First time buyer - first offer rejected advice needed

BarleyN19

My partner and I are first time buyers currently renting. We have found a house we love and put in an offer which was rejected. 

Context - house is up for £175,000. We put an offer in at £165,000. 

After speaking with the estate agents, he said that the vendor hasn't given an exact figure they would take but he thinks they are looking at least £170,000. 

I am unsure what follow up offer to make? Also how long to wait to tell them, do I let them stew a little? 

MultiFuelBurner

Depends how much you like the property.

What can you actually afford?

Gavin83

There isn't a right answer to this and it mostly depends on how risk adverse you are. The EA is essentially giving you a hint that £170k would secure you the house. If you really want the house and don't wish to play games then offer that.

If you want it for less then stick to your current offer, hope no one else attempts to buy and that in a few weeks the vendor revisits your offer. The obvious risk with this is someone else comes along and offers £170k, they accept and you lose the option of buying the property.

The question to ask yourself is this; if you stick to your current offer and you lose the house will you be disappointed you didn't offer more? If the answer is yes then you should probably offer more. When we bought we put in an above asking price offer on a house we really liked but someone still beat our offer by another £30k on top of that. I wouldn't have wished to pay another £30k so I'm happy we let the house go. Had it been another £5k I might have been a little more upset.

BarleyN19

MultiFuelBurner said:

Depends how much you like the property.

What can you actually afford?

We can afford the £175k but that's stretching out budget higher than we wanted. 
We would ideally want to pay no higher than £170k. 

Sunsaru

BarleyN19 said:

MultiFuelBurner said:

Depends how much you like the property.

What can you actually afford?

We can afford the £175k but that's stretching out budget higher than we wanted. 
We would ideally want to pay no higher than £170k. 

Then go for it.

gazfocus

I have learnt the hard way to not tell the estate agents (as a seller) what we would be happy to accept haha.

We put our house up for offers over £280k (the estate agents we went with due to their reputation, only do 'offers over'). The estate agent asked us on day one, 'would you sell for £281k?' to which we said yes we'd be satisfied with that. Fast forward to actually getting offers in, we had 3 offers at asking price and 2 at £281k. The estate agent was unwilling to go back to the prospective buyers to try and get a higher offer because we'd previously said we'd be satisfied at £281k and there were 2 offers at £281k. Fast forward to today and comparable houses are selling for £300k+.

Even now I feel really annoyed at it to the point that I decided a few weeks back that if anything else came up we'd refuse to pay for it (having already agreed to have a couple of thousand pounds worth of work done at the buyers request).

So, it doesn't surprise me if the sellers haven't given any indication to the EA about how much they would accept but as @Gavin83 said, you need to decide what the house is worth to you and whether you'd be happy walking away from it for the sake of an extra £5k or so.

BarleyN19

Gavin83 said:

There isn't a right answer to this and it mostly depends on how risk adverse you are. The EA is essentially giving you a hint that £170k would secure you the house. If you really want the house and don't wish to play games then offer that.

If you want it for less then stick to your current offer, hope no one else attempts to buy and that in a few weeks the vendor revisits your offer. The obvious risk with this is someone else comes along and offers £170k, they accept and you lose the option of buying the property.

The question to ask yourself is this; if you stick to your current offer and you lose the house will you be disappointed you didn't offer more? If the answer is yes then you should probably offer more. When we bought we put in an above asking price offer on a house we really liked but someone still beat our offer by another £30k on top of that. I wouldn't have wished to pay another £30k so I'm happy we let the house go. Had it been another £5k I might have been a little more upset.

We were questioning whether to go back in with an offer of £168,500 or just jump in with £170k.

MultiFuelBurner

BarleyN19 said:

MultiFuelBurner said:

Depends how much you like the property.

What can you actually afford?

We can afford the £175k but that's stretching out budget higher than we wanted. 
We would ideally want to pay no higher than £170k. 

Probably best to be honest with the EA and say the max you can go to is £170k and no more. 

LicoriceStick

If you really like the house and would be gutted to miss out I'd meet halfway and offer 170k.

Gavin83

gazfocus said:

I have learnt the hard way to not tell the estate agents (as a seller) what we would be happy to accept haha.

We put our house up for offers over £280k (the estate agents we went with due to their reputation, only do 'offers over'). The estate agent asked us on day one, 'would you sell for £281k?' to which we said yes we'd be satisfied with that. Fast forward to actually getting offers in, we had 3 offers at asking price and 2 at £281k. The estate agent was unwilling to go back to the prospective buyers to try and get a higher offer because we'd previously said we'd be satisfied at £281k and there were 2 offers at £281k. Fast forward to today and comparable houses are selling for £300k+.

Even now I feel really annoyed at it to the point that I decided a few weeks back that if anything else came up we'd refuse to pay for it (having already agreed to have a couple of thousand pounds worth of work done at the buyers request).

So, it doesn't surprise me if the sellers haven't given any indication to the EA about how much they would accept but as @Gavin83 said, you need to decide what the house is worth to you and whether you'd be happy walking away from it for the sake of an extra £5k or so.

Although the EAs work for the vendor they'll only do so while carrying out the least work. They're unlikely to put in a lot of effort to get you a better price if they won't benefit from it, it's easier for them if you just accept a current offer.

I think you've likely been a bit of a pushover though. With 3 asking price offers and 2 just over asking prices offers I'd have been pushing for them to do a best and final, probably with the caveat that after some research you don't believe £281k is enough.

The other option is to make it worth their while to increase the price. Bribe them. Say that if they can achieve a price of £300k+ for you then you'll give them an £X bonus or something along those lines. I bet the offers would soon shoot up then. There is of course the risk that if they don't find a buyer willing to offer £300k they might not put any offers forward to you at all.

At the very least I wouldn't be entirely honest with EAs. They aren't honest with you so I would return the favour.