Lack of negotiation but still want the house...

toellandback

Hi all

I'm new here but hoping someone may be able to offer some perspective for me (apologies for the length of the post). For context my partner and I are FTBs, very fortunate to have a gifted loan/deposit from my parents (£75k), are looking at purchasing for around £300k as we know we can get a good initial fixed interest rate with a 75% LTV. We've had 2 AIPs for £325k and have good stable jobs so confident that £300k is a reasonable benchmark.

We have viewed (once) and kind of fallen in love with a 3 bed terrace in basically the location of our dreams. The decor is pretty faded so it would need a good few grand of redecoration costs thrown in immediately to spruce it up a bit. The owner purchased the house in 2006 for £200k and has rented it out the whole time (a nice little money earner) and has done zero cosmetic renovations in that time - it looks exactly the same as it did when the house was listed for sale in 2006. However being a rental property the boiler has been regularly serviced and on the face of it looks clean and well cared for.

It's been listed since September 2020 for £325k, with no offers, so would suggest it's overpriced for the market (which sadly is a perpetual seller's market as it is a desirable area). We put in an offer of £292.5k, were instantly rejected and asked if we would consider increasing our offer (I know we shouldn't bid against ourselves but we were just kind of testing the waters with a 10% below asking price offer...). We backed our offer up with our plus points (FTBs, finances in place, surveyor conveyancer and mortgage adviser lined up etc) and our reasons for thinking the property is worth less than the asking price (we were relatively polite but ultimately it's not someone's cherished family home so I assume they won't be offended by me pointing out that the carpets are 15+ years old, for example)...

Anyway we increased our offer to £297.5k, which was rejected (all we got back from the EA is basically that the seller "feels that is too low at this point"), so we went back and said our absolute maximum is £300k and if the seller won't accept that then we'll have to look elsewhere (empty threat really as we do want this house...). That was also rejected. They have also now reduced the guide price to £315k, so our offer of £300k is only 5% below asking and I would have thought a reasonable place to begin negotiations but they seem completely unwilling to counter offer or give anything back besides "it's not enough". It seems they are holding out hope for further interest and unwilling to settle for less than the asking price (or whatever price they actually have in their minds...)

I can appreciate they want to get the highest price they can but equally if it's been on the market for 4 months and you're just batting away the only offer you receive then can you really expect to sell? I have my theories about the seller and their thought process but ultimately don't know them from Adam (or Eve).

I guess my general questions are:
1. Should I hold out hope that the seller might change their mind if they receive no other offers in the few weeks after reducing the price and comes back to us a bit more willing to negotiate? They seem in no hurry and no particular desperation to sell.
2. Should we swallow our pride and increase our offer? We think we could stretch to c£309k but this would mean more of our savings going into deposit and stamp duty so less money to spend on redecorating... If so, how long should we wait, just in case the seller does come back on our last offer of £300k (don't want to lose £9k for nothing...)
3. Should we go back to the EA and say we are still interested in the property but would the seller be willing to propose a counteroffer so we may be able to agree a sale price? Would be interested to see how much they would be willing to go down if at all.
4. Has anybody had any similar success stories with a 'stubborn' buyer? I understand markets change all the time but are they reasonable (or stubborn) to expect to achieve a c58% value increase in the 15 years they've owned the property (in admittedly a desirable location as I say, but no obvious "value" added in terms of the decor / presentation, same kitchen and bathroom etc...)
5. Is it possible the seller is anticipating that a survey might reveal £Xk of urgent work that needs doing (like rewiring or something), that's maybe £10k for example so they're trying to insure themselves against the possibility of the buyer reducing their offer post-survey (so say £300-305k isn't far off the mark of what they would accept). The house was built around 1910 I believe and the EAs don't seem to know exactly when the wiring / boiler / pipes etc were last replaced, though they think around 20 years ago, so I feel it's possible these may be on their last legs.

I hope it doesn't sound like we are being stingy. I don't think £315k is far off it's value if I'm honest (subject to survey and valuation etc obviously, just based on the size / condition / location) but obviously we would be spend as little as possible and £300k was always our kind of benchmark. 

Any advice / thoughts / similar case studies would be very much welcome.

Thanks

moneysavinghero

Are there still tenants in place, or have they long gone now?

