5% deposit a good idea?

Crashy_Time

RoisinDove said:

Persian_DG said:

RoisinDove said:

I would imagine they may accept an offer 5-10K below asking price but surely not much more than that? I'm a first time buyer with no chain but I imagine most potential buyers of one-bed flats would be in the same position. So if I saw something at 300K, I think I could maybe get it for 290K if they knew they'd have a quick sale, but there's only so low they'd go, IMO. I have a few friends who have recently bought London flats and they all had to go over the asking price!

I'm curious why you think it might be limited to 5k - 10k?  I think you're right that any seller has a limit as to how low they would go but my belief is that each seller has a different unique set of circumstances that will dictate that. For some £5k may be the absolute limit that they could drop but for others a higher drop mixed with enthusiastic first time buyer pro's could actually pursued them to sell. Obviously the state of the market and interest in any property will have an effect too as will many other factors! 

I love negotiation! it's probably down to my roots / upbringing but I love the challenge haha I think you may surprise yourself if you go in to negotiations with some good optimism, open mind and desire to get info

I mean...demand? Why would anyone be motivated to drop the price when they have plenty of people interested? Anywhere I've viewed that I considered nice has been sold within a few days....I've had viewings lined up and the estate agent has called to tell me the viewing is cancelled because the property is under offer. I would have thought there would be a much better chance if the place had been sitting on the market for ages or if there were loads of flats on sale in the area. Happy to be proven wrong though if you have any advice!

Can you link to some of these areas so we can have a look with PropertyLog?

Crashy_Time

seradane said:

RoisinDove said:

Persian_DG said:

RoisinDove said:

Persian_DG said:

@RoisinDove Could a good negotiation and a catalogue of suitable properties not resolve some of your problem? I keep reading that everywhere is non negotiable at the moment but being the eternal optimist, i'd like to think differently! And if you did go for the "future proof" Family type home then could a good negotiation and a lodger not potentially open things up / give an easier outlook?

I'm not sure what you mean tbh. A family home is out of the question. We're talking the difference between small flats...whether it's worth stretching myself to buy a two bed flat with a spare bedroom for a home office (which would probably also mean compromising on the area) or to just get a small one-bed and deal with it.  I feel like the two bed flat would be 'future proofing' as much as I can, and probably the better idea of the two. I would not want a lodger but it could work for a potential future partner to move into...I find one bed flats very small when there's two people, and it would be stifling if both were working from home in one!

Apologies, maybe I misunderstood about the family thing, thought I had read it somewhere. I suppose my my point or question is, is there anything that you do like just out of reach that could actually be negotiated down to a level that you could purchase?

I would imagine they may accept an offer 5-10K below asking price but surely not much more than that? I'm a first time buyer with no chain but I imagine most potential buyers of one-bed flats would be in the same position. So if I saw something at 300K, I think I could maybe get it for 290K if they knew they'd have a quick sale, but there's only so low they'd go, IMO. I have a few friends who have recently bought London flats and they all had to go over the asking price!

Up to about 10% below asking is generally about as low as you can go without being cheeky or having good reason, so on a £300k property you could offer £270k. Of course, likely most will come back with a no and you'll have to meet in the middle, but, say, 5% under asking is pretty normal final agreed price in the scheme of things.

For a lot of sales it will boil down to what the bank wants to lend, the amount that a seller considers "cheeky" isn`t really relevant unless the seller can get a cash buyer to overpay or doesn`t really need to sell.

Persian_DG

RoisinDove said:

Persian_DG said:

RoisinDove said:

I would imagine they may accept an offer 5-10K below asking price but surely not much more than that? I'm a first time buyer with no chain but I imagine most potential buyers of one-bed flats would be in the same position. So if I saw something at 300K, I think I could maybe get it for 290K if they knew they'd have a quick sale, but there's only so low they'd go, IMO. I have a few friends who have recently bought London flats and they all had to go over the asking price!

I'm curious why you think it might be limited to 5k - 10k?  I think you're right that any seller has a limit as to how low they would go but my belief is that each seller has a different unique set of circumstances that will dictate that. For some £5k may be the absolute limit that they could drop but for others a higher drop mixed with enthusiastic first time buyer pro's could actually pursued them to sell. Obviously the state of the market and interest in any property will have an effect too as will many other factors! 

I love negotiation! it's probably down to my roots / upbringing but I love the challenge haha I think you may surprise yourself if you go in to negotiations with some good optimism, open mind and desire to get info

I mean...demand? Why would anyone be motivated to drop the price when they have plenty of people interested? Anywhere I've viewed that I considered nice has been sold within a few days....I've had viewings lined up and the estate agent has called to tell me the viewing is cancelled because the property is under offer. I would have thought there would be a much better chance if the place had been sitting on the market for ages or if there were loads of flats on sale in the area. Happy to be proven wrong though if you have any advice!

