Offering more than 10% lower after research

bradyhv

Jeepers_Creepers said:

Hi Bradyhv.

Good research indeed :-)

Have you actually looked round the property? Has the garage been converted properly - does it still have a garage door?! If so, and even if it has a partition wall immediately inside the garage door, it's very unlikely that PP was applied for to make this conversion to a habitable room, and - even if PP was not required - it's equally unlikely that Building Regs were followed. 

When was this 'conversion' carried out? It's probably too late for the LA to act on it, but I understand it's equally naughty for the EA to be passing this off as a valid conversion when they should know - or suspect strongly - that regs weren't followed, nor a completion cert obtained.

There is absolutely nothing wrong with you having a detailed conversation with the EA (making sure it's a proper 'negotiator' who knows this property you are talking to, and not a receptionist/viewer) where you can ask about this garage and its validity ("Does it have a completion cert? No? Should you be advertising it as a bedroom...?" I understand that an EA should now be upfront about such info - once they are made aware of it), and also ask them how they arrived at the asking price; "Was this set by yourselves, or was it insisted on by the seller?" If the latter, ask the EA if they don't agree it's a bit 'excessive'... 

Finish by telling them that you love the house, are genuinely interested, but simply do not recognise the asking price as being remotely reasonable. Your research points to the house's current value as being circa £240k, so there is nothing wrong with you putting that to the EA. 

Ultimately, of course, a property's 'true' value is what it ends up being sold for. And what it's worth to you. How gutted would you be to miss out on this one? And how likely is it that an equally attractive - but likely cheaper - house will come along in that area? 

Yes it does still have the garage door! I certainly thought that wasn’t right so it definitely sounds like I’m right to call this into question (respectfully of course) thank you so much for your reply and helpful advice really appreciate it! 

bradyhv

blue_max_3 said:

Don't trust those predictions, they never seem to work.
Maybe watch it a while and see if it gets reduced. If it gets a reduction, your offer may not be so far off.
You could have a word with the agent and maybe suggest you're in a strong position, but feel the price is unrealistic and see if they can take that back to the seller and maybe start a dialog.

Thank you! I think this is the approach we will take for now, I will get in touch with the agent and keep my interest and position known but keep my cards close to my chest for now as see if there is a reduction. Appreciate the reply! 

RelievedSheff

I don't see where the problem lies here. If you don't think it is worth what the vendor is asking for it don't buy it. Find something else to buy instead.

Unless you are serious about this property and will get somewhere near the asking price I wouldn't even waste the agents time by registering an interest if your offer is going to be nowhere near what the vendor is hoping to achieve.

pinkteapot

There will always be deluded sellers and EAs willing to market the house at the price they want. There’s very likely no point you viewing and offering on this house. 

A few years back an EA was trying to convince me to view a house that met our criteria but was massively over priced compared to similar properties on the market. I said there was no point as we’d pay nowhere near asking. They went on and on and said it was a lovely house so in the end we viewed and then I told the agent it was lovely but still overpriced. They pushed me on what we’d pay. So I put in an offer, over 15% below asking, at which point the EA tried to get me to retract it because they clearly didn’t want to put it forward to the vendor. 

Honestly, if something is really significantly overpriced just write it off and view the other houses that fit what you want where the price is in the right region. Especially if this one has been on the market some time. 

(That house I went to see? Sold three years later for slightly more than we offered, and prices had risen in the meantime).

AdrianC

bradyhv said:

MysteryMe said:

I think you are wasting your time and everyone else's putting forward your "evidence"  justifying how you have arrived at your offer.  Just make your offer, provide relevant information such as FTB, finances in place, and if it's rejected you either increase it or walk away.  
IMO you would be spending your time more productively seeking out properties that do meet your criteria of a fair price.

I do think that’s a little rude as I never said I would put any of what I said above to the EA or the Vendor, why would wouldn’t I do research as well as a viewing to the help me reach an offer figure. Surely every lower offer has justification behind reaching it - I would be a fool to just pluck a misguided figure out of the air so I’m not really sure how I’m wasting my time

If you aren't going to put this justification to the EA/vendor, then what's the point in having it?

If you do put it to them, it's not going to make the slightest difference as to whether the vendor likes your number or not, of course...

Mickygg

Forget putting forward your reasoning. The vendors have a price in mind and couldn’t care about your research from zoopla!

Put offer forward you have nothing to lose. There could be many reasons why the house was bought at £x several years ago. It doesn’t really matter what it was bought for, it is all about what the house in the area is worth now. 

