House negotiation

[Deleted User]

Hi,
During a house viewing, an agency told me they received offers that they won't accept, such as 20 and 30% less. 
I made an offer after less than 24 hrs for the property, being a cash buyer I offered 10% less than asking price. My offer was fair I thought, and there is lots to modernise.
Few hours my first offer the agency sent me a message saying that sorry but the buyer is currently considering a minimum of 3.5% below the asking price.
I am not an expert at negotiating, but to me that sounded not open to offers below, especially after first saying that they were open to offer just not as ridiculous as the ones they received. 
Anyway, I told them I would be prepared to give my final offer in the next 2 days in case they change their mind. I didn't mention what it was as I have been told they are not currently accepting under that threshold. 
The agency wrote back straight away asking what's my final offer (which would be 7% less anyway).
It is a transaction but I am getting a bit annoyed - any thoughts / guidance? 
Thanks!

eddddy

I'm not sure it's reasonable for you to get annoyed. You made an offer, and the seller rejected it - it happens all the time.

It sounds like you want to 'play some games' by delaying your next offer - which is absolutely fine. But then you can't really complain too much if the sellers 'play some games' back at you.

frogglet

We waited a few days to review our offer. You  just need to hope no one jumps in during this time. Just put your offer in. Negotiating is a game played by both sides.

[Deleted User]

No edddy, the rejection is not the issue. They said clearly the buyer will currently not accept offers below 3.5% less. Still wants to know my offer which is not 3.5% less?

Jeepers_Creepers

All the usual factors apply here, mm82; how much do you want the property, are you prepared to walk away, what is the current market like in your area, how much demand is there for that particular property, etc.

Interesting that the EA has admitted that they've had offers, but 20-30% under asking; that suggests a slowish market in that area and not so much demand; does that seem to be the case?

If so, and especially as a cash buyer, I'd have thought that a 10%-below offer must have been tempting to them, so they either genuinely don't find it acceptable, or they are hoping you can be persuaded upwards but will likely capitulate if you stick to your guns and tell them "No. My original offer stands - meanwhile I will continue to look at other properties". 

There. That didn't help at all, did it?!  

eddddy

maramuch82 said:

No edddy, the rejection is not the issue. They said clearly the buyer will currently not accept offers below 3.5% less. Still wants to know my offer which is not 3.5% less?

It seems like you're overthinking this. If you want to offer 7% below the asking price, just do it.

The EA will do 2 things:

• Try to convince the sellers to accept your offer of 7% below
• Try to convince you to increase your offer

FWIW, it's very possible that the EA 'made up' the 3.5% less than asking price number - to keep the negotiation going.

You might find the seller will accept 7% less, or they might even refuse 3.5% less and insist on full asking price.

(For many sellers, having a cash buyer isn't really much of a benefit. They might prefer to go with somebody offering, say, £10k more but needing a mortgage. Then they would have an extra £10k in their pocket for a new car or luxury holiday! Although anecdotally, some lenders do seem to be down-valuing at the moment.)

caprikid1

"For many sellers, having a cash buyer isn't really much of a benefit."
I have heard it said that often cash buyers are not often considered better at all.
1. Often the cash buyer is a lie - IE The money is coming from another linked transaction IE A sale or a remortgage.
2. Cash buyers can be less emotional and less committed often not getting a survey etc so more than willing to walk away.
3. More likely to use their lack of emotional involvement to chip and the last minute and made demands.
If the property needs work the agent has most likely priced that into the asking price, houses needing work can often be a blank canvas and more desirable for many. 
For an alleged cash buyer you don't seem overly experienced or mature in your approach to the agent. Make your final offer ASAP and leave it with them, the seller probably thinks you are a typical investor looking for a below market value property or a timewaster. When I was in your situation one agent told me you need to look at auction property as you will struggle to achieve what you want via the high street.

[Deleted User]

Thanks jeepers creepers, any comment that helps me as a first time buyer is great.