How to phase ‘we want money knocked off’ email

ACG

moneysavinghero said:

ACG said:

Personally, I would hold fire if I were you. 
If you tried to renegotiate with me, I would bang it back on the market. There is no indication houses prices have dropped and reducing your offer based on someones projection is crazy. If you read that house prices were going up by the same amount over the same period would you offer more or be annoyed if the vendor increased the price? 

IF house prices drop, then yes I would say crack on with your reduction email but I can only speak for us and we have already submitted around 70% of what we did last May and we still have 2 weeks to go. The demand is still there. 

Saying you have submitted similar volumes of mortgage applications to last year means nothing. What % are actually getting approved would be more helpful. And it tells you nothing of whether those mortgages were for the full asking price or not.

Halifax price index, Rightmove price index and Land registry price indexes have all shown falls. So not sure how a professional can say there is no indication house prices have dropped

Asking someone to wait to see if house prices drop before dropping their offer is a bit ridiculous. The only way prices will drop is if people drop their offers. It may not be accepted, but if people keep offering the asking prices then they will get their hand bitten off and asking prices will stay the same.

We don't really get declined applications, maybe 1 or 2 a year. So 95% maybe? 

Some of our applications are still on hold pending valuations, but the ones that have been valued (either physically or via a desktop valuation) have all valued up Bob on and gone to offer, which includes those the proceeded while the lockdown was on place and since it has been lifted. 

I am pretty sure Halifax and Rightmove etc have not shown falls on prices as march was a record month and since then there has been a lockdown in place. Do you mean falls in completions or offers (rather than prices?), If so that is inevitable because of the lockdown. Happy for you to prove me wrong though if you have some links? 

Your last paragraph is probably a little more ridiculous. If nobody lowers the price then house prices won't drop... Soooo that means there is no evidence house prices are dropping? Why would I as a vendor accept a lower offer because of falling house prices if there is no evidence of valuations being dropped by surveyors? 

I am not saying house prices will not drop, they very well could. But reducing the price because something might happen in the future is a bit silly, would you offer more because prices may increase?. There is also a possibility prices may go up... People still want to buy, we are still getting enquiries from people wanting to move up the chain and first time buyers , what if less people want to sell? Less supply and more demand... Just a thought. 

numbercruncher8

Houses are assets much like any other. Nobody knows exactly what might happen in the future. But purchasing companies or office space is much cheaper than it was a few months ago. The prices are reduced not because of what will happen in the future, but mainly because of the increased uncertainty of what happens in the future. The virus has produced some downsides that we didn't think was possible before.....who would have thought we could have a world where all businesses are closed for months?

The last time we had a recession, house prices fell but took a long time. That is understandable. People don't want to cut prices, some can't. It also takes time for the economy to adjust. We are still much at the start of this recession. There are many people technically still in jobs because of furlough that will not be once government support ends. If it is anything like history, things will take some time to play out. House prices won't drop massively overnight, but over a period of time. And that is before saying it doesn't affect the market evenly. If drops happen some places will be heavily affected, some places will not be at all. Some may even go up and buck the trend. 

We don't really know enough from the OPs detail so it is not possible to say on that front. There is a lot of generalisation, but it it may not apply to the OP at all.

What we do know is that they are borrowing on top of a mortgage to afford the original asking price. In my view this is not a time to be over-extending and the priority should be building a solid savings chest. (I don't know if they have or not, but why borrow if they have?). We could get a second wave which results in another lockdown and reduced salary. Unlikely, but who knows?

The better thing would be to either negotiate a discount to give you that headroom, or walk away. Paying all your money into a house in an uncertain situation where your cashflow may be at risk and you don't have much to fall back on is risky at this time.

abanksee

ACG said:

moneysavinghero said:

ACG said:

Personally, I would hold fire if I were you. 
If you tried to renegotiate with me, I would bang it back on the market. There is no indication houses prices have dropped and reducing your offer based on someones projection is crazy. If you read that house prices were going up by the same amount over the same period would you offer more or be annoyed if the vendor increased the price? 

IF house prices drop, then yes I would say crack on with your reduction email but I can only speak for us and we have already submitted around 70% of what we did last May and we still have 2 weeks to go. The demand is still there. 

Saying you have submitted similar volumes of mortgage applications to last year means nothing. What % are actually getting approved would be more helpful. And it tells you nothing of whether those mortgages were for the full asking price or not.

Halifax price index, Rightmove price index and Land registry price indexes have all shown falls. So not sure how a professional can say there is no indication house prices have dropped

Asking someone to wait to see if house prices drop before dropping their offer is a bit ridiculous. The only way prices will drop is if people drop their offers. It may not be accepted, but if people keep offering the asking prices then they will get their hand bitten off and asking prices will stay the same.

We don't really get declined applications, maybe 1 or 2 a year. So 95% maybe? 

Some of our applications are still on hold pending valuations, but the ones that have been valued (either physically or via a desktop valuation) have all valued up Bob on and gone to offer, which includes those the proceeded while the lockdown was on place and since it has been lifted. 

I am pretty sure Halifax and Rightmove etc have not shown falls on prices as march was a record month and since then there has been a lockdown in place. Do you mean falls in completions or offers (rather than prices?), If so that is inevitable because of the lockdown. Happy for you to prove me wrong though if you have some links? 

