What should my offer be?

noss

Hi all

Bit of a funny question but hoping for some feedback. Viewed a family home/property today for £380,000 (which I thought is too optimistic) which we've fallen in love with. What would be a decent offer to put in? I don't want to put in a very low offer, so much so that the seller is seriously put off and won't even consider any of my future offers. Neither do I wish to put in an offer that may see us lose out on a lot of money.

Any suggestion would be much appreciated.

Cheers

marathon_man_3

Speak to the agent, if there is one, to see how quickly the seller wants to sell.
The agent wants their commission and 2% of a lower figure is better than not getting the sale at all.
Have you sold your property yet? If you have done and are in the position of a "cash buyer", the seller would be more agreeable to a bigger reduction. If you haven't sold your property yet, the buyer may accept your offer but, if they had any sense, would continue to show people around; some of whom might be in a better buying position than you.
Certainly, if I were a "cash buyer", my opening offer would be no more than £345k to £350k. As a buyer still waiting to sell my property, I would go in at about £360k.
However, as I suggested, speak to the seller's agent and see what the lowest offer is that they think would be accepted.

noss

Hi, thanks for getting back. He is fairly keen on moving on and no, we haven't sold our house yet. The agent has actually listed it as a conditional auction for a guide price of 280k.

marathon_man_3

Unless your current property is in a particularly desirable area, the guide price is, in no way, the price that you will get.
Do you pay the auctioneer's commission (plus VAT) for selling your place. If you do, that would obviously reduce your net proceeds available.

My wife and I will be in a similar position, in 2014, when we sell our house and buy another. In our case, due to where we live (the Shetland Islands) we will have no option other than to sell up, put our furniture into storage down south, then rent a furnished place whilst we look for a new home. However, we will thus be "cash buyers" enabling us to get a much better deal than if we had somewhere to sell first. I would hope that the reduction in subsequent purchase price will more than offset the storage rental and the short-term property rental costs. Could this be a possible option for you, perhaps? Is there anywhere within your family who could put you up for a limited period to enable you to pay a lower price?

Incidentally, estate agents are always desperate for their commission. If the seller wants £380k for their property and is paying an estate agent (say) 2% (ignoring the additional 20% VAT), the agent will get £7,600. If the price drops £20,000, the agent's commission will drop by "just" £400 whilst the seller is some £19,600 out of pocket. Thus you can see that, although the agent is employed by the seller to get the best price, they would happily push the lower-priced sale through than completely lose out on their £7,200.

Incidentally (and finally), don't forget the stamp duty in working out how much your new place will cost. It is 3% in your range so 3% of £380k would be a whopping £11,400 on top of all your other selling/buying costs with the solicitor's charges, search fees, the removal costs, the survey fees, the charges levied by the building society etc etc. Moving doesn't come cheap !

noss

HI again! Thanks for taking the time to address my post. I'm sorry, I should have elaborated before, my house is only just going up for sale.

In fact, it is the property we are looking at that has gone up for conditional auction. It was originally listed at 380K (didn't get any response from buyers) and is now at the guide price of £280k. The property is in a decent area, but no where as desirable as the area our current property is in. Do you think this would work in our favour?

I am aware that as we are on a chain, the system is against us in a way but I hope we find a buyer soon as there are a few homes that have sold quite quickly around our area and also our property is a perfect start up property, in a very desirable area for professionals and finished to a high standard.

shegar

noss wrote: »

Hi, thanks for getting back. He is fairly keen on moving on and no, we haven't sold our house yet. The agent has actually listed it as a conditional auction for a guide price of 280k.

Forget it until youve sold your house, its not fair to put an offer on a house when you are able to proceed ........

In fact someone did this to us when we had our house up for sale few years back, we told the the estate agent , please do not bring anyone around our house to view if they are not in a position to buy, it just wastes our time........

moneyistooshorttomention

shegar wrote: »

Forget it until youve sold your house, its not fair to put an offer on a house when you are able to proceed ........

In fact someone did this to us when we had our house up for sale few years back, we told the the estate agent , please do not bring anyone around our house to view if they are not in a position to buy, it just wastes our time........

But then wouldn't it be the case that if everyone wanted exactly the circumstances that suit them personally then no-one would ever be able to move house?

A lot depends on respective circumstances anyway. I am looking to move next year from current area (where I expect to have a suitable buyer within 2 months currently) to an area where things are certainly no faster (in fact houses often take a few months - if not quite some time - to sell).

My plan is to put my house on the market and then put in an offer on the one I want. I won't be hanging around waiting to have that offer on my current one before I offer. I will hope my buyer will turn up very quickly - but, if they don't, then I know they should turn up within a few weeks. Thus, I won't be needing my vendor on New House to wait more than a few weeks before I can say "Right...am now ready to roll ...as my buyer has turned up and started the process to buy my present one". If I had to wait to have an offer on mine before I could make an offer on the Next One then I might lose the one I have decided to buy.

I would estimate that realistically the only way someone could be "ready to roll" immediately on the Next One is if they are prepared to complete sale of their Current One and go into rented whilst waiting for the one they want to buy to come on the market. No chance! Some people might be happy with that - but others of us would simply "sit tight" if our vendor expected that of us (whilst they themselves sat tight in THEIR house.......:cool:) and that "sit tight" vendor would have lost us as a potential buyer of theirs. If everyone sat tight then there would be stalemate.

marathon_man_3

moneyistooshorttomention wrote: »

I would estimate that realistically the only way someone could be "ready to roll" immediately on the Next One is if they are prepared to complete sale of their Current One and go into rented whilst waiting for the one they want to buy to come on the market. No chance!

That is precisely what my wife and I planning to do when we sell our property in the spring of 2014.

We simply have no other logical option available as we live in the Shetland Islands and are planning to move to either the south-west or to west Wales. We simply cannot fly down from here, at short notice to look at properties, as the flights alone would be about £800 or so each time. We will sell our place here, move our furniture into storage down south and rent somewhere on a short-term but renewable let whilst we look for a new place as a cash buyer. The savings available from being a cash buyer should more than offset our rental and storage costs.

Blue22

noss wrote: »

In fact, it is the property we are looking at that has gone up for conditional auction. It was originally listed at 380K (didn't get any response from buyers) and is now at the guide price of £280k..

Have you looked at the terms and conditions of the conditional auction? I would imagine they are rather like a traditional auction.

A non refundable deposit is payable once your bid is excepted and contracts have to be exchanged in 28 days

Would this be possible for you without having sold your house?

Davesnave

marathon_man wrote: »

The savings available from being a cash buyer should more than offset our rental and storage costs.

That's what we found. Same areas as you.

Go for it, though these days you won't get 7% on your money while you rent!

marathon_man_3

Davesnave wrote: »

That's what we found. Same areas as you.

Go for it, though these days you won't get 7% on your money while you rent!

I will have to accept the low interest rates as we have no other choice. Things may well change (for better or worse), though, by the time that we do this in spring/summer 2014.
We will be basing ourselves near Bridgwater as we have identified some places there that do short-term lets. The rental is a bit higher but we will be able to vacate at short-notice without wasting rent.
We will certainly be going for it, as you suggest.