[Deleted User]

The problem you've made for yourself is that you told them your absolute maximum is £300k, having increased the offer twice. That approach only works if it really is your absolute maximum.

They're almost certainly expecting you to come back again with an 'above-maximum offer', and once you do will rightly figure they'll get at least another two offers out of you.

You might want to sit back for a respectable amount of time and pretend that you got an unexpected bonus at work, and then put in your absolute, but real, maximum bid.

toellandback

moneysavinghero said:

Are there still tenants in place, or have they long gone now?

Sorry should have mentioned - the tenants moved out around October, so property is unoccupied.

Also agree zx81 (sorry not sure how to reply to your message), they seem to just be prepared to sit back and wait for us to come back with more, only all the waiting around is driving me crazy!! Part of me thinks I'd rather just overpay now to stop having to stress about it, but I know ultimately that's dumb.

FTB_Help

There was probably a little slow down in the market around the end of the yr due to tier 2/3/4....

And then Xmas and stamp duty holiday ending soon, im guessing there probably wasnt as much interest as there was during the summer.

That said, it doesn't sound like they're in a mssive rush to sell as they've turnt your offers down and not come back with a counter offer.

Honestly if you really want this place then i suggest go in with your max offer, if in a few weeks time someone else comes in a gets it for 309k you would be kicking yourself.

Tell them your parents have just loaned you some cash and this is your final offer but really mean it otherwise they'll think you're taking the p, by coming back with final offers but then upping it again

AnotherJoe

I'd say you are overthinking this. What they paid for it 15 years ago is particularly irrelevant. Whether it was a "nice little earner" is irrelevant. 

Whether the vendor is trying to pad the price for future works doesn't matter.

All that matters is, what is the going rate NOW and what is their bottom line. 

And it may be they are just one of those sellers who is unrealistic about the price, and will hang on.
the other issue is, you've said £300k is your max so how do you up your bid without losing credibility? 
in one sentence you say it's not worth the money t and in another you'd pay it, in which case it IS worth that much even if only to you. 

Good luck ! 

eddddy

Is it a "conventional" EA who gets paid on completion?

If so, "make friends" with them and have a friendly discussion with them about the sellers and the property.  The EA wants the property to be sold, so they get their commission - and the EA won't care much whether it sells for £300k or £309k or £315k - so they'll probably help you with some useful pointers.

Ask the EA questions like "If I leave the £300k offer on the table for a week or two are they likely to accept it, or should I walk away now" and "What's the minimum offer you think the seller will accept at this stage?"

But when listening to what the EA says, bear in mind that the EA will be simultaneously trying to persuade you to increase your offer, and persuade the seller to accept your current offer - or persuade both of you to compromise and meet in the middle. Their goal is simply to get a sale.


Edit to add...
And I wouldn't worry to much about saying "£300k is my absolute maximum offer", then when it's rejected, finding an excuse to offer more.

The EA will probably just tell their client, that they are such marvellous negotiators, they've persuaded you to offer a bit more.

Thrugelmir

Are you willing to go higher than £300k. Nothing else is relevant. 

robatwork

I'm afraid you've failed at the game of negotiation.

The idea is:
Offer X
No
Offer Y
No
Offer Z as your Full and Final bid, being clear if it's rejected although it remains on the table, you are looking elsewhere.
Don't offer Z+9
See whose nerve goes first, or if you are outbid. If so, just move on.

Of course, if it's worth £309k to you and you'd be devastated if someone else bought it for that, then offer that.

toellandback

Thank you all for the responses.

To be honest I'd be kicking myself if I lost it for £309k to someone else, but I'd also be mad if I overpaid £9k when they may have come around to my last offer if I'd just waited a few weeks... Who knows.

I'm thinking about going back to the EA and asking if the seller is willing to propose a counter offer to see if we can meet somewhere in the middle (hopefully £309k.....)

Racky_Roo

I don't think it being listed for 4 months on a dated property is a long time bearing in mind we've been in lockdown/Christmas/end of stamp duty for most of that time. My property which I sold in July (peak selling time after lockdown 1) was on for 6 weeks before I got an asking price offer. Most houses are going for asking price or very close to in a lot of areas, so to get it for £310k, when it was on at £325k is still pretty good going.

You haven't mentioned what similar properties have sold for in the area, have you looked at those prices and compared?

Remember, if it is overpriced, your valuation will pick it up and you can always attempt to renegotiate