IFA handling negotiating & justifying your offer.

JustAnotherSaver

We've a 2nd viewing coming up & all being well with it (we don't discover whopping damp patches & rotting framework) we're going to try & buy this house.

Our IFA said that he'd handle the negotiating part if we wanted. Gave a scenario where he knocked one house down for someone from the 130k asking price i think it was to about 115k IIRC. While there'll be more detail to it, i'd be happy with anything knocked off this one.

Thing is, our IFA is going on holiday 2 days after our viewing for a week.

* Is the 2 days enough time for him to get the ball rolling regarding offering?

The house is up for £2k over our budget. Ideally we'd like it on or below budget, but we've read that you need to justify knocking the price down. Why is this?
When you buy a car you don't need to do this. In fact when you buy anything you don't NEED to do this, so why when buying a house? If it's up for say £172k & our budget is £170k is there anything wrong with offering £160k hoping they'd settle on £165k for no other reason than you're seeing if they'll accept lower?? I don't understand the "need" to justify your lower offer. Or have i misunderstood & it's not an actual requirement?

* One concern i have about IFA negotiating is that they'll be taking a commission cut. Isn't it in their interest then to have the price as high as possible?

There is no chain on this house. Therefore if our offer is accepted, how quick could we expect this to progress? Or is that unanswerable?


* If we have to do the bidding ourselves (in that this 2 day window is not enough time for the IFA to start negotiating) then do we have to get a solicitor in place first before we put the bid in?

ACG

An IFA gets paid commission on the mortgage, depending on your agreement with them you may be paying a fee and then they are rebating the commission to you or they may be keeping the commission.

Putting that to one side though on average we get around £330 for every £100k mortgage - so if your arguing over £2-3k the difference in commission is next to nothing (£3.30 for every £1k) and its just not worth getting too bogged down with.

JustAnotherSaver

Thanks for that. Yeah the mortgage will be around the £100k marker & the IFA is keeping the commission.

What of the 2 day window? The house has just dropped again to be in the £10k less bracket than it was which brings it to a new audience. We've already had our first viewing & we're happy with the room sizes, we know the location anyway so basically all we're needing to do it check the finer details such as say windows & frame condition, doors, boiler & water pressure etc


On the topic of which, my partner is concerned - what if the person showing us around doesn't know where 1) the boiler is 2) where to turn the water off at 3) where to turn the electrics off at (even important on a 2nd viewing?)

If all is well on this one then we'll be looking to offer that day. We're just unsure how much time the IFA is likely to need to put in an offer with him going away on hol for a week. We'd like it in before hand for obvious reasons - another weeks delay = another week of viewings = more chance we wont get the house.

mrginge

I hope this ifa isn't linked to the ea.

Regardless i think you are overcomplicating this negotiation by involving them. Just ring the ea up and tell them the offer.

ACG

I dont mean to sound rude but i think your worrying too much.
Who doesnt know where the boiler is, there are only so many walls it can hang on and its not exactly small.
Why do you need to know where to turn the water off on a second visit of a house?
With the electrics they will be where the fuse box is - again its going to be on a wall and while theyre not massive its going to easy enough to find.

Speak to your broker, ask him what he says. 2 days is enough to haggle on a price, but it will depend on your broker, the vendor and the estate agent. If the vendor works or wants to mull it over then your a bit knackered. You can always take over the negotiating when he is away.

Does he not have someone who is able to submit the case and speak to the lenders whilst he is away? If not, is he going to be contactable?

JustAnotherSaver

mrginge wrote: »

I hope this ifa isn't linked to the ea.

No, they're not. Not that i know of anyway, unless they happen to be best buddies that i wont know about

Regardless i think you are overcomplicating this negotiation by involving them. Just ring the ea up and tell them the offer.

Perhaps, although when he said he could handle the offering/negotiating, we were happy with this as it was 1 less thing for us to have to do at no extra cost.

ACG wrote: »

I dont mean to sound rude but i think your worrying too much.
Who doesnt know where the boiler is, there are only so many walls it can hang on and its not exactly small.

No offence taken.

Personally, i think the boiler is mentioned in the rightmove ad & therefore i'm not going to go hunting for it when we view. I'm also personally not too bothered about hunting for turning the mains electrics & water off. This was a concern of the missus' not mine.

I've done the vast majority of my tickbox checking. All that's left to satisfy me is checking the condition of the windows/doors & their frames. The water pressure. Any signs of damp. Anything that could be viewed as costly repair & that's about it. The house is only a tad over 10 years old. It's just about all i need from a house as it currently stands.

