Buying a house - bargaining power

girl_withno_name

In about April next year I hope to start looking to buy a house, I'm sure that I'll have lots of questions throughout this time, but to get me started can anyone give advice on bargaining power please?

We'll have about £16k available for a deposit, so will be looking at houses no more than about £160k I imagine. How much is it "normally" possible to knock off the price?

For example - which of £165k, £170k, £180k negotiated down to £160k are reasonable??

RedFraggle

I don't think there is a straight answer to your question as it all depends on the house, the vendor, whether it's overpriced to start with etc. I would suggest looking at houses with a maximum asking price around 165k unless they are clearly overpriced or in a rush to sell. I'd also be very careful looking above what you're able to afford as it's easy to fall in love with something that you just can't afford. Many people will be losing money on property bought a few years ago too which probably makes it harder to negotiate a lower price.

rrf494g

how much off an asking price?

There's no rules 'cos it depends on how keen/desperate the vendors are for a sale. I would suggest you try and establish this. In these times many people are simply not selling, rather than accept that the market has fallen substantially. Eventually some people have to sell - divorce, death etc. Auctions are the place when sales at the market price are expected/acceptable. Try looking at local auctions to see what prices are going through. Good Luck.

ReadingTim

There really is no short answer, but first I suggest you find out how much you can realistically borrow, and work up from that - for example a deposit of £16k on a property of £160k is 90% LTV, and deals like that are relatively scarce and expensive - you might not get it, or might not be able to afford the monthly repayments even if you did. And don't forget to factor in costs, such as legal fees, stamp duty etc...

However, for the purposes of idle surfing on rightmove, and making yourself aware of what might be out there, I'd suggest limiting yourself to a max price of £175-180k...

Jackop

Why not check the 'Sold Prices' on zoopla or rightmove for houses in the area you want. Then compare them to the asking prices in the same area.

Then you can discern the difference and the asking prices you could look at?

Procrastinator333

Find a probate that has not sold and no offers for 12 months and you will be in a very strong position. Big discounts on asking, sold prices, anything, just takes patience and finding the right seller.

Find someone new to market who doesn't really need to sell and you prob won't get any discount at all.

It is simply a question of who wants, needs, is desperate for the sale / purchase the most.

girl_withno_name

Thanks - I had realised that everyone seller's circumstances are different, hence the "normally"... I was just hoping to maybe get some rough estimate figures, rather than hard and fast rules!

ReadingTim wrote: »

There really is no short answer, but first I suggest you find out how much you can realistically borrow, and work up from that - for example a deposit of £16k on a property of £160k is 90% LTV, and deals like that are relatively scarce and expensive - you might not get it, or might not be able to afford the monthly repayments even if you did. And don't forget to factor in costs, such as legal fees, stamp duty etc...

Thanks for your response... the bank I work for offers 90% LTV and hopefully I could get preferential rates as an employee (something I'll discuss with an appropriate advisor closer to the time), but even at their standard rates the payments are equal to my rent+bills+saving payments at the moment and that's before you split the mortgage payment in two!

As for other elements; a brief look at mortgage calculators online suggest £144,000 would be ok to borrow and stamp duty doesn't apply as we'll be first time buyers looking under £250k

I'm unsure how much legal fees, etc. cost (probably the next thing to look into) but hopefully will have an extra £2k available to cover these (enough or nowhere near!?)

Jackop wrote: »

Why not check the 'Sold Prices' on zoopla or rightmove for houses in the area you want. Then compare them to the asking prices in the same area.

Then you can discern the difference and the asking prices you could look at?

I'm off to have a nosey!!

girl_withno_name

ReadingTim wrote: »

However, for the purposes of idle surfing on rightmove, and making yourself aware of what might be out there, I'd suggest limiting yourself to a max price of £175-180k...

Oh, and this is actually why I was asking Would like to start the whole process with a realistic view of the type of properties available within our budget, rather than potentially end up bitterly disappointed!

ReadingTim

girl_withno_name wrote: »

Oh, and this is actually why I was asking Would like to start the whole process with a realistic view of the type of properties available within our budget, rather than potentially end up bitterly disappointed!

In that case, you've really answered your own question, and you'll just have to sit it out until the spring when you're ready to start the process.

There are a couple more things to be aware of though...:

- the stamp duty holiday for FTBs is currently scheduled to finish on 24th March 2012, and thus far the Chancellor has refused to extend it. You'll need to find 1% of the purchase price (if over £125k) for Mr Osborne.

- if the mortgage is in your own name only, be careful about getting your OH to pay half - if you split up, they could claim up to half of the value of the house as theirs.

girl_withno_name

ReadingTim wrote: »

- the stamp duty holiday for FTBs is currently scheduled to finish on 24th March 2012, and thus far the Chancellor has refused to extend it. You'll need to find 1% of the purchase price (if over £125k) for Mr Osborne.

- if the mortgage is in your own name only, be careful about getting your OH to pay half - if you split up, they could claim up to half of the value of the house as theirs.

Thanks for this - I hadn't realised that the stamp duty situation was going to change next year. I'd be tempted to look to purchase earlier, but that's not feasible in terms of spare time for house viewings, etc.

The intention is that the mortgage will be in both names, with each of us paying half towards the deposit and monthly payments. Either way - if he'd paid half, surely it's only fair that he'd be entitled to half?

s_glover

I'm unsure how much legal fees, etc. cost (probably the next thing to look into) but hopefully will have an extra £2k available to cover these (enough or nowhere near!?)

As far as fees are concerned this might give you a rough idea of how much you may need:

Solicitors fees ~£1000K
Mortgage Fees up to £1000K (depending on product)
Mortgage Advisor fees (if using) ~£500
Valuation / Survey up to ~ £800 for a full structural survey
Stamp duty 1% of purchase price between £125-250K so £1-2K
Any removal fees

Obviously the fees you actually pay will be very dependant on the proterty and the situation.

HTHs