Offer advice (FTB)

girl_withno_name

Hi all,

I posted on these forums a while back trying to get a feel for the appropriate level of initial offers when purchase houses but the general theme seemed to be "come back when you have a property in mind and more information, as it really depends" (we hadn't viewed any properties at this time). Now we've found a property that we like the look of and will be going back for a second viewing next week, with a view to placing an offer.

The property was put on the market for £130k at the end of November and the price has not changed since. According to information on Rightmove, the property was last sold Aug 2010 for £115k (additional info: at that time it was on the market for £128k). The vendor wishes to move back closer to family and has already found a property they like, the estate agents says the price is negotiable and the vendor looking for a quick sale. They've had a few viewers but no previous offers so far.

Our situation is that we're first time buyers renting privately (so one month's notice required) and we currently have about £16k available to cover deposit & fees, although we're hoping to negotiate below the stamp duty threshold. We've already spoken to a mortgage advisor and received a mortgage promise (stating the maximum they would lend us) and a quote (for our information including details of monthly payments & fees). I'm also in the process of obtaining quotes for surveys and solicitors.

Could anyone advise a suitable starting offer please??

DannyboyMidlands

What has happened to prices of similar houses in the area over the last 18 months?

Was £115k a fair price in Aug 2010?

Assuming the answers are nothing really and yes, I would say that the vendor should just be hoping to get their money back. They've priced it a bit over to leave room for negotiation. Alternatively they're banking on £130k in order to afford the next place. Whatever, not your problem.

Have they done any work on the place?

Personally I wouldn't want to pay more than £110k. They can't expect to make a profit by sitting on a house for 18 months in this market. Clearly nobody else is willing to pay much more either.

I'd offer £105k initially.

ps. Talk of hoping to negotiate below the stamp duty threshold worries me. Sounds like you're prepared to pay way too much.

Gonzo33

Not knowing where you are in the country that is a hard decision. Whilst you have 16k Solicitors fees are going to eat some of that up, and I am thinking LTV in relation to your lender and what their requirements might be.

Have you researched how much similar property has sold for in the locality recently? That is where I would start before making an offer.

girl_withno_name

According the the house price indices I've found, the house prices would've moved to ~£113,234 in Q4 2011 so no material movements it would seem.

They've done a small amount of work - tiling in the bathroom, painting walls neutral colours and changing the 'splashback' to match the work surfaces in the kitchen. I'm not aware of anything else. (Additional info: also appears to have 'flat plastered' the ceiling in the living room / dining room ... not sure what the correct terminology would be!)

I'm based in South (East) Wales.

The mortgages will be 90% LTV so obviously need 10% deposit (max £13k in this case, leaving £3k for everything else...)

In December there appear to have been four terraced houses sold with three bedrooms £112k, £176k, £133.5k and £82.5k so prices seem to vary ...

phoebe1989seb

Unless it's in an area where prices are rising, they 'need' the money to afford their next move or they've done masses of 'improvements', I can't see how they can justify the rise from what they paid in 2010......we sold (in Essex) last year and 'lost' around £60k on what we paid in 2007 including money spent on renovations........

I would definitely go in low......perhaps £105k as suggested previously

girl_withno_name

Also - there's a similar property in the same street on the market for £110k (we plan to view this one at the weekend for comparison... and just in case we prefer it!!)

Tried to book a viewing but the property has now been let (?)

DannyboyMidlands

I'm sticking with £105k initial offer. You hold all the cards, you can buy any house.

View as many as you can. A quick Rightmove search shows literally hundreds of 3 beds for sale in Cwmbran. Take your time.

girl_withno_name

DannyboyMidlands wrote: »

I'm sticking with £105k initial offer. You hold all the cards, you can buy any house.

View as many as you can. A quick Rightmove search shows literally hundreds of 3 beds for sale in Cwmbran. Take your time.

I think we've looked, on Rightmove, at every 3 bed property in Cwmbran that's within our budget and some above too! Maybe we're just being picky, but there were only ~10 we were interested in viewing! Saw 5 last weekend, and another 5 this weekend, another couple have been taken of the market (either sold or seller no longer selling)

Gonzo33

Given your answers I would also go in with an offer of 105k, you can always negotiate up to what your maximum is, but obviously not down unless the survey throws anything up.

DannyboyMidlands

You should be picky. You're about to spend a hundred odd grand of your hard earned money.

More vendors will come onto and off the market and/or reduce their price all the time. If you don't end up buying any of the 10, another perhaps nicer 10 will be along soon.

girl_withno_name

I'd never have thought to go with an initial offer of £105k (parents suggested about £120k)... 80% of the asking price does seem very low!!