1st offer rejected. Buying via a zero commission EA?

Manchester-Man

Hi all, we are first time buyers, have a mortgage agreement in principle from our bank and have just made an offer on a house, its up for 115,00 we had 105,000 rejected yesterday (i figured it would be). The estate agents is a zero commission estate agents, i was wondering, does this change the game a little. They gave us a hint they might accept 110,00. Had it been a normal commission eastate agents i might have gone up in 2,000 increments, but as they're not, im thinking they have less to gain, won't they just want it sold? Dont want to go in at 110,000 though now and maybe look too keen and have them reject that one waiting for a bigger one again and i wouldnt be prepared to pay any more than 110,000 for it, i think its more worth 105,000 but as it suits us particularly, id pay a little more.

Thanks

lush_walrus

Goodness, this whole thing of EAs wanting an extra 1000 or even 100000 is just not the reality. Even if commission is 2.5 percent you are talking about a gain of £25 in commission for every £1000 - believe me that is considered nothing. The EA mostly already knows the venders bottom line, and if they don't their job is to get the best price and if an option of buyers the safest bet buyer for their vendor.

No idea what a zero commission EA is, I presume Purple Bricks or similar but that to one side, if the EA has hinted 110 is the price they will accept there is no harm going lower than that and trying them maybe meet in the middle.

marksoton

I don't imagine it's the EA driving the price. Sounds like your offer simply wasn't acceptable to the vendor.

G_M

What makes you think the estate agent decides the selling price?

Manchester-Man

What i meant is, everything ive read tells me its in the interest of the EA to push and push for the highest price possible so they get more commission. But here it isn't the case. So i have more reason to believe them that the lowest the seller will go is 110 than if it was another EA which does charge commission. But as Lush Walrus pointed out to me earlier, even 2.5% on a couple of thousand pound isn't alot of money at all, which i hadn't took notice of before.

BelfastFTB

Manchester-Man wrote: »

What i meant is, everything ive read tells me its in the interest of the EA to push and push for the highest price possible so they get more commission. But here it isn't the case. So i have more reason to believe them that the lowest the seller will go is 110 than if it was another EA which does charge commission. But as Lush Walrus pointed out to me earlier, even 2.5% on a couple of thousand pound isn't alot of money at all, which i hadn't took notice of before.

The EA is trying to save both you and the vendor time. The lowest a vendor will sell for may not necessarily have that much to do with the value of the house, remember...

Paul_the_Painter

It is not in the interest of the estate agent to get the best price, read "Freakonomics" to understand why. It is in their interest to get the property sold to the buyer most likely to complete quickly

AnotherJoe

Manchester-Man wrote: »

What i meant is, everything ive read tells me its in the interest of the EA to push and push for the highest price possible so they get more commission. But here it isn't the case. So i have more reason to believe them that the lowest the seller will go is 110 than if it was another EA which does charge commission. But as Lush Walrus pointed out to me earlier, even 2.5% on a couple of thousand pound isn't alot of money at all, which i hadn't took notice of before.

Dunno where you've been reading that .......... *everything* you've read ... You need to read more widely.

And also understand it's the seller, not the estate agent, that decides whether to accept. Even with your conspiratorial attitude to EAs, you could equally argue that it's in their interest to get a lower price to get a quicker sale and a faster turnover so they can sell more properties.

kinger101

It is partly in the interest of the EA to get a high price. Firstly, a vendor is likely to go for an EA who claims to be able to get a high price. Secondly, if the EA can get a reputation of obtaining a high price for properties, they're more likely to get business.

Although the seller decides whether to accept a price, the EA is likely to have contributed to their expectations about what they might achieve.

So it's more nuanced than many are suggesting. But they're more concerned about their reputation than a few quid extra commission.

eddddy

Manchester-Man wrote: »

They gave us a hint they might accept 110,00.

Don't read too much into this.

It may be just step one. For example, the EA may know that that the vendor won't accept less than £115k, but you would baulk at going straight up to £115k. So he's taking you up in steps.

RedheadFred

If it's an online-only agent they probably got an upfront fee when they were instructed, and don't get anything on completion.