Buying first house - tips on negotiation tactics

chrisdgo

Hello all,

My girlfriend and I, we are buying our first home. We have a mortgage in principle and 25% deposit ready. (we live in Scotland)
We have found a property we like. The home report says it's worth 250k and the seller has "offers over " 245k. However, the property has some small problems that does not seem to be considered in the report (damaged carpets, broken tiles, older boiler that might need to be replaced soon, etc.), they are minor issues but they can add up. Also, similar properties have been sold in the area for around 10-15% less last year.

So we did a first offer over the phone to the state agent for 226k, citing the issues that will need fixing. Same day we got it rejected, saying that the sellers want to get over the home report price.
I went to my solicitor and he put a slightly higher offer (232k). we wanted to do it via the solicitor to show that we are serious buyers and have everything set up.
After a day, we got rejected again.

As far as we know other have shown interest on the property but there are no other offers, and the property has been on the market for almost a month now.
We are willing to make one final offer for 238 (3% less their asking price), but we don't want to pay more than that due to the repairs (also that it's kind of our budget where we are still "comfortable"). We do like the property, but if it doesn't work out we think we can get other nice places for that money.

Should we wait a couple of weeks before putting down the "final" offer?
Should we wait for the estate agent to contact us?
Any tips?

Thanks!

PasturesNew

Just a thought ....

Houses are priced on "what they are", not "what the buyer has in their mind's eye of the perfect house". There will be stuff to "fix" for some in all houses... but all of that's a question of personal taste, skills to fix it yourself, or priority.

If those things were fixed, it'd have probably been priced higher.

No 2nd hand house is ever perfect. Fact. It's not for the seller to drop their price to match the budget of the buyer's desires to smarten it up.

hazyjo

I'd just hang on. You're only bidding against yourselves. They'll soon find out it's not worth what they want. (Or some desperate person will come along and buy it - might that be you though? Depends what else is out there and at what price.)

chrisdgo

Thanks for your comment!
I agree with you PasturesNew, but if the issues are not even mentioned in the report?
Home reports are not perfect, of course. but if very evident things like the damages on the carpet are not even mentioned, it makes you think that probably there might be other surprises.

chrisdgo

PasturesNew wrote: »

Just a thought ....

Houses are priced on "what they are", not "what the buyer has in their mind's eye of the perfect house". There will be stuff to "fix" for some in all houses... but all of that's a question of personal taste, skills to fix it yourself, or priority.

If those things were fixed, it'd have probably been priced higher.

No 2nd hand house is ever perfect. Fact. It's not for the seller to drop their price to match the budget of the buyer's desires to smarten it up.

Thanks for your comment!
I agree with you PasturesNew, but if the issues are not even mentioned in the report?
Home reports are not perfect, of course. but if very evident things like the damages on the carpet are not even mentioned, it makes you think that probably there might be other surprises.

Grenage

25-30k under their price on the grounds of some grubby carpets and some broken roof tiles is unlikely to get very far; those are really just cosmetic. The old boiler could possibly run for another 10 years.

Look at comparable sales in the area and go on that. If you think 230k is a reasonable price, and the most you'd be willing to pay, don't bother wasting time playing games. Just tell the EA that it's your final offer, and that you're going to move on to look at other houses - the buyer can contact you later if they reconsider, and you haven't already chosen an alternative.

glentoran99

Making the offer "through your solicitor" makes no difference and just costs you money, The house has been valued at what its on sale for, I cant see you being successfully offering 20 grand less for damaged carpets, which you would be replacing anyway

spadoosh

A carpet isnt a house and lets be honest youre not wanting the house for the carpets are you?

The stuff you mentioned probably totals £3k. Quite a bit from your valuation.

There is negotiation with buying and selling houses but its futile arguing over carpets.

If youdve gone in a few hundred quid less and said carpets you mightve had wiggle room but to go in £24k less because of carpets is extreme. It makes you look naive. If you want to knock £34k off a house price you need a better reason that the boiler might break at some poitn and the carpets need replacing. Being honest is probably better than that, just say you can only afford £230k, that way at least they dont just think youre going to be a pain.

I would not want to deal with someone who came in offering 11% less than asking price for something thats worth about 2% of asking price. I would assume they think im stupid and thus wouldnt entertain them.

hazyjo

glentoran99 wrote: »

Making the offer "through your solicitor" makes no difference and just costs you money

It's Scotland. It's how it works there. Solicitor makes the offer.

hazyjo

OP, I'd not be citing anything. Just say 'it's what I feel it's worth to me in today's market'. Don't try to elaborate too much as they'll always have an answer.

chrisdgo

spadoosh wrote: »

A carpet isnt a house and lets be honest youre not wanting the house for the carpets are you?

The stuff you mentioned probably totals £3k. Quite a bit from your valuation.

There is negotiation with buying and selling houses but its futile arguing over carpets.

If youdve gone in a few hundred quid less and said carpets you mightve had wiggle room but to go in £24k less because of carpets is extreme. It makes you look naive. If you want to knock £34k off a house price you need a better reason that the boiler might break at some poitn and the carpets need replacing. Being honest is probably better than that, just say you can only afford £230k, that way at least they dont just think youre going to be a pain.

I would not want to deal with someone who came in offering 11% less than asking price for something thats worth about 2% of asking price. I would assume they think im stupid and thus wouldnt entertain them.

Thanks for the comment!
I appreciate your honesty and all the other people commenting.

I have to admit I didn't use the real figures for anonymity, becuase my mortgage broker told me that some sellers also check this kind of forums. (I am being paranoid, I know, sorry)
So my very first offer was actually 7.5% lower than asking price. The second one was 5.2% lower, and my planned final offer will be 3% lower.
and yes, carpets and some tiles might not be that expensive, but there are four other small things I didn't mentioned. Again, small things but they start adding up.
So, I don't think I am being that unreasonable.

Thanks again!