New buyers help needed (offers)

Alpaca

There are a few considerations here:

1. The strength of your negotiating position.
The fact that the seller wants to move quickly and has no other interest suggests that you are valuable to them. The other part of this is your position as a buyer. Do you need to sell a property in order to buy this one? Do you need a mortgage, and if so can you show that it's within your means and likely to be approved (low salary multiple, low LTV)? If you can show you're able to progress quickly then that puts you in an even better position to reduce the offer and still be considered a good buyer.

2. The agent's motivations.

anotheruser wrote: »

The biggest thing to remember is that the Estate Agent (who you will negotiate with) works for the house seller. The bigger price, the more money they get. They will do everything, and some will even outright lie to make you pay the original asking price.

It's true that agents work for sellers but (despite what agents will say) it doesn't follow that their interests are always aligned to the sellers'. The book Freakonomics actually has a chapter de-bunking this idea. Agents will care much more about doing more deals than doing one deal at a slightly higher price. As an example, the average house price in the UK is about £250k and to keep the numbers simple, let's say an agent is going to make 2%. If someone offers £240k (£10k below asking price) then the agent stands to make £4800. What would it be worth to the agent to hang around for someone to offer another £10k to make it asking price? Only another £200. So from the agent's perspective it's not at all sensible in that situation to wait weeks or months for the sake of £200 that may or may not materialise when you could bank £4800 now and move on to doing more deals that bring in £5k each. Even though £10k is a significant amount for the seller, £200 is probably insufficient motivation for the agent. In other words, from the agent's perspective a solid buyer and a quick deal on the table are more important than the possibility of a slightly higher offer in the future.

In your case, the fact that there's been no other interest should mean the agent would be even more keen to close the deal with you. "A bird in the hand ... "

3. How to present a reduced offer.
As noted above, it would be helpful to have a reason to give alongside a reduced offer.

Kynthia wrote: »

However in this case I'd be reluctant to spend money knowing I was already likely going to want to renegotiate the price.

This is important. Ideally you don't want to incur any costs in coming up with something to present alongside your revised offer. There are a number of options here (and you could mention more than one):
a) Find out what treating damp might typically cost and then mention the £90 to get a damp survey done plus the cost of treating it as something that you have to prepare for (at least that you may potentially incur these costs, if not definitely).
b) Find out what similar places in the area have been selling for. If you can find evidence of anything similar selling at lower prices fairly recently then that's a helpful benchmark to point to. Something like: "We found out that number 32 with xyz better features than this place went for £xyz (lower than your offer) so we wouldn't want to be paying above the market price"
c) You could simply mention that as part of your preparation to buy, you've been carefully looking through your finances and the maximum that you would be willing to offer is now £reduced offer. You need to be careful with this one that you don't give the impression that you're not in a good position so ideally you'd accompany this with a very strong positive statement about how quickly you can proceed and how the mortgage is a dead cert and you'd want to close quickly at that price.

The bottom line is that you have to offer at a price that you feel comfortable with. If it's a case of either reducing the offer or walking away, you may as well have an honest conversation with the agent to explain that to them. Just make sure to give some reasons as above and present as many positives as you can about your position as a buyer. And hopefully the "bird in the hand ... " principle will spring to the agent's and seller's minds to convince them. If not, all may still not be lost; if they continue to have no other interest they may come back to you later.

Good luck!

Alpaca

Oops - crossed with spunko2010 who made the same point about sold prices:

spunko2010 wrote: »

Best thing is to check recent sold prices nearby for similar properties (not asking prices). If they are seriously lower than your offer, you can pull out.

But I'd suggest using lower sold prices as a benchmark for offering at a lower level rather than simply pulling out straight away.

Harper123

If you put an offer in 3 weeks ago and they left it on the table for all that time, then I'd ask for another viewing before confirming my original offer.

Go back and have another look.

anotheruser

Kynthia wrote: »

Your question wasn't similar. No one said you couldn't renegotiate they said you wouldn't get far without disclosing a reason, and in all cases tge reason needs to be something significant and unknown when the offer was made.

The key words in the original post were "fully explain" - yet someone seemed to translate that into "won't explain anything" and that's why I gave up with it.

Fully explain meaning, list absolutely every detail, together with costs down to the penny. Or just list the main points...