Speak to your broker, ask him what he says. 2 days is enough to haggle on a price, but it will depend on your broker, the vendor and the estate agent. If the vendor works or wants to mull it over then your a bit knackered. You can always take over the negotiating when he is away.

Your view on the necessity to justify going in with a lower price?

My mum is terrible at haggling & so took me with her to buy a car last year. It was up for £1200 & i offered £1000. IIRC we settled at £1100 which was a fair price for it. At no point did i have to sit down & say, well i'm offering you £1000 for these reasons. My one and only reason was chancing it - seeing if they'd accept, nothing more, nothing less. £1200 would've been a fair price too.
As said, maybe i've misunderstood what we've read, but it seems to suggest you need to justify it.

Does he not have someone who is able to submit the case and speak to the lenders whilst he is away?

Not sure tbh. We'd need to cross that bridge if we come to it

If not, is he going to be contactable?

Yes, he's given me his number & said to contact him regarding any concerns.

ACG

The problem you have is if an offer is accepted and an application submitted - hes then away so if the lender comes back and asks for additional info its going to delay the whole process by a few days - not a major issue in some circumstances but it might be.

As far as negotiating price, you dont have to justify it. If you go in saying this is wrong that is wrong what would you be thinking if it was your home? It may upset them or get their back up.

Just say this is my offer.... When people find reasons, to me it shows a sign of weakness that your looking for faults to get the price down as you do really like it. Once the valuation comes back it may have something on, in which case you can negotiate again if you want but its yoru choice, just like the vendor has the option to decline your offer.

JustAnotherSaver

Thanks again.

Out of interest, is there anything we should've taken steps to put in place at this point?

At the moment all we have ready is money. Approx 35%-40% deposit.

When we went for our first viewing on the house, the person showing us around asked if we had our mortgage in place (or words to that effect).

This must be a standard question, but as a first timer to me it seemed strange. Why would we have a mortgage in place when it was the first house we were viewing at the time & we wasn't even sure if we'd want to buy it? Not only that, but we could've ended up picking a house for £160k, £150k, £120k & so the mortgage figure would've differed depending on this. I just couldn't understand why we'd have it in place at that point.

It makes me wonder though if we're a bit slack - & should there be things we should have in place (but haven't) by now? Or is the fact our IFA (minus his hols) will handle the vast majority ok enough (at this point)?

ACG

Estate agents ask this for one of a few reasons:
-making conversation
-trying to get you to see their broker
-seeing where you are upto

Personally i always put off doing a decision in principle until you have had an offer accepted (where possible anyway) for exactly the reasons you have mentioned - you dont know the final price, you dont know if you will go for it and the offer could expire meaning you then need another credit search to be done. I think your fine, your broker sounds quite helpful so i imagine you will be ok.

Duskylady

I wouldn't justify the price at all. I would make a straight offer no discussion just say I would like to offer x and point out that you have no chain cash buyers and are in a position to move quickly. They will almost certainly decline the first offer and then you can up it accordingly.

It can take a few days though. I've heard that a common ea trick with FTB is to not pass on an offer for 24 hrs as quite often they will phone up and increase it within the first 24 hrs. I would also leave a day or so before upping my offer as it gives the vendor time to reflect, look on RM and dream about their future house etc which may make them look more favourably on offers.

Before you offer. What prices have similar properties in your area sold for.
If possible find out how much the vendors payed for the house as this will tell you how rigid they are likely to be on price. I.e. if they payed 165 they may not be mentally prepared to drop below that as its percieved as a loss

JustAnotherSaver

Duskylady wrote: »

Before you offer. What prices have similar properties in your area sold for.
If possible find out how much the vendors payed for the house as this will tell you how rigid they are likely to be on price. I.e. if they payed 165 they may not be mentally prepared to drop below that as its percieved as a loss

To be honest the sellers are already taking a loss.

According to Zoopla the last entry for a sale is 2008. The house was pitched at a £17k loss. It was then dropped to become a £23k loss & it was then dropped again to make it a now £30k loss. Looking at other houses in the area (small area anyway) it was always at a fair price. We've been inside & can't see anything really wrong with it.

The owners have moved out & it's up for sale through 2 EAs. The word on this from the EA is that they're acting on behalf of a "corporate company".

The house dropped again a bit early in all fairness. We could've done with it dropping right before our next viewing. It's at a very good price now.

It's also only been up since late April. 3 drops in price already makes it seem to me they're wanting quick cash, but the owners have moved out so they can't need it that quick as they must be living somewhere.