Cash Buyer - how much lower to offer?

goodwithsaving

caprikid1 said:

"I don't see low offers as rude - a two letter reply doesn't waste much time - but offering significantly low is more likely to get a flat rejection than open a negotiation if that is what you want to do. "
Exactly this, if it is a take it or leave it offer great, if it's a property you really want a low offer could carry many negative connotations 

If someone made me a low offer, I would take it as insulting and probably (situation dependent) refuse to entertain any more offers from that buyer, because I would be concerned about being gazundered close to exchange.

Crashy_Time

lookstraightahead said:

Any valuation at the moment is pie in the sky so the most realistic one is what you are willing to pay.

it sounds like the seller thinks they can ask for anything and probably expect it, so I think unlikely to come down,

but I still wouldn't offer what they're asking - just stick to your guns and walk away if they say no.

Great advice.

Crashy_Time

AdrianC said:

What it sold for a little while back is irrelevant. How does the current price compare to what else's on the market now?

The Zoopla wet-finger is irrelevant. Again, how does the current price compare to what else's on the market now?

How you're funding your purchase is irrelevant. It simply does not affect the purchase process unless the property is likely to be refused as security by lenders, or unless you're sailing to close to your maximum affordability that a potential downvaluation makes it unaffordable for you.

When you say "second home", you are taking the +3% SDLT into account? Again, not the vendor's problem. But if they care about their community, they may well prefer it to remain an actual home rather than being mostly empty. Or, instead of a "second home" for you, do you mean it's a BtL? How's the net post-tax yield work at the asking?

It becomes very relevant if mortgage rates start rising.

MysteryMe

Being a cash buyer has good and downsides as far the vendor will be concerned so TBH it's not something that entitles to an automatic discount.
You may know what they paid for it,  but have you done all the other research required to establish whether that purchase price was the going rate back then or what may have prompted a larger rise in value than expected?  For all you know your vendor may just have got a great deal, perhaps their vendor needed a quick sale etc. Or the property needed work and the price they paid reflected that.  Not everything is visible, have you actually asked what work has been done by the vendors? Maybe the local schools has improved, maybe a new road or transport hub has opened to make the area more desirable. There are a myriad of reasons why property may have increased in value.  And if they really have done nothing but change the carpets but the property market in that area has risen sharply then that's the vendor's good fortune and their business. 
Always best to use relevant information that you know the full context of. Compare it with similar sold properties in the vicinity in 2021, if it's in the ballpark then make your offer accordingly. It is does compare badly and is hanging around whilst other houses nearby are selling at least you are sounding more credible by making a much lower offer than just saying "but you only paid X amount 3 yeas ago" 

calligraphysenior

Crashy_Time said:

lookstraightahead said:

Any valuation at the moment is pie in the sky so the most realistic one is what you are willing to pay.

it sounds like the seller thinks they can ask for anything and probably expect it, so I think unlikely to come down,

but I still wouldn't offer what they're asking - just stick to your guns and walk away if they say no.

Great advice.

This is what I did. Made a final offer, walked away. I've now made an offer on another property I had my eye on, they are not getting back to me at all!

Crashy_Time

MysteryMe said:

Being a cash buyer has good and downsides as far the vendor will be concerned so TBH it's not something that entitles to an automatic discount.
You may know what they paid for it,  but have you done all the other research required to establish whether that purchase price was the going rate back then or what may have prompted a larger rise in value than expected?  For all you know your vendor may just have got a great deal, perhaps their vendor needed a quick sale etc. Or the property needed work and the price they paid reflected that.  Not everything is visible, have you actually asked what work has been done by the vendors? Maybe the local schools has improved, maybe a new road or transport hub has opened to make the area more desirable. There are a myriad of reasons why property may have increased in value.  And if they really have done nothing but change the carpets but the property market in that area has risen sharply then that's the vendor's good fortune and their business. 
Always best to use relevant information that you know the full context of. Compare it with similar sold properties in the vicinity in 2021, if it's in the ballpark then make your offer accordingly. It is does compare badly and is hanging around whilst other houses nearby are selling at least you are sounding more credible by making a much lower offer than just saying "but you only paid X amount 3 yeas ago" 

Most property has "increased" in value recently because of the Stamp Duty Stunt, if mortgage rates rise a lot of recent buyers will get a hard lesson in debt education.

Crashy_Time

calligraphysenior said:

Crashy_Time said:

lookstraightahead said:

Any valuation at the moment is pie in the sky so the most realistic one is what you are willing to pay.

it sounds like the seller thinks they can ask for anything and probably expect it, so I think unlikely to come down,

but I still wouldn't offer what they're asking - just stick to your guns and walk away if they say no.

Great advice.

This is what I did. Made a final offer, walked away. I've now made an offer on another property I had my eye on, they are not getting back to me at all!

If they don`t snag a buyer during the present sure to be short lived "mania" they might regret that.

Justonemorecupoftea

In my recent experience cash buyers are more likely to mess you around, so it's only really an advantage of time is of the essence or if the property has been over-valued/unlikely to be mortgageable.

Crashy_Time

Or if the property has been "under-valued" and the seller is clinging to the hope that someone will "make up the difference".