First Offer Rejected - What to do?

Picara

Hi everyone!

I posted a few weeks ago as I was starting to look at buying my first flat and was trying to decide between 1 or 2 beds, and new vs older build. After hearing your advice, I settled for looking at 2 beds in older builds.

I'm looking in Chorlton (Manchester), it's a very nice area but very little available. I went to view a 2 bed flat that has been in the market for around 3 months now (started at £190K and was dropped to £180K after 2 months or so). It needs some big updates on the inside but it's a great 'shell' and the location is excellent. There were no other offers when I made mine last week, which was weird as property here gets snapped up really quickly.

My initial offer was for £165K (91% of the asking price), and it was rejected, which I was expecting. I planned to go up to £170K for my second offer, but when I asked the agent, they said there are 2 other offers, both below asking price. I asked if my offer was miles away from the others and they said 'not miles away, but one of them is higher and close to asking price'. So not sure what to do now.

I like the flat a lot. There are only 2 other 2 bed apartments within my budget in the area and they are a lot further out, and this one could look great once I put some work into it. If this one doesn't work out, it would mean waiting to see if something else comes up over the next year.

I know the other offers could be a figment of the estate agent's imagination, or at least that they might be low as well as they haven't been accepted, but they could also be legit. Friends have advised that, if I like the flat, I should go with the highest I'm willing to pay for my second offer as I might not be able to get a 3rd offer in, and walk away if it's rejected. That'd be £175K, maybe £177.5K, as it'd be hard to stretch to £180K.

I know it's a big jump from £165K, but I'm worried if I don't get this one, I might be renting for another year. I might get lucky if something else comes up, but there's very little around here that isn't in the £250K+ mark.

So, going with £175K or a bit more, does that sound like a good idea? Planning to give the estate agent a call today.

Thanks!

danlewi2

Offer more if you want the flat - if you dont want it look elsewhere - simple

csgohan4

offer what the house is worth to you, the vendor will have their bottom line. You won't be able to control what the vendor accepts unfortunately.


Compare the prices with others in the area and see if it's over priced. If it is you may find the valuation may cause issues with getting a mortgage if your over stretched

Picara

Thanks both. I don't think it's over priced - 2 beds that are further out are going for £190K - £210K, so with a renovation, I'm pretty sure this one would be worth at least £190K.

I suppose I'll go with what I feel it's worth it - probably £177K - and if it goes to someone else, it wasn't meant to be!

dawyldthing

Don’t overpay though just because there now is mysteriously 2 folk bidding, as these bidders appear all the time. I’d offer £170k still and leave it with them a few days. It’s winter, slow selling time.

nyermen

Also consider that your nature (FTB - no chain) may have some value versus a slightly higher offer from someone else with a complex chain. Ofc they could also be an FTB or full cash buyer.

Picara

Forgot to mention, vendor is a company - the estate agents haven't told me why they're selling, but looks to me like they bought the apartment as an investment, they've now made all the money they could from it and can't be bothered with renovations so they want to get rid of it.

So not sure if timelines matter much to them, they might just be thinking of profit...

Thank you

tlc678910

Do you know how long is left on the lease? Do you know the cost of the service charge and if there are any major works planned. These can have a big impact on value and could explain why the flat is cheaper than others.
Tlc

Picara

900+ years left on the lease. Service charge is on the higher side, around £105 per month, and council tax is band C. It's a very nice building with only 4 flats right in the centre of the neighbourhood, it's just that it needs renovation, but it all looks aesthetic.

Not sure about works planned, but if I get the offer accepted I'd pay for a search to find this out. Offer would be subject to searches and survey coming back positive.

I'm going to go view another flat this afternoon, £160K but the area is pretty secluded and looks a bit unsafe. I'll give the agent for the one I've made the offer on afterwards, before they close, with a £176 offer I think. If someone offered asking price (£180K) I wouldn't be able to go over anyway.

AdrianC

danlewi2 wrote: »

Offer more if you want the flat - if you dont want it look elsewhere - simple

^ It really IS this simple.

They are the only two choices you have available to you. Increase your offer, or walk. Even if you increase the offer, there's a chance the vendor will still prefer another buyer (more proceedable, perhaps, or simply they happened to like them when they met).

Picara

I do want the flat, but I can't go to asking price of £180K. I guess my question was whether a good strategy is to go £175K for my second offer as I might not get a 3rd chance, rather than going into small increments as a lot of people seem to do.

I'm planning to do that, call them after viewing this other flat to offer £175K, and asking them to let me know asap as if the offer is rejected I will be putting in an offer on the other apartment I saw today.

Thanks for the input everyone.