putting in an offer..

viccig

Hi, I have found a propertythat i really want to put an offer in for, however I am totally new to this and was wondering if someone could help?

the house is up for o/a 149950- this is really the top end of our budget and does not leave much for improvements. The house is going to need new flooring/walls decorated and a new kitchen bathroom suite, which although we love the house, buying it at asking price wont let us do most of this.

my question is- where do i start where offers are concerned? the house has apparantly been in the family for 40 years and has been on the market at least a month. I dont want to be too cheeky in my offer, but i also dont want too offer too much and overstretch myself- any advice would be appreciated.

regards
vicky

mr.broderick

Hi gorgeous, start at £131500.

viccig

£131500? is that not extremelly cheeky?? (thanks for the reply btw)

homer_j_3

what price would make it comfortable financially for you and what money are you putting down?

viccig

we have mortgage in principle for £133k we are looking at 25k equity in current property, i obviously have fees to think about, so there wouldnt be a great deal left over at asking price prob about 5k, i pay about £200pm out on personal debts of about 10k so idealy if i can pay part of that we would be reasonably comfortable with mtg payments. if i could have £15k left i'd be very happy

homer_j_3

First I would look at the sold prices for the properties in the area. There are plenty of references to these sites on these boards, personally I use rightmove but I am sure there will be equal or better sites.

I would then look at propertysnake to see if houses in the postcode seem to be moving.

I would then look to see if the price is correctly priced - look for comparables.

I personally would start at 10% under asking price if you feel asking price is right. If that fails go 7.5% and if that fail go for full asking but state that you want the seller to pay your 5% deposit and make it your final offer to leave on the table. That would create you just under 7500 deposit.

You could then choose to put your same deposit down and give you a lower mortgage or you could put less deposit and use the 7500 to either pay for work on the house or clear some of your debts to free up some money on your monthly outgoings.

Good luck

viccig

Thank you very much for your reply, sorry for being thick, but your mention about the 5% deposit confused me would you mind clarifying as this is something i wasn't aware of!
thanks again

homer_j_3

I will probably be frowned upon by some but its what is known as vendor gifted deposit.

It is a paper transaction that creates a deposit and providing the seller would accept the full asking minus the 5% then its just a paper transaction for the solicitors.

In its basics, the seller accepts full asking knowing that on the day of completion they receive 95% of that amount and therefore have gifted you the deposit. Your mortgage lender will take the lower of the purchase price or surveyed valuation as what the property is worth so keeping the purchase amount at full asking that is what it is valued at.

You will need to ask your broker if your lender accepts vendor gifted deposits. Some will, some will but inly if you match and some dont. It may be best to speak to your lender/broker about this before you start talking to the sellers EA about it.

viccig

thanks again you have been very helpful, at least i can go armed with a bit more knowledge now, i was going to go in with an offer of £145k tbh, but after your post im definately going to go lower- they can only say no! The house is actually empty so i dont know if this tends to make a difference, but i'll reply with what happens after i put my offer in.

vicky

Nenen

I've read quotes on this site before stating that the average selling price is 8% under the asking price... so going in at 10-12% less and then moving up a little if necessary would seem sensible (and what we've been doing to date). However 8% under asking price is a nationwide average and so on an individual level a lot depends on 2 things:

1) How quickly this type of property moves in your area... in some areas certain types of properties are known to go in a matter of days for full asking price (or even above asking price where the demand is really high). If you live in an area of this kind of high demand then you probably need to offer much nearer to asking price.

2) How much you want the property and think it is worth... if you have been looking for some time and are sure that this is a good price and offers everything you want then you might not want to risk losing it by offering way below asking price. I'm not in the school of thought that thinks one will 'offend' the vendor by offering too little but doing this does give another potential buyer the chance to put in an offer well above yours and get their offer accepted before you have a chance to offer more (this happened to us and I was gutted)!

Good luck

cats!

Check out previous sold prices at nethouseprices.com as well! Confirm offer with supporting evidence in writing to agent and vendor as well.

Remember, any offer is subject a full structurual survey too.

Good Luck!