Of course, demand is a huge factor. Admittedly I do not know the area you're in so could not comment on the state of the supply / demand. However, this SD holiday seems to be an anomaly and it will be interesting in seeing if and how things adjust after this period is at a complete close. At the moment, people can absorb the extra cost (based on the idea house prices have risen because of it) because it effectively becomes part of the mortgage for those that are mortgaging. When people are then required to factor in SD at full rate again, this could change things a lot. It may even cause current transactions / purchases to cease which may then swing to more supply than demand?

You're right though, the longer a property is on, the more the mind of the seller becomes a positive factor for a buyer. If Sellers are having to wait no longer than a few days before receiving asking price (or even more!) then, buyers have to either stand aside or pay up.

If the need is to purchase now then maybe your only option is to be a part of bidding wars however, some biding of time might just pay dividends. I note your dissatisfaction at renting so maybe this will be what forces your hand? But then maybe a few extra months sacrifice by way of renting may just swing your longer term buying position to a better one? 

Happy to help! I dropped you a PM if you ever wanted a sounding board.

Crashy_Time

Getting_greyer said:

RoisinDove said:

Crashy_Time said:

RoisinDove said:

Crashy_Time said:

RoisinDove said:

Crashy_Time said:

RoisinDove said:

Angela_D_3 said:

RoisinDove said:

moneysavinghero said:

House prices are going up because everyone is having the same thoughts as you - they must buy a house now or they are going to miss out because prices keep rising so they join in the 'i will buy something i am not such i can afford' game. This is a self-fuelling and is how bubbles form. It can't last for ever and must at least cool down if not pop (crashy has his fingers crossed) at some point.

But it hasn't yet, which is what people laugh at Crashy for, surely? I would actually prefer to wait and buy some time to think and see how life is as the pandemic winds down but other people are warning me that I could end up getting priced out by doing that. I'm not going to be able to save much much while renting...I've got a good deal now which allows me to save loads but I won't have it after July

Similarly i would like to buy before the summer as we jumped into a flat thinking wed be here 8 ish weeks.  Itll be nearer 4 months when all said and done.  I can almost guarantee that the market will crash the week after ive completed such is my luck,  but,  its still cheaper than rent and i can pay it off in 10 years.
im slightly biased in that i cannot bear renting though.  

I can't bear renting either. It's not just the money, it's all of it. Getting treated like rubbish by landlord, things not getting fixed for weeks on end, inspections every 6 months, not being able to paint the walls or make it feel like home, not knowing how long you can stay there...it's just awful. I've had enough.

Being trapped in a one bed flat that you can`t sell and don`t like any more with negative equity will be worse, rents in London are falling, get a new landlord IMO, or move out of London.

I don't see how either of these things will help. I have literally never had a good landlord, in or out of London. 

Interesting, I have only had good landlords, one guy even came round to my new flat (after I had said that his was too expensive and I needed to move somewhere cheaper) and gave me a tenner because I had left about that amount on the card payment electric meter. You need to build your cash pile to the point that landlords are chasing you for a taste, and stop putting up with nonsense from agents, a good thing to do is just tell the landlord that you love the property but the agent`s checks etc. are making you want to leave, that tends to get the agents in line because they are basically just a parasite feeding on the landlords cash flow.

Why would a landlord care how much I have in the bank? I could buy my own flat tomorrow if I wanted to...so what? I left my last place because it had a mice infestation, damp and mould, and it was rented for the same price within a week. And this was during the last year when there's supposedly a surplus of rental flats. If you live in a desirable area, there will always be more renters. 

But you started a thread about not being able to afford a one bedroom flat?

I can't afford the one bed flat I want in the area I want. Of course I can afford to buy *a* flat. I don't see what that has to do with anything at all. Your example about a landlord coming round to give you a tenner was a man who felt sorry for you because you had to move somewhere cheaper - exactly the opposite of what you think about being treated better if you have money. 

Because according to crashy anyone that buys a house will always have overpaid. Or at the very least will find themselves in hardship when rates go up etc.  There is of course contrasting views that renting is dead money and always the worst option no matter what.

Just like a hypothetical increase in mortgage costs in the future, renting may cost you extra now.  However only you can judge wether the value you get from that cost is worth it.

Do you think buying a flat in London just now with a 5% deposit is a good idea?