Offering under asking price

theoretica

kisaki757 said:

I have two properties I am sort of interested in (not in love with) but I feel both have too high of an asking price.

Think that might be a key point.  People will naturally be willing to pay more for things that they are in love with, and there are enough house hunters around for sellers to price most properties at the 'worth it to someone in love with it' price.  Either you need something you are in love with and think worth the price, or something that nobody is in love with and the seller has become resigned to a lower price. But that will likely take much more than a couple of months on the market, and you will get very used to rejection.

I suggest you keep a table with property details - asking price, your offer, when it eventually sold and what for (which will take a while to come through into public domain). 

Crashy_Time

pinkshoes said:

Regarding the second property, then at 17% below it might mean the vendors couldn't afford their onward property with a price that much lower, so wouldn't be able to afford to accept. 

If you go throwing around low offers on properties that you're not all that interested in then the EA will start to think you're a time waster and you won't be on their list of people they call when something good comes on the market.

We had some people look round our previous property who offered £180k (asking price £220k) and came across as arrogant and they were doing us a favour! They then "upped" it to £190k. We sold it for £220k (3 offers at asking price) and then these low offer people offered £222k, but we turned them down as if they that badly wanted the property they would have offered something more sensible to begin with.

They have to break the news to that seller that their property is also overpriced? What is PropertyLog saying about your area OP?

Crashy_Time

Thrugelmir said:

kisaki757 said:

Thrugelmir said:

kisaki757 said:

Hi, I am a FTB and I need some advice about how to negotiate with EA's

It's not the EA's property. The EA will merely relay your offer to the vendor. The EA's role is to try and bring the parties together to reach an agreed price. 

All the EA wants to do is achieve a sale and as that's what they ultimately get paid for. The price is pretty irrelevant as the commisson on a few thousand pounds is neither here nor there. The EA isn't paid until the sale eventually completes which is some months away. 

Thanks, that was my understanding too! But so far in both cases, the EA hasn't even told the vendor about my offer, they just dismissed it straight out. I realize it's low but that's the whole point of a negotiation: you start low and go up. How can I do that when the other party isn't even aware?

The vendor may have set a bottom line price. The EA is effectively relaying this to you. No one is going to waste time. When there's other productive work to be done. 

 On this one, I made an offer that's 17% lower than the asking price because, first, I feel that the asking price is waaaay too high 

Doesn't matter what you think.

If the house last sold during the SDH it probably does.

Crashy_Time

kisaki757 said:

Hi, I am a FTB and I need some advice about how to negotiate with EA's

I have two properties I am sort of interested in (not in love with) but I feel both have too high of an asking price.

Property A has been on the market since Sept and reduced once in Oct. I made an offer that is about 10% lower than the reduced price. EA immediately told me this is the lowest offer they received so far and won't be accepted. But he never confirmed the owners actually rejected the offer. He strikes me as a bit dodgy...

Property B was previously sold but then the chain collapsed at the last minute. EA says it previously had sold at the asking price (in June) and it's now on the market at the same asking price. The current owners were due to exchange 1 week ago just before the chain collapsed so they are in a big hurry. As I am a FTB, I can move really quickly. On this one, I made an offer that's 17% lower than the asking price because, first, I feel that the asking price is waaaay too high and (I can't believe it sold for that even in June), second, I feel there should be a significant discount for speed. The EA immediately replied that the offer is much too low and that it won't be acceptable to the vendors. He is then suggesting I increase it before informing the vendors.

I won't cry if I lose either of the two properties but still wanted some advice on how this should work: I was under the impression that the EA is required to inform the owners of any offer, no matter how small. I'm not interested in the EA's feedback (since they work on commission) but in what the owners say so I can then adjust my offer accordingly. "Too small" is not enough feedback for a proper negotiation in my view...

Any advice on this or in general?

