers were.

We were thinking due to the amount of work required and being a FTB in a good position with finance in place (obviously subject to a succesful survey/valuation etc), to start at £235,000.00. If that gets rejected perhaps offer increments of £5,000.00 until we get to our final offer of £250,000.00. We don't want to play games, we are serious about this house.

Any advice would be gratefully received, we are inexperienced and this is very daunting, its the biggest potential purchase of our lives!

Many thanks in advance all

BitterAndTwisted

What research have you done to discover what similar properties have sold for in the same neighbourhood? How much money will need to be spent on NECESSARY repairs to get the property into an adequate condition?

Gizmo777

We checked Nethouse prices and the house next door was sold for £295,000.00 in 2002. But, it has a loft extension and a kitchen extension which we don't know if it had when sold for that price in 2002. The other houses in the road are not comparable i.e. they are bungalows not semi's etc.
Adequate condition, thats a hard one. At a very rough guess at least £10K to get everything to a blank canvas if not more towards £15K.

Gizmo777

I have just found out from the estate agent that this is actually a probate and the status is free to sell, can anyone offer any advice please RE a sensible offer in this market, we do not want to appear to be time wasters nor taking the mickey with an unacceptable cheeky offer, many thanks for any advice

lanclass_2

Because it's a probate sale, it is likely that they will hold out to get the best they can (although obviously you could argue the other side of the coin and say they want the money as quickly as possible! - depends on the beneficiaries financial circumstances). If you can afford £250k and you think it's worth it, I would be tempted to make a one-off offer of £249,950 stressing your attractiveness as buyers. This offer will not come as a surprise to the estate agent or the vendor because of the stamp duty and it will not be viewed as cheeky. You may then have to play a waiting game but I would also put a 'this offer stands for x time' condition on, otherwise they will hang on as long as possible, thinking they've got you in the background if all else fails. Obviously this is just my personal opinion, and probably lots of people will disagree with me! Best of luck.

lilac_rainbow

Personally I think your plan of going in at £235k sounds like a good one. Go back for a second viewing first though.

When we bought our first home it was a repossession and we were told the same "some developer interest, offers way too low" but she did tell us what too low was (30% under what was already a very competitive asking price).

Gizmo777

Thanks for the replies, after much discussion twoing and throwing we finally bit the bullet and put in an offer of £235K late this afternoon. The estate agent isn't hopeful (I know this is commission based etc so I didn't expect anything else, she is working for the Vendor after all). EA did say that she will give the offer tomorrow morning and call me back, followed by "They have already had an offer of more than that and rejected it before". I did just stress that we are in a unique position in today's market, finance in place and nothing to sell so can move as quickly as the Vendor's would like. Now its a waiting game and all fingers and toes are crossed. On a positive note I do think I have managed to get a slight rapor with the EA, she knows we are FTB's and that this would one day be our family home if we got it, she said that is the pitch she would be giving to the Vendor's. Wish me luck!:eek:

Chinkle

Don't be too pessimistic about the EA, they don't get any commission if they can't persuade their client to accept an offer.

See what they come back with and work from there. Even if a previous offer that was the same or higher has been rejected the owners might be kicking themselves for not accepting it now and getting it off their hands.

Typical investors offer low because they have their profit margins to consider, where as you are looking at it as a potential home.

Catatonia

It sound slike this offer will be rejected. If it is, do not go up in £5k increments to £250k as this is bound to annoy the sellers.

Gizmo777

Thanks again for the replies, Chinkle - that is certainly a perspective I hadn't thought of.

Catatonia - the only reason for our thinking of offering in 5K increments was because we can only go to £250K and needed somewhere in between to try and bargain with. We definitely don't want to annoy the vendors, perhaps that will need a re-think if/when the offer is rejected.

We will wait and see what they come back with and the feedback from the EA.

hermanmunster_3

agreed they may not take lightly to 5k increments on somewhere they can take their time to sell, also probably well aware of the stamp duty threshold and TBH you may just have to bite the bullet over this if you want the house.

I was in the position of chain free sale and even though the house had been on the market longer - did not take kindly to very low offers. I just hung on and got the right amount. (about 35k above the lowest offer - people moving from darn sarf - thought they could by yorkshire for 50p).