Your last paragraph is probably a little more ridiculous. If nobody lowers the price then house prices won't drop... Soooo that means there is no evidence house prices are dropping? Why would I as a vendor accept a lower offer because of falling house prices if there is no evidence of valuations being dropped by surveyors? 

I am not saying house prices will not drop, they very well could. But reducing the price because something might happen in the future is a bit silly, would you offer more because prices may increase?. There is also a possibility prices may go up... People still want to buy, we are still getting enquiries from people wanting to move up the chain and first time buyers , what if less people want to sell? Less supply and more demand... Just a thought. 

Rics are already saying properties will be lower when the market restarts. It wont let me post the link but google it.

ACG

I dont think RICS are saying house prices WILL be lower, just that they think it is likely. 
But it also seems their opinion is that house prices will be down for 6-12 months tops. 

All I can say is that I as a vendor would not be dropping the price on the basis something might happen and if it does happen it will be for a short time. All of the applications I submitted this year have either completed or are due to complete - not one person has pulled out or tried to renegotiate so far.

I am trying to play devils advocate here, I am not saying the next few months will be all plain sailing, but I think unless we see mass redundancies like we did in 2007/8 then I think any effect on house prices will be limited. 

I know I would not be putting my home up for sale at the minute unless I really had to. And I know I will not be the only one with that outlook, so that is going to limit supply. Demand is still there - unless mass redundancies kick in. 

abanksee

ACG said:

I dont think RICS are saying house prices WILL be lower, just that they think it is likely. 
But it also seems their opinion is that house prices will be down for 6-12 months tops. 

All I can say is that I as a vendor would not be dropping the price on the basis something might happen and if it does happen it will be for a short time. All of the applications I submitted this year have either completed or are due to complete - not one person has pulled out or tried to renegotiate so far.

I am trying to play devils advocate here, I am not saying the next few months will be all plain sailing, but I think unless we see mass redundancies like we did in 2007/8 then I think any effect on house prices will be limited. 

I know I would not be putting my home up for sale at the minute unless I really had to. And I know I will not be the only one with that outlook, so that is going to limit supply. Demand is still there - unless mass redundancies kick in. 

Mass redundancies will come when companies have to contribute 40% to the furlough after the summer. 

ACG

If/When that happens then we can see what effect that has on demand, but until then it is speculative as nobody really knows what the next 6 months will bring and the implications it will have. 
If the people being made redundant are mostly people who work around uni and live with parents, that will likely have a lesser impact than homeowners or people at the stage of wanting to buy their first home.

[Deleted User]

leftism said:

Like many people we had an offer accepted before Covid and now want to negotiate a bit more off. 

How do we phrase the negotiating email? 

Something along the the lines of ‘with the predictions from estate agents/ Bank of England of a XX% price drop, we feel like we have to reduce our offer to xxx’ ??

By the way-
It does play on my conscience to do something like this, but It seems houses are going worth less than they were before. And they had really squeezed us to pay 15k over our budget before (so we were borrowing to make it work), they’ve been difficult throughout the process and the truth is we have less money now through loss of work and rent while we’ve been waiting. 

Thank you! 

Don't worry about it. Prices are falling, you would be crazy to pay the original price and everyone should understand that. The people you are buying from probably did the same thing, or should do. It's perfectly reasonable.

Don't give a reason, just tell them your new offer.

eidand

My point of view as a seller and later buyer is simple: mass redundancies or not, my price won't drop and if that means staying put for a year or so then so be it.
You can come to me and talk to me about realities and guesses as much as you want, I won't be interested.
The only way a  price drop will happen is if I see the kind of properties I am interested in come down by a certain percentage.
In that case my price will come down and it won't be as a result of a buyer asking for it, but simply because of common sense.
If everything comes down then happy days, so will mine. If not, any buyer will have to pay the current price.
My point I hope is very clear, my house was never overpriced, it was always and will always be priced sensibly according to overall market conditions. What this means is this: buyers, FTB or not, will have to do their own research and not come with a straight ... I don't care how much you ask for, but here's 20% less because bla bla., market, crazy, redundancies etc. I expect any sensible seller will do the same. Common sense works both ways.

Splatfoot

eidand said:

My point of view as a seller and later buyer is simple: mass redundancies or not, my price won't drop and if that means staying put for a year or so then so be it.
You can come to me and talk to me about realities and guesses as much as you want, I won't be interested.
The only way a  price drop will happen is if I see the kind of properties I am interested in come down by a certain percentage.
In that case my price will come down and it won't be as a result of a buyer asking for it, but simply because of common sense.
If everything comes down then happy days, so will mine. If not, any buyer will have to pay the current price.
My point I hope is very clear, my house was never overpriced, it was always and will always be priced sensibly according to overall market conditions. What this means is this: buyers, FTB or not, will have to do their own research and not come with a straight ... I don't care how much you ask for, but here's 20% less because bla bla., market, crazy, redundancies etc. I expect any sensible seller will do the same. Common sense works both ways.

Same here.  If people start getting involved in ridiculous offers etc, then we will just sit tight. Ours is already £80,000 less than a smaller house backing onto us so I'm happy with our valuation.  We don't need to move, we want to move so if we get silly offers we'll just pay down the  mortgage more and sit on it.

Thrugelmir

ACG said:

I am trying to play devils advocate here, I am not saying the next few months will be all plain sailing, but I think unless we see mass redundancies like we did in 2007/8 then I think any effect on house prices will be limited. 

Impact was on certain sectors back then. City bankers were able to survive redundancy. This time the damage is far broader and wider.