Advice for house buying negotiation tactics

chopslay

Hi

I'm looking for a little advice on negotiation tactics.

I've just had an offer of £490k rejected for a house that has been marketed at £525k. (It's actually only been quietly marketed at this stage). The EA was saying that they might run an open day soon unless we can come up with a higher offer. (I don't know how likely this is to occur but assume it's not an empty threat).

I'm not really willing to go above £500k. My worry is that this could also be rejected and then I will have set a precedent for future offers

Does anyone have any suggestions for whether I should up my offer now (and if so by how much) or whether better to sit tight?

Thanks

vw100

Sit tight maybe?, if you go over 500k there is 4% stamp duty to pay. Less than 500k is 3%. But it all depends how deep your pockets are and how much you desire this property, someone may well come along and offer near the asking price. It could be the EA is just bluffing as well to get the most out of you. This is something you need to weigh up, set a limit, you may lose the property. Or you can wait it out and see, there may not be any other offers and your original offer gets accepted. Tough one, think its a personal decision. The estate agents knows the 500k threshold, so they may want you to increase the offer by another 10k. If it was me, and I wanted this property, I would go upto 500k maximum and then walk away if the offer still does not get accepted. If I was flush with cash and wanted the house like no other then hell why not offer close to the asking price.

DRP

The vendors are unlikely to offer a discount (>6% in this case) on their asking price this soon - they;'re likely to wait and see what they get from the upcoming open day ... I know I would

Having said that they are priced precariously at the SDLT threshold - they must be aware they're unlikely to exceed 500k.

If you have some USP like you are a cash buyer or similar, then I might be tempted to say 500k take it or leave it and get it off rightmove/no viewings.

If it sounds like i'm sitting on the fence then you'd be correct, but i'm just throwing some options out there for you!

Thrugelmir

chopslay wrote: »

(I don't know how likely this is to occur but assume it's not an empty threat).

No vendor is going to give away £35k without at least marketing the property fully or for a reasonable amount of time.

Propertyauthor

I think the first question is 'what is it worth'? if it's worth more than £490k then increase the bid, but if it isn't and you aren't planning to stay there for a long period of time and it's not your 'dream home' eg 10-20 years, then it's worth holding off and looking for something else.

The hardest bit is to pay the extra stamp duty, so ideally if you can keep offers under £500k, that's best.

However, I recommended someone overpaid for a property last year as prices were rising locally and this was really the only house that the buyer wanted for some years and they were due to stay there for 20+ years, plus they were trading down, so no mortgage involved.

You can sit tight and see if anyone else offers more, then make your decision, but put this in writing to the agent so they have to call you if other offers are made and you can complain if they don't.

Hope that helps a bit, always a nerve wracking moment, but I try to let my head rule my heart and knowing how long I will stay there and whether it's a 'stepping stone' or a 'forever home' is a big influence on negotiations I do. If it's an investment, I never overpay and wait for a bargain to come along.

AdrianC

The difference in SDLT as the house crosses the £500k barrier is £5k. That's all. Yes, it makes a bit of a difference, but it's largely a psychological one.