Offering low on already reduced house

PixieP

My partner and i are in a similar situation. We're first time buyers, and have been looking since early Jan. On Saturday we viewed a 3 bed, detached house which we both love. It ticks pretty much all the boxes - requires no work so we can move right in to.!

It’s on for £255k - having just dropped from £275k! However, I’ve done my homework.... in July 2007, at the peak of the property boom, a house opposite which is identical sold for £245k. So in the current market, with house prices having dropped during the recession, you would expect it to be worth about £235/£240kish (and there were two 4 bed houses that sold in 2006, which was still in the boom, for £250k). So that’s what we offered today - £235k, planning to go up to £240k max. Anything more and I really feel we’d be overpaying. They paid £215k for it in 2005 so they’re making money from it. Technially house prices are at a lower point than they were in 2005, so really they should be in negative equity. But I think they got it for a bargain in 2005, I think it should have been worth about £230k back then. It’s lucky that all the houses down the road are a similar size so comparison is quite easy. Some have 4 beds and a few have driveways (ours is 3 bed, no driveway), but you can see on the previous house sales that these go for slighltly more. But nothing has sold since this house opposite in July 2007, so it’s hard to gauge what they’re currently worth. But I think it’s reasonable to assume they’re worth slightly less than what they were going for in the peak.
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So I called and offered this morning, it took ages for them to get back to me. Basically it was rejected (no real surprise) because they were hoping to get closer to the asking price, or at least £250k minimum. So I told them there’s no way we think it’s worth that and we certainly wouldn’t be offering that at all. He said that they said the house opposite that sold for £245k in 2007 was a bit of a do-er up-er (not sure if I believe that, am tempted to go round there, knock on the door and ask!) so it wasn’t necessarily a direct comparison. So I said we’d think about it, but that we’re in no real hurry as we can stay in our rented flat as long as we need. So I said I’d discuss it with My partner tonight and I might call them back tomorrow.

Then he called back an hour or so later and said that he thought we should know that they’ve found another property they’d like to buy (I had been told they’d already found a place, so I don’t know if this is a new one, or if all of this is total bull), but that this new property they like is actually a lot less than they thought they were gonna need to spend, so they might not be so reliant on getting the £250k anymore for their house. So I said that that was interesting, but in actual fact what they’re buying isn’t important, it’s the value of what they’re selling that’s key – why should I overpay on their house so they can buy something bigger?! (was getting a bit stroppy by now!!). He just said that he didn’t want to put us off totally by giving us the impression that they wouldn’t accept any lower than £250k.

So now we can up our offer. I just don’t know what to do... maybe go to £237k and see what they say, with the option of going further again if they reject it, or offering £240k and we want their range oven (cos that would be handy, because it’s one of those big ones) and their fridge-freezer too – and make it clear that this is our final offer, we won’t be budging and they can take it or leave it. Although we’d accept the £240k without the oven and freezer, but it’s something other than cash to do minor final negotiations on.

Any advice??

Doozergirl

He was telling you that they're keener to sell than he first let on. So it's very interesting as they're in the position where they really want a house and are currently in the situation where they might be more in the position to compromise if they can tie this up quickly and get the house they're looking at.

I'd do the £237k and then if they reject it, ask what they're prepared to accept, then keep going from there. You might offer to work to their timescales eg. if they need to move quickly on this one. Do save the cooker and fridge for last.

DVardysShadow

Phunky wrote: »

I find what Doozergirl very interesting, when I rang the EA today I was quite shocked at how abrupt shes was to get off the phone once I gave my offer price, she didnt even give me the chance to explain why I felt our offer was reasonable (Bought at peak time, no properties sold for anywhere near asking in last 5yrs, pervious survey report) she did however get back to me very quickly with the rejection.

Nobody is interested in why you think your offer is reasonable. They are only interested in the amount you are offering and whether they can get buyer and seller to meet on a deal. Are you interested when an Agent starts telling you why a house is on at a particular price? It is largely a waste of time either way.

DVardysShadow

Doozergirl wrote: »

I'm going to rant now. I'ts not aimed at anyone in particular but I have read too much over the weekend by buyers who haven't done enough homework to build an idea of what a property is worth and think that this forum is telling them that they should only pay 90 or 92% of an asking price of any house on the market, regardless. When we did we start telling people this and what happened to common sense?!

And I shall tell you as a vendor that it drives me insane when people don't show themselves as keen! Why do people think it's a good thing to look disinterested? If you look disinterested, I'm disinterested in you and somewhere someone is missing a potential sale because a vendor or an agent miss the buying signals.

....

I hate first and final offers; they don't give anyone any leeway for negotiation. Even if you final offer is low, I'd start lower simply to get the vendor hooked on the idea. Otherwise, what you get is a flat 'no' reaction from the vendor and then they get nothing back from you so they forget. It is a game of cat and mouse; and a good agent will work a vendor just as hard as they might work you to go higher. You need to give them a chance to see that you are serious and start working your side of the deal for you - which I can assure you they will; they work for themselves, not for vendors!

