First offer rejected, what now?

HeidiBoBeidi

Sorry for the long post, I just want to be sure to explain properly. I posted the other day asking how low was too low with regards to making offers on a house with a lot of issues. On reflection, that house wasn’t right so we didn’t make an offer at all. 

We did view another house though. This one seemed way overpriced based on the area and Rightmove photos, but we wanted to see anyway. It’s a lovely house, but still seems overpriced. Prices in the area haven’t risen very much at all, though houses are selling fairly quickly - generally within a couple of months. The house next door is identical, but has one extra bedroom and is in great condition - it sold 18 months ago for 45k less than asking on this house. The one the other side sold in November for 10k less than this asking, it has one extra reception room, 2 extra bedrooms, an extra bathroom, a conservatory and a bigger garden, it’s also immaculate. 

The one we viewed was originally a 4 bed, but they lost a bedroom by extending the master bedroom (not quite a dressing room, more an archway into an area they were intending to put fitted wardrobes in, but is currently an unfinished area), the windows are single glazed with rotten wooden frames, the guttering is in terrible condition, the front and back doors have missing glass, the fascia is rotten, the roof has a lot of missing tiles and the garage roof has fallen through. So it’s far from perfect, but priced higher than near perfect houses close by. It’s been on the market for 9 months, sellers had an offer accepted on the house they want back in October, so are wanting to sell quickly according to the agent). 

Anyway, we put in an offer which was low (somewhere between what the houses either side went for), but the agent seemed quite excited about it. We’re cash buyers with no chain, so can move fast etc. We heard nothing for 2 days, then received a call today from the agent simply saying they’d rejected the offer. No counter offer, just a rejection. We just thanked him anyway and said goodbye, but there seemed to be an odd hesitation from him. I assumed we’d offered too low and they’d decided not to engage further with us, but now I’m wondering if we were supposed to make a higher offer at that point? 

Sorry for the long post and probably stupid question, in case it’s not already clear, we’ve no real clue what we’re doing. 

AdrianC

Do you want to make a higher offer? If so, do.

If not, time to keep looking.

The seller thinks it's worth more than your offer. Perhaps they're deluded, and it'll stay on the market for ages.

greatcrested

So you can

* move on and find another property

* increase your offer

* and/or tell the EA your original offer remains on the the table in case the seller changes their mind (eg receives no other offers)

How would you feel if you heard the property sold for, say, a couply of K more and you'd missed out? Pleased not to have overpaid? Gutted to have missed it?

eddddy

HeidiBoBeidi said:

Anyway, we put in an offer which was low (somewhere between what the houses either side went for), but the agent seemed quite excited about it.
...
I assumed we’d offered too low and they’d decided not to engage further with us, but now I’m wondering if we were supposed to make a higher offer at that point? 

The EA is a salesperson - and if they're good at their job, they'll be using carefully thought through selling strategies on you.

For example, the EA gets excited when you make an offer, in order to make you more excited and raise your hopes. So that, if your offer is rejected, you're more likely to increase your offer.

And the EA will have a strategy for dealing with offer rejections. For example, it might be to leave the prospective buyer to agonise for 48 hours - then phone and offer them a glimmer of hope, if they can increase their offer a a tiny bit more...

... and then increase their offer another tiny bit more
... and then increase their offer another tiny bit more
etc, etc


It's all a game. Perhaps the best solution is to decide what you want to pay, and offer it - and don't get sucked into the games. Or maybe devise your own strategy.

macman

The EA is not remotely bothered whether the houses sells for £xK or £xK+/-£5K. Their difference in commission on that is £50. Their only concern is to get a buyer and a seller to a point of agreement in the shortest possible timescale.

AnotherJoe

macman said:

The EA is not remotely bothered whether the houses sells for £xK or £xK+/-£5K. Their difference in commission on that is £50. Their only concern is to get a buyer and a seller to a point of agreement in the shortest possible timescale.

That's true but they may need to walk an offer up to a price the vendor will accept. 

Though as the OP describes this place it sounds like one if those Homes Under the Hammer projects that ends up a year late and £50k over budget. 

tim_london

On the negotiation side:  Full rejection on first offer is common tactic - it weeds out absolute low rollers and makes you want to offer nearer to how much you want to pay for it.  The fact that you are cash buyer means the actual value of the property is less of a concern as you do not need valuation approval for a mortgage.  In terms of negotiation, you can go back in with an absolutely small increase (like £2-5k) - and say something like I appreciate that the first offer is rejected, but I am happy to negotiate but I need to vendor to be willing discuss options i.e. via a counter offer... (then reiterate you're a cash buyer and can move fast).
If the second offer is rejected with no counter-offer then you're probably dealing with a deluded seller.

On the home though:  From what you typed I don't understand why you'd put in an offer anyway.  You've inherited some money, great!  But refurbishing a bad condition house isn't just a 'it'll cost xxx', there's time, money, stress and mistakes.  Then on top of that you're dealing with deluded sellers who thinks the buyer can just patch it up with duck tape or that you're a builder with is trying to flip a quick profit so they'll put up a fight to eat into your lunch.  Why not just buy one in good condition?

macman

Why all this indignation about offers too low, rejections coming back?

I've never bought or sold a property where negotiation was not part of the process. No different to buying any big ticket item, such as a car.

if your first offer is not rejected, you are bidding too high.

lookstraightahead

What percentage under their asking price have you gone? Any other info like can they actually afford to accept less? What is the floor space of the other properties (I could make 10 rooms out of my living room if they were a couple of square feet each).

FreeBear

tim_london said:  But refurbishing a bad condition house isn't just a 'it'll cost xxx', there's time, money, stress and mistakes.

If it has been neglected for any length of time, there will be a load of horrors waiting to be uncovered. Missing tiles could very easily turn in to rotting roof trusses and ceilings falling down - This place could be a real money pit, and not one to take on lightly. Certainly not to be entertained without a full and comprehensive survey.

moneysavinghero

The vendors want more for their dilapidated house than similar houses on the same street in perfect condition.
House has not sold for 9 months.
Vendors have found a house they want to buy (possibly they will need to achieve full asking price to be able to afford this house)

All reasons to walk away for me.