Offer refused - what are my next steps?

jalebi

Firstly, apologies for posting the sort of question that must have been posted a hundred times before, but I need help specific to a house I am looking at.

Asking price £160k
My offer £146k
EA response vendor wants as close to £160k as possible and that she would struggle to get him to go below £155k at the moment.
My response to EA - this is too much for me, get back in touch with me if the vendor would be prepared to negotiate less than this

What I am prepared to pay: maximum £151.5k as I have to factor in stamp duty. Ideally, I want to pay less than £150k as it would then be exempt from stamp duty (the house falls under disadvantaged areas relief)

My thoughts on next steps - wait a couple of weeks. If the house is still not sold, go back asking if the seller is willing to negotiate and put in offer of £149k at same time
Does this sound good? How would you approach this? Your thoughts most welcome

To put things into context, some more info:

• The house ticks all the boxes, is in good condition and compared to all else that is on the market locally - £160k actually seems reasonable.
• The only bargaining chip I have is that there is only one reception room, so I have told the estate agent that we would look to convert the garage into a dining room
• On top of being FTB, I can put down 25%+ deposit and have agreement in principle so am in a good position to proceed
• The seller has already reduced the price from £165k to £160k. He would like a quick sale as is relocating but the impression I get is that there is no rush

Thanks for reading

ess0two

Offer more or look for a cheaper house?you admit its priced well enough @ 160k.

martinthebandit

Waiting a couple of weeks before increasing your offer would say to me that you have looked elsewhere but cannot find anything you like.

In your situation I would probably put an offer of 150k or thereabouts in and tell the EA that is your max offer and you are happy to leave it on the table till you find something else.

go_cat

If you decide to put a next offer mention To the EA about the stamp duty exemption and how much it saves (sometimes you have to spell it out) and explain why you won't go any higher

How long has the house been on the market

Old_Git

On top of being FTB, you can put down 25%+ deposit and have agreement in principle so am in a good position to proceed This is your bargaining tool .
You have a mortgage in place and a good deposit . You need to to make sure the EA gets this point .
If you increase your offer you are bidding against yourself .

brightonman123

see what they bought it for- was it recently..? and how long on the market?

duchy

Walk away or up your offer

If you wait a couple of weeks before upping it -someone else may have made a realistic bid instead and taken it off the market though ! Depends how much you want it and if you can afford to offer any more. It's a buyers market but not a carboot sale after all !!

cattie

jalebi wrote: »

[*]The only bargaining chip I have is that there is only one reception room, so I have told the estate agent that we would look to convert the garage into a dining room

I wouldn't even consider this a bargaining chip! If you look at a house with one reception, then you know how many rooms the house has. It will be immaterial to the vendor whether you wanted to extend the house to create an extra room. Lot's of people view houses with a view to extending into the loft in future, but don't expect the vendor to take a hit on price because they have a desire to change the fabric of the house in such a way.

You've admitted the house is good value at it's current price, so why not just be honest and tell the ea you want to pitch your offer at the stamp duty level to save on unnecessary additional expense and perhaps if you then need to negotiate further with vendor, try to see if you could pay a little bit extra via the fixtures and fittings route.

As vendor has only just reduced they might not want to settle for a lower figure yet, which you can't really blame them for. All vendors hope to get the best price possible for their property.

AMO

If the house is in good condition, has just come on the market and is well priced, the seller asking to be within 5K of the asking price is reasonable and they won't budge for approx 12 weeks.

After that period you know that people aren't lining up to go for the property and you have a better chance of getting it cheaper. Until then, you've virtually no chance unless something happens on the seller's side like they find the house of their dreams at a knock down price.

jalebi

Thanks everybody for your replies, very helpful as ever, although probably not what I wanted to hear for the most part!!

I can't disagree with the points about it being understandable for the vendor wanting to be within £5k of the asking price.

I think my next step will be to go in with an offer just below the £150k stamp duty threshold and tell the EA my reasoning. I still expect that to be refused, so I'm interested in what cattie had to say:

You've admitted the house is good value at it's current price, so why not just be honest and tell the ea you want to pitch your offer at the stamp duty level to save on unnecessary additional expense and perhaps if you then need to negotiate further with vendor, try to see if you could pay a little bit extra via the fixtures and fittings route.

I've only read briefly that the stamp duty applies to the property only and any money paid towards fixtures/fittings is not taken into account provided they are reasonably priced. So, a couple of questions:

1 - who determines what a reasonable price is?
2 - when the purchase goes through, how do I show what part of purchase price was towards fixtures/fittings?

cattie

If you agree a price for f&f, it will usually be shown on the fixtures and fittings list provided by the solicitor for the vendor to fill out. It will be down to you and the seller to determine what a reasonable price is for any items. The seller will usually state a figure and you can always try to negotiate on that.

The money for the f&f is usually paid at the same time as the money for the property is paid as the solicitor will have documentation of what was agreed between you and vendor, but of course it isn't subject to vat or stamp duty.

Remember here though that what you will be doing is trying to increase the amount the vendor ends up with in going down the f&f route, so between you you'd probably agree on what items and prices could be included to ensure they get their extra £1-£2k.

Things like sheds, light fittings, curtain poles, gas fires etc can be included, even fitted wardrobes etc. so it shouldn't be hard to list a decent handful of things to reach an agreement on. Beware though that unless it's a large and expensive house the taxman will likely want to know more if the f&f's come to more than around £2k-£3k. And a decent solicitor will warn you if he feels you are pushing your luck. A reasonable guide is that no item should be charged or listed at over 50% of purchase price, even if relatively new.

Some people do do a private deal, arranging with vendor to pay £x amount for house and then a figure for ficticious or basic f&f and give the vendor a cheque before completion to seal the deal, but you'd need to be very sure of a vendor before even contemplating something like this.