How Much Should We Offer? (FTB)

New_to_Budgeting

Hello Everyone and Thanks in Advance for your Contributions.

Heres the situation. Me and my partner are looking for our first house and are currently saving for a deposit. We have 7k so far and have just seen a house we both really like. In 6 months, we've only seen 3 houses that we both agree we like including this one. (Internet searches, driving round local area)

This will be our first proper viewing and we are both hoping that we can make an offer. Our joint earnings are £38k and so want the house as cheap as poss, but dont want to miss the boat whilst making unrealistic offers.

See the link and let me know how much you think would be reasonable: (3 bed, double garage, conservatory, dated inside and although liveable - could do with new kitchen and bathroom - told by EA) The area isnt the best in town and generally prices vary from £110000 - £146000

http://www.rightmove.co.uk/viewdetails-14547607.rsp?pa_n=1&tr_t=buy

I really look forward to your replies and any other useful info for us novices. Just so you know, we were thinking of offering £134k and moving to £136k if refused (???!?)

VickyA_2

We were looking to buy last year, until my job went t*ts up.

You don't say whether you have been to or contacted a mortgage advisor. Before you do ANYTHING else, I suggest you do that. (preferably whole of market, independent) They will be able to find a product that suits you, your commitments and tell you what outgoings will be. This Northern Rock calculator will give you a little bit of an idea:

http://www.northernrock.co.uk/mortgages/calculator/

Are there similar properties which have recently sold on that street? What were they on the market for? You can find out recent sold prices on:
www.nethouseprices.com

Best of luck!

New_to_Budgeting

Thanks, we saw an adviser about 6 months ago and could get slightly less than what this is on the market for (£140k) However, we are both earning more now.

The other houses will have sold for less, as they wouldn't have had the garage or conservatory. Also prices just keep rising !!!

How much we should offer is what I really need to know - dont want to diddle ourselves and not sure what the happy medium would be between us and vendors?

shelly

It depends on a lot of variables....for example...How long has property been on market? What work needs doing? (you mention bathroom and kitchen) How much do you want the house? Many other viewings? but more importantly have any offers been made?
Our advice is to start your offers low, on a house up for 140K we would make a first offer of 130k. If they say no you then go up in say 2k incremements. Its best to start low then go up bit by bit, as you can go up but you can't go down!!

Also see a mort advisor again soon and get a mortgage agreement in principal. Go to the offering table with your plus points and make these clear. Stress that you have an offer in principal, have no chain and can move quickly. These points alone *can* be worth a few grand off.


Good luck

New_to_Budgeting

Excellent advice thanks.

Only been on about a week, we do REALLY want it and apart from being a little dated, its a good house. Only thing is, worried that 130 / 132 offers may be wasting time in case another offer is accepted whilst we a going in lower - anyone have any thoughts?

shelly

I'd still start bidding low. You will have a maximum budget in your mind so can go to that. The bidding process can be done in a day so don't worry about losing the house. DON'T tell the agent your maximum though. Try to find out subtly if anyone else is interested, for example ask the vendor when you are viewing if they have had much interest.
Also if you do start bidding at say 130k and that is rejected you could make the next offer straightaway, but if the early bids are rejected and as you get closer to asking price make them stew abit. Don't keep making other offers straightaway, that just tells them you are desperate for the property and they will just hold out for asking price. Unless of course you want to secure it immediately and think its worth the full asking price!

Also if say 2 low offers are rejected just ask the EA if rather than keep messing about with offers that aren't likely to be accepted where do you need to be? They can then find a middle ground, or they may say that the vendor is looking for full asking. Saves alot of time and we have found this to work.

ormus

i agree witht he above. id start at 130k and see what happens.
house buying is just like buying a car. the buyer and vendor need to find a price that is acceptable to both.
problems can arise, ie when the buyer has their heart set on it. than all bets are off. similar if the vendor is willing to stay put and get the full asking price.
knowledge is power eh?

just like a car though, you can walk away from it, theres always another one.

webbie

Remember you are in one on the strongest buying positions - and house sellers & estate agents REALLY want that! You are a ftb - and have checked that you can afford already.

I would offer low, say you feel that is all it's worth to you - and you have an appointment next week to see another one, and that has ...... extra on it. Definately look fairly uninterested, but ask as many questions about why they are moving - gives lots of clues to how quickly they want to move. Also ask if they have already found somewhere - if they have - they don't want to lose out either, so want an offer agreed asap. All these make you look stronger.

Best of luck!!

Amitoocautious

So do you have a big deposit then as thats quite a bit on joint earnings?

lottee

You said it yourself, the area isn't the best in town - although it is a great price for what you're getting (dbl garage/cons/ 3 beds etc) but bear in mind how much you will be pay out on doing it up - add this onto the price you are willing to pay, maybe you'd get something in a 'better' area of town? Just a thought perhaps? (Although, appreciate you would possibly need a bigger mortgage.)

vandanfc

Some thoughts on what to take into account - next door (355) went for £114000 in July 2005. No 357 went for £94000 in feb 04. These 2 appear to be the only sales since 2000 on the odd numbered side of the road.

So:
How much have prices changed in that time ?

How do 355/357 compare to what yours has ?