Offer tactics?

lazer

I put in an offer at £120k on a house one at £140k - and explained that that was my full offer that it was the maximum i could afford (as it was all the mortgage company would lend - do not show an estate agent an AIP for anything more than your offer!)

They rejected the offer and spouted some rubbish about how its worth more etc - been on the market for over a year.

They put the house on the market with another estate agent for £125k after rejecting my offer.

Finally, i upped my offer to £121k (With a spiel that the £1k was a gift from my parents as I couldn't get the mortgage agreement for £121k) - and it was accepted.

In the end got it for £115k as right of way issues came up during searches

ValHaller

Dan-Dan wrote: »

isnt it just one big theatre val !?

Absolutely. And being overly theatrical gives theatre a bad name.

kilby_007

ValHaller wrote: »

Absolutely. And being overly theatrical gives theatre a bad name.

Just go in with a blank cheque then?

ValHaller

SG27 wrote: »

That's ridiculous, that's the same as saying we are offering 210 but will go at least a bit more if you don't accept.

You are thinking too straightforwardly. You are exactly right as to what the offer says but it is not ridiculous. It is a way of managing the rejection we all expect at 210 for a result (215) which OP would settle for. I would not have suggested it if OP had not said that he would go to 215, nor if I felt vendor was minded to settle anywhere below 220.

A fair guess, given the negotiating position taken by the agent is that 210 will be rejected. And so you could have an upward creep of offers, with the vendor indicating no movement at all. Leading to OP pulling out with 215 being rejected. This is to be avoided if possible

AsI framed the offer, it anticipates that 210 will be rejected but indicates quite clearly that a deal could be struck at 215. A basically competent agent will understand exactly what is being said and tell the seller "We have an offer of 210 - I think I could push them to 215, but that is probably as far as they will go - would you be prepared to accept that?"

It takes the heat out of the situation and puts the vendor to thinking a bit further ahead and deciding perhaps to take a lower offer, but leaves him feeling that he has the initiative.

If you like, it is letting the vendor loose on a short lead.

ValHaller

kilby_007 wrote: »

Just go in with a blank cheque then?

The essence of drama is conflict. Where is the conflict in a blank cheque?

BTW, ny earlier post is emphatically not a blank cheque. Far from it.

kilby_007

Valhaller I see what you are saying, but I still think it would be silly to place an offer whilst giving away that you can afford more. I think the problem you're referring to may be "linear bidding" - so if I bid 205, then 210, then 215 - it gives the seller no indication how close you are to your target. However if you go 205, then 212, then 214 it gradually gives the impression what your top end is but it also gives the buyer an opportunity to get it cheaper than their maximum bid (without blatantly giving the game away!)

SG27

ValHaller wrote: »

You are thinking too straightforwardly. You are exactly right as to what the offer says but it is not ridiculous. It is a way of managing the rejection we all expect at 210 for a result (215) which OP would settle for. I would not have suggested it if OP had not said that he would go to 215, nor if I felt vendor was minded to settle anywhere below 220.

A fair guess, given the negotiating position taken by the agent is that 210 will be rejected. And so you could have an upward creep of offers, with the vendor indicating no movement at all. Leading to OP pulling out with 215 being rejected. This is to be avoided if possible

AsI framed the offer, it anticipates that 210 will be rejected but indicates quite clearly that a deal could be struck at 215. A basically competent agent will understand exactly what is being said and tell the seller "We have an offer of 210 - I think I could push them to 215, but that is probably as far as they will go - would you be prepared to accept that?"

It takes the heat out of the situation and puts the vendor to thinking a bit further ahead and deciding perhaps to take a lower offer, but leaves him feeling that he has the initiative.

If you like, it is letting the vendor loose on a short lead.

That's fine if you've resigned yourself to paying 215. But you want the chance of getting it for 210.

The figures are very similar to when I bought a few months ago. Asking price 235 We offered 205 which was rejected we then offered 210 but were prepared for going to 213 but we didn't need to as 210 was accepted. We told the agent 210 was our max.

ValHaller

SG27 wrote: »

That's fine if you've resigned yourself to paying 215. But you want the chance of getting it for 210.

You would want the chance of getting it for 200 or 190. But you would be prepared to pay 215 for it.

Meanwhile your vendor is giving every indication that they will not go below 220. Vendor has said via Agent offer is expected at 225 or over and something has to be done to shift them from that. Effectively the message is more money if you drop your price.

Now if you think that your vendor will drop to 210, don't offer more than 210.

Riggster

Just go in bosh £215k. Explain that's all you got. You'll soon get an answer either way. No point messing about.

kilby_007

Riggster wrote: »

Just go in bosh £215k. Explain that's all you got. You'll soon get an answer either way. No point messing about.

Tempting as it is, I don't think estate agents know what honesty is. They only know messing about!