....

DG, I agree with a lot of what you say.

And I do find it a trifle arrogant to go in with a first and final offer. To some extent they portray that the buyer is out to impose authority over the seller and this makes for a poor start to the process. Mirroring the ideal and top price idea for buying is the asking price and acceptable price for selling. Only if a first and final offer is clearly an acceptable price is it likely to be accepted.

It seems to be FTB's who have this first and final idea. But the people they buy from always have at least one purchase more experience, so it is quite understandable that rather than continue through the whole house sale with a pair of jerks they will want to rebalance the power equation. This leads to a swift 'No' and the jerks have to eat humble pie or go away.

Now, as to looking interested, DG, on the whole, I think you are right. However for FTBs only, I think things are a little different. You only get your FTB house when you reach the top of the pile. And all FTB houses cost very nearly the same in a particular area - particularly when mortgage finance is tight. Agents treat you like sht, seem to hinder you and not be bothered with you in a way which I have not seen at any later purchase, particularly if you are single or they perceive that you cannot afford to buy. If you do see a house you like, you can fear that the agent will snatch it away, you sense they are teasing you. I think it is understandable that some FTB will overreact and play it over cool with the agent.

PixieP

Doozergirl wrote: »

I'd do the £237k and then if they reject it, ask what they're prepared to accept, then keep going from there. You might offer to work to their timescales eg. if they need to move quickly on this one. Do save the cooker and fridge for last.

Thanks for the advice. I'm going to call today and offer £237k and reiterate our position. We've also got no holidays booked yet this year, which I know isn't normally a massive selling point, but my brother is in the process of buying a house and it's all being delayed due to someone in the chain swanning off to Africa for three weeks! So it can't help to mention that too I guess.

If they come back with a flat no like last time, we've decided to leave it for a while. We're not willing to do one way negotiations. We do love this house, but we don't want to pay more than we feel it's worth, so will risk losing it by walking away and giving them some time and space to think things over.

Will keep you posted!

PixieP

Okay, so I just put our second offer in:

Told them this:

• Would like to increase our offer we made yesterday
• Also add, that as well as being first time buyers in rented accommodation we don’t have any holidays booked this year, so we’re able to move quickly and without interruption (unlike my brother who is causing issues with a holiday he’s going off on – causing a massive month delay to the chain! I used him as an example, but didn’t tell them it was him causing the problems!)
• I’m based from home three days a week, so am available to action anything that comes up regarding the sale

Our increased offer is £237,000, based the following conditions:

• All future and current viewings are cancelled
• The property is withdrawn from the open market immediately and we have exclusivity over it
• The sold board goes up within 48 hours
• We receive weekly updates on the progress of the chain
• Obviously this is also subject to contract and a satisfactory survey

Fingers crossed!!

I don’t think they’ll accept this one either though. I guess they keep on rejecting until you get somewhere where they’re happy (which I don’t think they’ll be happy with this latest offer) or until you say it’s your final offer and walk away (then hopefully they come crawling back a week or so later).

paul090971

My mate got gazumpedl on a property the day he was due to sign. Someone drove through the village, saw the sold sign. They called and asked the EA if it was completed yet, agent said "no". He walked up the drive & offered £10k more to sell to him.

I am selling my house & when I find the house of my dreams I want that FOR SALE board down & out of sight! I will not even accept a sold sign

Paul.

steph_p123

Hi PixieP

Just to give you a bit of hope...

My friends fell in love with a flat that was first on for £150k at the end of Jan this year. By the time they saw it one week later - the price had been dropped to £119950 ( a little bit more realistic for what it is!)

They had a mortgage arranged for 102k (they had previosuly been gazumped) so put an offer in for 98K. this was rejected but their second offer of £101k has been accepted!!

So from original price the offer accepted was 33% below. I know this is quite rare but has certainly given me hope!

Doozergirl

Good Luck Pixie

tyllwyd

Originally Posted by tyllwyd
So you are going to ask the sellers to name their lowest price and then offer less? Can't say I'd be impressed if I was the seller!

Doozergirl wrote: »

I'd happily do it, and it's what I always suggest. But I'd do it through the agent. I think they'd need time to consider. If you do it there and then and expect an immediate answer to a lower offer, you can pretty much guess what the answer will be.

That's pretty much what I was thinking - if you ask someone 'what are you looking for' and try to meet them half-way that's one thing.

But if you ask them 'what is your lowest price' and immediately offer less, they either lose face by accepting something they told you a moment ago was not acceptable, or if they have given you an honest answer they won't be able to accept your lower offer. IMO its not good tactics to put the seller on the spot like that!