Making Very Low Offers with Estate Agents.

dinofabio

Hi


I’m looking to buy a house. According to the land registry figures, prices have been relatively flat over 12 months to July 2012 in the area I am interested in. I’m a cash buyer so in a reasonable position to proceed if I can get something at the right price.

I am in the process of drawing up a list of properties to view. My intention is to put in very low offers on maybe 3 or 4 properties in the hope that one offer will be accepted. If none are accepted, continue to look and repeat. I’m in no rush. If I have no success after a period of time, I’ll know I’m going in too low and have a re-think.

To clarify what I mean by very low offers, I mean offering on average 15% below what I think the house is worth, and budging very little on the offer. It will be a take it or leave it offer.

However, I’m just wondering about the reaction of the estate agents. There are 3 main players in the estate agency market in my area. By putting in low offers and not budging on price, I’m concerned that the estate agents will not treat my offers seriously and see me as a time-waster; or perhaps give me the ‘cold shoulder’ i.e play hardball by not returning calls, making it difficult for me to arrange viewings etc – just being general pains in the backside and being difficult because they are having to communicate my low offers to the vendors and probably getting a load of grief as a result.

As the majority of properties go through these 3 agencies I really need to try and keep on the right side of them and keep a professional relationship going; especially as my search for a property (and acceptance of an offer) could take some time and many viewings and telephone calls to the same agencies / people.

I know that estate agents are duty bound to submit offers, but like in every walk of life, people can make life difficult for you if they think you are making life difficult for them.

Anyone had any experiences of these sort of scenarios?

******

As a side issue, would making offers on two properties with the same agency be a big no-no?

Tim_Bisley

If you keep making low offers on one property after another it could well come across that you aren't really a serious buyer. An EA will usually have a number of people that they know are serious, and if a property comes up that meets their requirements they will be the people that get the first call. They are legally bound to put an offer forward, but will certainly make recommendations. They are unlikely to put any weight behind an offer from someone who is just offering low to see what happens.

I'd say it was a no-no offering on 2 properties at the same time full stop, regardless of it being the same agent.

SecondTimeBuyer

Don't intentionally go and put 'low' offers on property for the sake of it. Look at properties and review what you believe they are priced, then offer what you are prepared to pay (minus some for negotiation). Use Zoopla, Land Registry, and Property Bee. Put your offer across in a writing with details of your proposed mortgage lender and your solicitor, don't include your LTV or your deposit amount - EA's will try and screw you for every penny.

LisaLou1982

It depends on whether you are putting in a "low" offer because there is evidence that that is all the property is worth or simply because you feel that you are putting a low offer in because you can.

If its the former then i would take you seriously as a buyer. If its the former then i would class you as a timewaster.

EA's are going to contact clients about properties when they know they are serious about them. Would i have contacted you knowing that you would only ever offer 85k on a 100k property (and thats assuming YOU think it was worth 100k in the first place) - No. I wouldnt.

Maybe if it had been on the market forever and i was trying to get the vendor to see reason for a price reduction i might. Other than that, i wouldnt bother wasting my time. However, i used to know ALL of my clients and vendors so already knew if they were likely to accept any sort of offer.

*added to say - you'll be classed as more of a timewaster if you continuously offer on properties that you really couldnt care less if you get or not.

DVardysShadow

If you are serious about the tactic, I suggest that you are upfront about your intentions with the agents and ask to see properties which have been on the market for longer than 24 weeks

spadoosh

DVardysShadow wrote: »

If you are serious about the tactic, I suggest that you are upfront about your intentions with the agents and ask to see properties which have been on the market for longer than 24 weeks

+

Where the owners arent tied in!

Tend to find houses that have been on the longest are the ones that cant budge from their price.


Think with the tactic your playting you might be best looking at auctions or contacting the agents and see if they have an corporate clients (repossesions) as the majority accept most/some offers to recouperate their money.

Better_Days

OP, I think that you may be lucky, but you are also taking a risk, especially as there are such a small number of EA's in your area (there are well over 20 round here). I have put in one low offer (which was rejected), but what I factored in was:
1) SDLT threshold of £250k
2) Property had been on the market for well over a year and needed updating (pink bathroom suite, 15 year old kitchen)
3) This particular EA values high to get business and then encourages vendor to drop the price when there is no interest
4) EA encouraged me to make an offer, and had a good idea of what my offer would be

It depends on the EA in your area, but it may be better to concentrate on building up a relationship with your 3 local EA's, emphasising your attractiveness as a buyer, e.g. cash buyer, no chain, solicitor in place etc.

I certainly wouldn't advise making low offers willy nilly, especially on properties that have just come onto the market, just to see what you can get away with. Instead of a scattergun approach, I would advise that you be more selective, concentrating on properties that you really like and where there is some possibility of a lower offer being accepted (eg probate sale, repo, property been on the market for ages and vendor has found, property bought in part ex by a builder who just wants to get shot of it etc)

Sportacus

Offering 15% less than the asking price doesn't seem too bad, I don't think that would stop the estate agents from calling you if they believe you have the money. Making simultaneous offers with the same agent might be dodgy though.

One question though, why are you more interested in getting the best deal for your money, than in the getting the house you like best yourself?

DRP

Sportacus wrote: »

Offering 15% less than the asking price doesn't seem too bad, I don't think that would stop the estate agents from calling you if they believe you have the money. Making simultaneous offers with the same agent might be dodgy though.

One question though, why are you more interested in getting the best deal for your money, than in the getting the house you like best yourself?

I read the OP as suggesting he would offer 15% off what he thought they were worth ... which could be far less than the asking price.

dinofabio

Thanks for the replies so far.

Just to clear some points up.

The 15% discount on my offer would be on what I think is the correct price for the property, based on any relevant available data I can find. If the asking price was realistic it would be 15% off this figure. If I thought the asking price was too high, I would price it myself and apply then apply the discount. Unless a property is unique, you can usually find something comparable somewhere for pricing purposes.

I wouldn’t make offers on properties unless I was seriously interested in buying. I would be selective in the properties I wanted to view, and only make an offer if I really liked the property BUT the offer would be low with no, or little, negotiation on price.

Yes, I’m expecting plenty of rejections, but I’m hoping someone will accept because the offer is real, on the table, and good to go. It all depends on whether the estate agents are willing to play ball or not for a while. I don’t want to put the EA’s noses out of joint, I’m hoping they’ll work with me.

I’m not worried so much about EA’s giving me the ‘heads-up’ when something new comes on to the market. As I get Rightmove email alerts every day, I’ll only be a day or two behind the ‘preferred’ clients, so I’ll be contacting the EA’s if I’m interested in a property. I’m more concerned about them being not very ‘cooperative’ and downright unhelpful when they know I’ll be going in lower than what they, and the vendor, is expecting.

In a nutshell, will the EA’s get p’eed off with me? or is my ‘tactic’ a routine occurrence and no one will bat an eyelid?

It would be nice to hear from someone in the industry or has experience of submitting low offers.

Nosht

dinofabio wrote: »

Thanks for the replies so far.
In a nutshell, will the EA’s get p’eed off with me? or is my ‘tactic’ a routine occurrence and no one will bat an eyelid?

It would be nice to hear from someone in the industry or has experience of submitting low offers.

1. Yes they will, although it is a routine occurrence with some preferred customers.
2. No one in the industry will ever admit to so doing.
3. Even auctions have "preferred" customers.

Regards,

N.

P.S. Do not forget that the vendor/owner has the final say.