Advice wanted for a first time buyer putting in their first ever offer

RGreenthumb

Hi there!

After a very exciting few days, my partner and I have decided we've found a house we very much like and want to put in an offer. Neither of us have any experience of doing this as we're first time buyers and so I wondered if I might be able to get a little advice on the etiquette of offer making.

The property is on the market for £157,000 and we know that the vendors really want to make an offer on a property they want as quickly as possible, and need a sale agreed on their property to be able to do this. Their exact words to us were "there's a deal to be done if you want to make an offer". But this is where it gets tricky because what does a deal mean to them and is it the same as what it means to us?! Confusing but we think/hope that this strengthens our negotiating position.

That said, we know we don't want to go above £150,000 so we were thinking of going in with an opening offer of £140,000. Is this reasonable? We expect it will be rejected, but we don't want to insult the vendors and somehow weaken our position (I know that sounds daft but we've never done this before and we seem to be terribly British about it!).

We also know that the property nextdoor sold for £130,000 in November last year. One of the bedrooms is slightly larger in the property we want to offer on and it has had a considerable amount of cosmetic revamping that nextdoor has not. That said, we don't think that amount of work equates to the extra £27k on the asking price of the property we want to offer on. Am I allowed to/should I use this knowledge when making an offer as a rationale behind the lower offer, or is it best to say nothing?

I realise there are lots of questions on here so any thoughts on any of this would be really helpful. The Internet seems to be full of lots of advice, but it all seems to be quite conflicting!

Thanks!

pawsies

Your offer seems fair to me with your justification

dell12

Where are you buying? In many parts of more central London you'd be laughed out the door with an offer 10%+ below asking price.

On the other hand if you're somewhere where prices have shown little movement I think it's a decent enough offer. Unless they're desperate to sell it's unlikely they'll accept your first offer anyway. £140,000 seems reasonable to me, particularly if the agent is suggesting they'll accept less than asking price.

As you have done see what other things are selling for in the area and stick to your budget. You can always walk away.

ValHaller

Don't start by justifying your offer - save the justification for explaining why you do not want to pay more.

You have done the right thing by deciding the max you are prepared to pay

RGreenthumb

ValHaller wrote: »

Don't start by justifying your offer - save the justification for explaining why you do not want to pay more.

You have done the right thing by deciding the max you are prepared to pay

So at what point in the offering process do I roll out the justification?

ValHaller

RGreenthumb wrote: »

So at what point in the offering process do I roll out the justification?

When you are asked to pay more?

Duskylady

Offer what you want to pay. It's a business transaction. If the vendors get insulted then you prob won't get them to shift down to £150k anyway. Don't justify your offer just highlight your no chain position as first time buyers and your motivated to move quickly. If they reject try and mine the agent for what level they are "looking for" the agent will prob give you some indication. Then offer again if you wish.

EchoLocation

RGreenthumb wrote: »

Their exact words to us were "there's a deal to be done if you want to make an offer". But this is where it gets tricky because what does a deal mean to them and is it the same as what it means to us?! Confusing but we think/hope that this strengthens our negotiating position.

It means 'we want to make it look like we're flexible, but in actual fact we want as much money as possible out of you'.

RGreenthumb wrote: »

That said, we know we don't want to go above £150,000 so we were thinking of going in with an opening offer of £140,000. Is this reasonable? We expect it will be rejected, but we don't want to insult the vendors and somehow weaken our position (I know that sounds daft but we've never done this before and we seem to be terribly British about it!).

Get this out of your head now - you are not buying a house as a favour to them, you don't owe it to them to pay exactly what they want. If they're insulted by someone not valuing their house at the price they want then that's their problem. So long as you're not rude to them in your dealings then stick to your guns.

RGreenthumb wrote: »

We also know that the property nextdoor sold for £130,000 in November last year. One of the bedrooms is slightly larger in the property we want to offer on and it has had a considerable amount of cosmetic revamping that nextdoor has not. That said, we don't think that amount of work equates to the extra £27k on the asking price of the property we want to offer on. Am I allowed to/should I use this knowledge when making an offer as a rationale behind the lower offer, or is it best to say nothing?

I would make my justifications, postive and negative, with my first offer. As I said, don't feel like because the property has been given a 'value' that that is now somehow set in law as exactly what it's worth. Make your offer, make your case and don't be pushed about.

Good luck!

ValHaller

EchoLocation wrote: »

.... I would make my justifications, postive and negative, with my first offer. As I said, don't feel like because the property has been given a 'value' that that is now somehow set in law as exactly what it's worth. Make your offer, make your case and don't be pushed about.

I agreed with the rest of what you said. I used to think it was the best think to justify an offer when you made it. But frankly, no one is interested. And if you use the arguments at the outset, then you are stuck for something to say when you are asked for more - you will have deployed your best arguments.

Even then, I don't think logical argument comes into it. Someone has in mind a bottom line price below which they won't let it go. You tell them that the one 3 doors down has a nicer bathroom for the money or the one 2 doors up sold for £4,000 less in 2011. Are you going to change their bottom line? I doubt it. Only if you came in with a price over their bottom line will the argument about the bathroom make them back off from seeing how far they can push. In which case you came in too high in the first place.

EchoLocation

ValHaller wrote: »

I agreed with the rest of what you said. I used to think it was the best think to justify an offer when you made it. But frankly, no one is interested. And if you use the arguments at the outset, then you are stuck for something to say when you are asked for more - you will have deployed your best arguments.

But the problem with offering no feedback with an initial offer is that it'll be seen as just that... 'initial', and therefore just rejected automatically. I say give the Vendor / EA reason to take it seriously from the off, it might even then lower their expectations.

ValHaller

EchoLocation wrote: »

But the problem with offering no feedback with an initial offer is that it'll be seen as just that... 'initial', and therefore just rejected automatically. I say give the Vendor / EA reason to take it seriously from the off, it might even then lower their expectations.

I would think of feedback as something you give when you have decided not to take the house or are thinking about having a second viewing. And something which goes by the board if you make an offer.

First offers are pretty much routinely rejected - it does not imply that the offer is not taken seriously. I would agree that managing expectations is an important part of the process - both ways. But the things which do that are very trivial statements compared to a justification.