Negotiating purchase price

exharris

Just after Christmas, I viewed a 2 bed mid terrace property in the north west of England for sale and, without doing any research and out of instinct, offered the asking price of £145k as I loved the look of the property and it was well presented and ready to move in.
Sinde then I have found out that
a) was purchased for only £107k in July 2016 and the current vendor has put in a new kitchen and bathroom (say, £10k if that)
b) my survey has come back with leaking roof (reroof needed, I’ve been quoted £4k), rotted floor joints due to underfloor damp (no idea how much to sort but I’d imagine less than. £2k), and other less serious issues like one failed double glazed window, etc.
c) an almost identical nearby property is currently under officer for only £115k but it has ghastly decor and needs new bathroom/kitchen and complete redecorating.

I am minded to reduce my offer to £130k and see what they say. 

Does anyone have any advise about this? I do like the property location but feel I am being ripped off at 145k not just because of the damage, but because I went in too high in the first place

I have only paid for the survey (£580) so far, not the searches etc so I could walk away but really like the property

kinger101

The 2016 price is largely irrelevant.  Local prices today is what matters.
What did the valuation come back as?  

As for the underfloor damp, you'd need to resolve the underlying cause of the damp rather than just replace boards/joists.  I wouldn't simply assume a figure I plucked out of the air was correct.  

It sounds like you offered far too much for the property.  The thing is, you've set the vendor's expectations high.  You might need to be prepared to walk away on this one if they won't come down to the £130K / valuation.

exharris

Thank you. The banks valuation survey came back at £145k but I think that was just saying they’d agree to lend that much. 

Average prices have increased around 10pc since 2016 so the uplift in asking price from 107 to 145 massively exceeds this even accounting for the kitchen and bathroom. 

Moneyminded

What valuation has the mortgage lender come back with? What value did your surveyor for your home buyers survey come back with? You biggest bargaining chip is if your mortgage lender has valued the property at less or if your homebuyers survey says that the value of the property is lower than the agreed sale price. Without this as leverage there isn't much incentive for the sellers to drop their price. There is nothing to stop you from renegotiating the price being clear that the reason is unforeseen repairs i.e. roof, damp, etc not that you got too excited to begin with. 
Good luck with the negotiations 

AdrianC

exharris said:

Thank you. The banks valuation survey came back at £145k but I think that was just saying they’d agree to lend that much.

They're saying "Yep, we agree this is worth £145k in the current market in the condition we've seen it." What has your survey said about value?

Average prices have increased around 10pc since 2016 so the uplift in asking price from 107 to 145 massively exceeds this even accounting for the kitchen and bathroom

Irrelevant. How does it compare to other similar properties. You know there's a far shabbier place under offer at £115k, despite needing a big chunk spending on it. So you know it's worth more than that. But what else?

exharris

Thanks. My homebuyers survey says ‘ we have NOT valued the property. We advise you to obtain competitive quotations and reports for the shortcomings and defects mentioned within this report so that you are aware of liability before you purchase’

I have a suspicion the vendors (who are the family of the deceased previous owner) are now arranging their own survey. 

Should I obtain a second survey?

pinkteapot

Agree with the others - ignore the 2016 sale price. Firstly, it needed cosmetic work and that often takes more off the value of a property than just the cost of doing the work, as a lot of people don't want the hassle of doing the work. Also, you don't know the circumstances under which they bought it. They might have bought from an absolutely desperate seller who needed a quick sale and was willing to take a low offer. Doesn't change what the house was/is worth.

Focus on what else you can buy in the same area for the same money. That's all a surveyor will do anyway so don't waste your money. 

SmashedAvacado

When offering on a property - i  do the following (unless there are other bidders hovering)
1. offer less than you think they will take (you dont want them to accept your first offer - they will regret doing that and so will you)
2. make sure your first offer includes carpets, curtains, white goods (if you want them). 
3. Go up in small chunks
you want them to think they have fought hard to get the agreed price - and you want to think that you havent overpaid. Anything else will make at least one of the parties less than contented.

The historic price is irrelevant. Just go in low and then increase. You may get an indication of what they want - but even when you get that you can offer to meet them in the middle or not quite get there. Saving a few grand at this stage is easy. I would never use reasons (you dont need to explain why you are offering what you are offering). Just offer it. 

Crashy_Time

Don`t ignore the 2016 price, we are in very different economic/political waters now, many people back then still believed that we wouldn`t leave the EU for example, and a prolonged shut down in China will be a game changer, don`t put yourself in NE because a seller has been watching too many makeover shows, bargain hard for a price reduction and be prepared to walk away if they won`t see reality.