Negotiation advice

adonis10

So, we may have found a house that we like and could be in a position to offer on it before it comes to market. It is in the same road as this other one (http://www.rightmove.co.uk/property-for-sale/property-58005080.html) I posted about a while ago, but is in nowhere near the same condition. It has been rented out for 8 years and we were made aware of the seller's intentions to sell in September by friends of friends who know the tenant. We managed to arrange an informal viewing and liked it, albeit we would need to do a bit of work (new carpets throughout, wood floor, open up lounge and dining room, move lounge door, new bathroom) so have a price in mind to offer. The other one was basically in showhome condition, with a massive conservatory. It had an offer accepted of 340.


We have been told by the tenant that the owner wants 325 and is happy for us to have it without the need to re-decorate before selling (we will do it anyway) and no agents' fees, hassle of viewings etc. I think this equates to a £7k saving and the time. Basically, we need to call the owner tonight to discuss it. I am worried she will stand firm on 325, however it isn't comparable to the other one (which was listed at 325) and don't want to pay 315. We obviously need to emphasise the ease that this will present (we have no chain and a mortgage approval) and present it in a way that we are doing her a favour. How would you go about the conversation, given the fact that 315 is our top budget?

mrginge

Offer 300 and take it from there.

adonis10

mrginge wrote: »

Offer 300 and take it from there.

That low? I normally wouldn't have any reservations about doing that but I am nervous that if we go in too low she may just decide to say "screw it, I'll go with an agent" which, with the current dearth of decent houses in good areas, may elicit quite a lot of interest and offers.

eddddy

It's more about how you approach the negotiation - and that depends on the profile of the seller.

If they are an aggressive, money focussed BTL investor - I doubt they would accept any early offer from you. They would just use it as a benchmark for asking EAs what they could achieve.

Ideally, you should be selling yourself as a 'desirable buyer' (e.g. proceedable, large deposit, mortgage arranged etc) and asking what kind of price they would be willing to accept from such 'desirable buyers'.

But that's all dependent on who has the better negotiation skills - you or them.


Or if the seller is a charming, nervous, accidental amateur landlord - you could explain to them how selling to you will make the transaction so much quicker and simpler.

adonis10

eddddy wrote: »

It's more about how you approach the negotiation - and that depends on the profile of the seller.

If they are an aggressive, money focussed BTL investor - I doubt they would accept any early offer from you. They would just use it as a benchmark for asking EAs what they could achieve.

Ideally, you should be selling yourself as a 'desirable buyer' (e.g. proceedable, large deposit, mortgage arranged etc) and asking what kind of price they would be willing to accept from such 'desirable buyers'.

But that's all dependent on who has the better negotiation skills - you or them.


Or if the seller is a charming, nervous, accidental amateur landlord - you could explain to them how selling to you will make the transaction so much quicker and simpler.

INdeed, we're going to go down the 'desirable buyer' route. However, my girlfriend thinks I'm to black and white, matter of fact and motivated by money (she's correct) so wants to have the conversation as she is more empathetic etc. This is fine by me but I worry that she will buckle when it comes to discussing the price as she is already emotionally attached to the house. She will be nicey nicey, which is all good, but at some point the topic of cost needs to come up and we need to decide what our standpoint is. Really, in this market, we'll probably pay 317.5 but want to get across that our tops is 315. I fear that the owner will say she has already factored in the saved fees by not having to decorate and use EA's and that's how she arrived at the 325. However, I'm not having that as that effectively makes it 332 and it would certainly cost 15-20k to get it the same as the one that went for 340. I'm not sure how much conservatories cost but they're not cheap.


More advice please..

oligopoly

Impossible to say in advance, surely? But you need to decide what your absolute maximum is (is it 315k or is it 317.50k?). If you want it that badly then you'll end up paying more than you initially wanted! Whilst you may think you're doing them a favour, they know that putting it through EA will likely get them more money, so unfortunately it looks like they hold the cards here.

If it were me, i'd ask what the lowest they'd take would be - for a quick sale and to save the time and money. Only after knowing their response can you make your next move!

ess0two

Stop focussing on the other property that went for 340,i'd be surprised if the vendor accepted an offer based on them paying for your planned improvements.

adonis10

ess0two wrote: »

Stop focussing on the other property that went for 340,i'd be surprised if the vendor accepted an offer based on them paying for your planned improvements.

That isn't what I'm getting at. We've been told that (before we knew about it so before she learned of our interest) she planned to touch it up to get it in a position to sell (decorating, carpets etc.). We're not asking her to pay for our building work and conservatory. The point was she would have to spend about 7k on EA fees and decorating anyway, we are saving you don't have to do that if we agree a sale now.

adonis10

oligopoly wrote: »

Impossible to say in advance, surely? But you need to decide what your absolute maximum is (is it 315k or is it 317.50k?). If you want it that badly then you'll end up paying more than you initially wanted! Whilst you may think you're doing them a favour, they know that putting it through EA will likely get them more money, so unfortunately it looks like they hold the cards here.

If it were me, i'd ask what the lowest they'd take would be - for a quick sale and to save the time and money. Only after knowing their response can you make your next move!

Calling now. Just gonna be as nice as poss without being cringeworthy and see what her minimum price is and then agree to have a think and call back soon at a convenient time.

I'm in overthinking mode. Just need to get it done.

Hoploz

The tenant says ....

What does the tenant know, you need to deal with the owner! Make contact, listen to what the owner says, and take it from there.

adonis10

She told us that if she were to put it on with an EA, she'd go with 325. We said our budget is 315 and she accepted straight out. I think she's got one over on us.