Good starting offer?

Smiiithy

Hi all,

I am looking for some guidance on a good starting offer on the below property:
http://www.zoopla.co.uk/for-sale/details/19099262

The estate agent tells me that it has been on the market for a couple of weeks and had two offers already. One for £95,000 which was rejected out of hand and a separate offer of £105,000 as seen which was also rejected.

It is vacant and I understand that the property is being sold by a son after the death of his parents. The agent told us that the price is to reflect the desire for a quick sale.

One of our concerns is that the property is leasehold with 62 years left on the lease. We would only be able to purchase the lease after living in the property for two years. Our offer could be subject to obtaining the lease prior to sale, but we are yet to have the exact amount confirmed.

Thanks in advance for any suggestion.

Smiiithy

anselld

Firstly dont believe anything the agent tells you, do your own research on local sold prices.

Secondly, even if it is true that 105 has been rejected that doesn't necessarily mean you should offer higher.

62 is a shortish lease so you could make an offer conditional on the current owner obtaining a lease extension, but why are the leasehold anyway? Unusual for a semi detached house.

Mickygg

As aselld says, the other offers could be fictitious. Only offer what you are prepared to pay, don't get sucked into this offers on table schenanigans.

Classic example. I called up to arrange viewing on house a few months ago, and surprise surprise the EA said there was on offer on the table they were considering. I asked the owner when I looked round if she had any offers, and she said she didn't! I'm not interested in games, so I walked away.

Smiiithy

Thanks for the advice, you have confirmed some of my suspicions.

Leasehold is very common in this area, we have seen many 2-3 bed semi's with leasehold tenures.

Any suggestions on a starting offer?

Fire_Fox

As it stands that is a cash buyer only property, it is not mortgageable at 62 years. There is no point in making any offer until you have clarified the vendor is willing to extend the lease and that the freeholder can be located. Please understand that it could take six months to complete the formal lease extension process, I doubt the son will be willing to do this if they want a quick sale. It would make more sense to try to purchase the freehold IMO.

You don't need the exact amount confirming which will take several months to be agreed anyway, use the LEASE calculator. http://www.lease-advice.org/
Calculate the full market value from land registry sold prices in the street and area.

Smiiithy

Got a response from the estate agent on Thursday:
"We have been in contact with the vendors regarding your enquiry it would appear that in principal they would have no objection in purchasing the Freehold subject to the negotiation of a suitable offer. They have also indicated that they are in the process of making enquiries regarding the cost of the Freehold purchase."

Smiiithy

It turns out the vendor is no longer looking to purchase the freehold.

We have seen another property in the same street which we like which has a longer lease of 72 years. It's on the market for £134,950 and my research via land registry, Property Price Advice, Our Property, Net House Prices, Zoopla and Rightmove suggest the market value would be around £120,000. Where would I start in terms of an offer?

http://www.rightmove.co.uk/property-for-sale/property-23132340.html?backListLink=%2Fproperty-for-sale%2Fmap.html%3FlocationIdentifier%3DUSERDEFINEDAREA%255E%257B%2522id%2522%253A1405976%257D%26sortByPriceDescending%3Dtrue%26maxPrice%3D140000%26savedSearchId%3D9089429%26minBedrooms%3D2%26displayPropertyType%3Dhouses%26oldDisplayPropertyType%3Dhouses%26retirement%3Dfalse%26includeSSTC%3Dtrue%26_includeSSTC%3Don%26partBuyPartRent%3Dfalse%23_includeSSTC%3Don%26auction%3Dfalse%26displayPropertyType%3Dhouses%26includeSSTC%3Dtrue%26locationIdentifier%3DUSERDEFINEDAREA%255E%257B%2522id%2522%253A1405976%257D%26maxPrice%3D150000%26minBedrooms%3D2%26oldDisplayPropertyType%3Dhouses%26partBuyPartRent%3Dfalse%26previousSearchLocation%3DNorthburn%2520%2526%2520Brockwell%2520%28Drawn%2520Area%29%26radius%3D0.0%26retirement%3Dfalse%26savedSearchId%3D9089429%26searchLocation%3DNorthburn%2520%2526%2520Brockwell%2520%28Drawn%2520Area%29%26searchType%3DSALE%26sortByPriceDescending%3Dtrue%26useLocationIdentifier%3Dfalse%26box%3D-1.59559%2C-1.56658%2C55.09163%2C55.10801%26popupPropertyId%3D23132340%26mapType%3DMap&fromMap=true

cunning_linguist_2

I'd start around £25k. But you probably like the place a lot more than me.

Offer a little below what you're willing to pay for the place, then you can always move up if it's not enough to close the deal. That's how haggling works.

For more information:
youtube.com/watch?v=3n3LL338aGA

becominganobsessivesaver

I don't know Cramlington that well, but the asking price seems pretty high, given that it is leasehold with relatively not that long left, and also that the north east property market is very slow at the minute.
It really depends on the vendors position as to what may be expected, can you dig a little with the agent?

QBSBuck

Talking from experience. All the properties around here (NE) are selling for between 10-20k less than the asking price.

richardw

Smiiithy wrote: »

..We have seen another property in the same street which we like which has a longer lease of 72 years...

The extending lease malarky is a pain in the neck, if you're serious about short leases you need to read up on what extending leases is all about.