That puts you in an even stronger position, and sales are way down in most areas so you should be looking at driving hard bargains and protecting yourself from future price shocks by offering 15-20% less than asking IMO.

https://www.plumplot.co.uk/house-prices-by-region.html

Strummer22

Why stop at 20%

Crashy_Time

Because without mortgage rate rises you probably won`t get much more at the moment.

kisaki757

pinkshoes said:

Regarding the second property, then at 17% below it might mean the vendors couldn't afford their onward property with a price that much lower, so wouldn't be able to afford to accept. 

If you go throwing around low offers on properties that you're not all that interested in then the EA will start to think you're a time waster and you won't be on their list of people they call when something good comes on the market.

We had some people look round our previous property who offered £180k (asking price £220k) and came across as arrogant and they were doing us a favour! They then "upped" it to £190k. We sold it for £220k (3 offers at asking price) and then these low offer people offered £222k, but we turned them down as if they that badly wanted the property they would have offered something more sensible to begin with.

Thanks, that makes sense and I hadn't considered that too low of an offer would be unacceptable simply because it would  break the upper chain...

The two EA's involved are really small ones, I've not seen any other properties of interest from them since I started looking 6 months ago so I am not too worried if I get a bad reputation. Plus, regardless what they think of me, I am still the one that has the money and time on my side. But I do get there is a potential emotional element to all of this.

PS: love your signature!

Crashy_Time

kisaki757 said:

pinkshoes said:

Regarding the second property, then at 17% below it might mean the vendors couldn't afford their onward property with a price that much lower, so wouldn't be able to afford to accept. 

If you go throwing around low offers on properties that you're not all that interested in then the EA will start to think you're a time waster and you won't be on their list of people they call when something good comes on the market.

We had some people look round our previous property who offered £180k (asking price £220k) and came across as arrogant and they were doing us a favour! They then "upped" it to £190k. We sold it for £220k (3 offers at asking price) and then these low offer people offered £222k, but we turned them down as if they that badly wanted the property they would have offered something more sensible to begin with.

Thanks, that makes sense and I hadn't considered that too low of an offer would be unacceptable simply because it would  break the upper chain...

The two EA's involved are really small ones, I've not seen any other properties of interest from them since I started looking 6 months ago so I am not too worried if I get a bad reputation. Plus, regardless what they think of me, I am still the one that has the money and time on my side. But I do get there is a potential emotional element to all of this.

PS: love your signature!

Exactly LOL, it is not your job to bail sellers out of their bad borrowing decisions or help them create "chains", your job is to secure the house as cheaply as possible.

Slithery

kisaki757 said:
The two EA's involved are really small ones, I've not seen any other properties of interest from them since I started looking 6 months ago so I am not too worried if I get a bad reputation. Plus, regardless what they think of me, I am still the one that has the money and time on my side.

It doesn't matter how much money you have if the EA's blacklist you for being a time-waster. You do realise that they all talk to each other?

TheJP

Crashy_Time said:

kisaki757 said:

pinkshoes said:

Regarding the second property, then at 17% below it might mean the vendors couldn't afford their onward property with a price that much lower, so wouldn't be able to afford to accept. 

If you go throwing around low offers on properties that you're not all that interested in then the EA will start to think you're a time waster and you won't be on their list of people they call when something good comes on the market.

We had some people look round our previous property who offered £180k (asking price £220k) and came across as arrogant and they were doing us a favour! They then "upped" it to £190k. We sold it for £220k (3 offers at asking price) and then these low offer people offered £222k, but we turned them down as if they that badly wanted the property they would have offered something more sensible to begin with.

Thanks, that makes sense and I hadn't considered that too low of an offer would be unacceptable simply because it would  break the upper chain...

The two EA's involved are really small ones, I've not seen any other properties of interest from them since I started looking 6 months ago so I am not too worried if I get a bad reputation. Plus, regardless what they think of me, I am still the one that has the money and time on my side. But I do get there is a potential emotional element to all of this.

PS: love your signature!

Exactly LOL, it is not your job to bail sellers out of their bad borrowing decisions or help them create "chains", your job is to secure the house as cheaply as possible.

The OP can have all the time on money on their side but trying to get a reduction between 17-30% will mean they will find it hard securing a property.