Offering under asking price

kisaki757

TheJP said:

From looking at your previous posts you state you wont pay more than 70% on the asking price. Going to be a long slogg for you i think.

No, sorry, never said that or never meant to if that's what it came across as. What I said is for that one particular property I wouldn't offer more that 70% of MY TOTAL possible borrowing amount. I.e. my maximum budget is X and for that one house I wouldn't pay more than 70% of X.That's not 70% of their asking price.

Even I am not crazy enough to think I can get a house at 30% off in this market And I think even the 17% off is a stretch but like I said, in that case I think their asking price is way over others in the area...

Crashy_Time

TheJP said:

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.

There is a big difference between 17% and 30%, and I specifically said that trying for more than 20% right now probably won`t work. Have a look on RM with PL, there are loads of price reductions going on all the time.

Scotbot

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?

Don't be too sure about that. If the vendor has instructed the EA that they won't accept an offer below a certain value he can reject the offer without consulting with them then tell the vendor later. Most vendors will as for feedback. In this curreng market 10% below is very ambitious and  17% is never going to be considered when the vendor has had a higher offer and almost certainly. needs more to fund their next property 

Hedgepigs

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.

Assuming they are buying to live in, I'd have said OP's job is actually to secure a house they are going to enjoy long term, at a price that is affordable to them.

It's a home first and foremost. If it turns out to be a good investment too, then great. But I'd rather pay a little too much on a place that makes me happy, than saving a few thousand buying a house just because I thought it was cheap.

Crashy_Time

Hedgepigs said:

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.

Assuming they are buying to live in, I'd have said OP's job is actually to secure a house they are going to enjoy long term, at a price that is affordable to them.

It's a home first and foremost. If it turns out to be a good investment too, then great. But I'd rather pay a little too much on a place that makes me happy, than saving a few thousand buying a house just because I thought it was cheap.

That sounds fair in a market that represents some value, not in the biggest property bubble in history though, people buying now have to try and offset potential rate rise effects if they can IMO.

TheJP

kisaki757 said:

TheJP said:

From looking at your previous posts you state you wont pay more than 70% on the asking price. Going to be a long slogg for you i think.

No, sorry, never said that or never meant to if that's what it came across as. What I said is for that one particular property I wouldn't offer more that 70% of MY TOTAL possible borrowing amount. I.e. my maximum budget is X and for that one house I wouldn't pay more than 70% of X.That's not 70% of their asking price.

Even I am not crazy enough to think I can get a house at 30% off in this market And I think even the 17% off is a stretch but like I said, in that case I think their asking price is way over others in the area...

I am currently looking at properties but I am not necessarily willing to pay the whole amount of X for all of them. For some, I would pay no more than 70% of x for example.

Pretty clear cut to me that you would only pay 70% of what the house is marketed at. Maybe you need to reflect your search in line with your budget or what your willing to pay.

aoleks

as a first time buyer who completed 3 weeks back, I can only say:

1. being a FTB doesn't mean you're quicker, you have no clue about the process. I would be much quicker now, having gone through the process, as opposed to you, despite needing to sell my house first.

2. in the current market, you must be happy not to pay OVER asking price. discounts are possible if you're flexible and looking at the right property, but even then, 10% would be the max, unless the property is stupidly priced.

olbas_oil

They are legally obliged to relay offers to the owner. The only way to get around it is to discourage you from making an official offer. 

Is that always true? How does it work in these circumstances:
1) The owner has asked the agent not to bother them with silly offers (X% below asking)
2) The house is marked as SSTC. Can a frustrated buyer put in a revised offer, and would the agent have to pass that on? If so it makes a mockery of the 'best and final' process.

user1977

olbas_oil said:

They are legally obliged to relay offers to the owner. The only way to get around it is to discourage you from making an official offer. 

Is that always true? How does it work in these circumstances:
1) The owner has asked the agent not to bother them with silly offers (X% below asking)
2) The house is marked as SSTC. Can a frustrated buyer put in a revised offer, and would the agent have to pass that on? If so it makes a mockery of the 'best and final' process.

It's up to whatever has been agreed between the agent and their client. In practice, buyers aren't going to know that, so the adage that "the agent has to pass on the offer" is pretty academic.

eddddy

olbas_oil said:

They are legally obliged to relay offers to the owner. The only way to get around it is to discourage you from making an official offer. 

Is that always true? How does it work in these circumstances:
1) The owner has asked the agent not to bother them with silly offers (X% below asking)
2) The house is marked as SSTC. Can a frustrated buyer put in a revised offer, and would the agent have to pass that on? If so it makes a mockery of the 'best and final' process.

Here's the relevant extract from the legislation:

2.  The failure by an estate agent to forward to his client promptly and in writing accurate details (other than those of a description which the client has indicated in writing he does not wish to receive) of any offer the estate agent has received from a prospective purchaser in respect of an interest in the land.

Link: https://www.legislation.gov.uk/uksi/1991/1032/schedule/3/made

The Property Ombudsman's mandatory code of practice for members expresses it like this:

9a By law, you must tell sellers as soon as is reasonably possible about all offers that you receive at any time until contracts have been exchanged unless the offer is an amount or type which the seller has specifically instructed you, in writing, not to pass on. You must confirm each offer in writing to the seller, and to the buyer who made it, within 2 working days.

Link: https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

So if a seller has told the EA in writing that they...

• don't want offers below a value
• don't want offers from non-proceedable buyers
• don't want offers after the the property is SSTC
• don't want offers from buyers who don't agree to paying a buyer's fee (i.e. a few dodgy EAs)

... then that's fine.

But some EAs might 'hide' those types of terms in amongst other t&cs that a seller signs.

If a seller makes an offer verbally, a dodgy EA might later claim that they didn't think it was an offer, just a discussion about making an offer etc.

So perhaps it's best to always make/confirm offers in writing - e.g. an email.