Jeepers_Creepers

Absolutely, Adrian - EA's are meant to be 'negotiators', and there's every chance in this case that the seemingly-inflated asking price was insisted on by the vendor. It is better for the EA to be able to submit a low offer with proper, reasoned justification provided by potential buyers than them to simply say "Here's their offer. Nah, I don't know if that's all they can afford...".

If the EA is struggling to get his message across to the vendor regarding its 'true' value, then this will help his case; 'buyers out there are not stupid'. 

By all means also ask the EA whether the garage has a completion cert - again, it'll put the buyer (and possibly the EA who is advertising it as a bedroom) on the back foot.

Of course, the only thing that'll actually make them drop the price significantly is that it (a) doesn't sell and (b) they want to sell!

My gut says to play the waiting game and see how it pans out with your offer left on the table. Make it clear you are actively continuing to look elsewhere - and, obviously, do so. 

If you were, instead, to offer close to the inflated asking price just because you convinced yourselves that this was your dream house, what are the chances that better - and cheaper - properties will continue to appear over the next 6 months or so, and how will you react knowing you've paid over the odds? :-)  Of course it's a gamble either way, but it's a case of weighing up the 'chances'.

In my own personal experience, we have never regretted missing out on our 'dream' properties each time we moved up the ladder - sometimes by being gazumped, sometimes by things like onerous covenants; a better place has always come along shortly afterwards. Always. 

bradyhv

Jeepers_Creepers said:

Absolutely, Adrian - EA's are meant to be 'negotiators', and there's every chance in this case that the seemingly-inflated asking price was insisted on by the vendor. It is better for the EA to be able to submit a low offer with proper, reasoned justification provided by potential buyers than them to simply say "Here's their offer. Nah, I don't know if that's all they can afford...".

If the EA is struggling to get his message across to the vendor regarding its 'true' value, then this will help his case; 'buyers out there are not stupid'. 

By all means also ask the EA whether the garage has a completion cert - again, it'll put the buyer (and possibly the EA who is advertising it as a bedroom) on the back foot.

Of course, the only thing that'll actually make them drop the price significantly is that it (a) doesn't sell and (b) they want to sell!

My gut says to play the waiting game and see how it pans out with your offer left on the table. Make it clear you are actively continuing to look elsewhere - and, obviously, do so. 

If you were, instead, to offer close to the inflated asking price just because you convinced yourselves that this was your dream house, what are the chances that better - and cheaper - properties will continue to appear over the next 6 months or so, and how will you react knowing you've paid over the odds? :-)  Of course it's a gamble either way, but it's a case of weighing up the 'chances'.

In my own personal experience, we have never regretted missing out on our 'dream' properties each time we moved up the ladder - sometimes by being gazumped, sometimes by things like onerous covenants; a better place has always come along shortly afterwards. Always. 

I’m a little confused as some people are saying I’m “time wasting” and my justification doesn’t matter but then again there is responses like this one! Absolutely love this response thank you, I think you’re right and this will be the approach we take 🙂 all’s I really wanted from posting this discussion was ensuring that I wasn’t being unreasonable or totally naive with the reasonings I had found and seen for myself. I would be disappointed if this property sold but it wouldn’t be heartbreaking or devastating at this point so we will very much be remaining active in our search for other local properties.

Thank you all! 

MobileSaver

bradyhv said:

why would wouldn’t I do research as well as a viewing to the help me reach an offer figure.

The brutally honest answer is no-one but you cares about your research/evidence/justification and for every reason you can put forward for offering less, the vendor can put forward a reason why their property is worth more. The most obvious one being if a bigger 3 bed sold for less in January then why don't you buy that one instead? Your answer would presumably be "well, that one is no longer for sale" to which the vendor will say "Well, exactly, but mine is for sale and this is the price..."

To be even more honest, some of your justification is decidedly dodgy; there is simply no comparison between a semi-detached and a detached house. Even more damning is to mention Zoopla; you will be laughed at and not taken at all seriously if you mention Zoopla estimates as they are nothing more than a joke with very limited entertainment value.

As pretty much everyone has said, simply offer what you are prepared to pay and if that is rejected then look for another house. Or you could follow Crashy_Time's advice, only offer £200k on a £270k house and refuse to buy until the deluded seller comes to their senses; the only downside to this approach is that, just like Crashy, you will probably still be renting and paying your landlord's mortgage instead of your own fifteen years from now...

ecraig

My estate agent doesn’t send me the offer from a potential buyer along with their story about why they offer £x. 
I am only interested in the £ offer; investor/mover/chain/ftb status.