Negotiating when valuation is below asking price

fackers_2

Only offer what you think it's worth. If you move in and all settled, would you look back and think you wished to have had it cheaper? Only you and you alone can decide due to your individual and specific situation and criteria. 

Always offer less and negotiate up. 

Linton

Depends how much you want that house and can afford to pay the money required to get it.  Having bought 5 andf sold 4 houses in my lifetime I dont remember what the buying and selling prices for 3 of them were.   It no longer matters.

Sarah1Mitty2

Linton said:

Depends how much you want that house and can afford to pay the money required to get it.  Having bought 5 andf sold 4 houses in my lifetime I dont remember what the buying and selling prices for 3 of them were.   It no longer matters.

Years ago it might not have mattered so much, now it is crucial to get the initial debt load as low as possible if buying with mortgage debt, the cheaper you can get the house the better.

simon_or

Linton said:

Depends how much you want that house and can afford to pay the money required to get it.  Having bought 5 andf sold 4 houses in my lifetime I dont remember what the buying and selling prices for 3 of them were.   It no longer matters.

Exactly this. Buying a house to live in is a financial transaction but it's also a lot more than that. If you like the house and end up in hindsight 'overpaying' by a few thousand quic it's not something that you're likely to remember in 10-15 years time.

From how I read your post, it looked like the EA was encouraging you to consider making a lower offer so think about that.

TheJP

bassplayerchris said:

TheJP said:

If that is correct i would consider the validity of the EAs valuation. When i sold my EA wanted to list about £10k lower than what i had valued my property, considering recent similar sales and the additional benefits my house had (parking off road for 4 cars, corner plot etc). My house sold over my asking and was valued at what the buyer paid.

Offer what you feel a) you think the house is worth and b) what you can afford if you really want the house.

The EA has sold multiple houses in the same road so I give them a certain amount of weighting, though bearing in mind the scenarios you are outlining. 

That said I'm trying to deal with the possibility that if I doing a&b upfront the seller has already priced in the fact that they can ask for an increase up to the value they've placed the house at, and unless I offer that straight away (and risk overpaying - from the pov of my mortgage company rather than myself) they are primed to reject the initial offer.

Have the houses the EA have sold comparable to this property and its asking price? It doesn't matter if the EA has sold a lot of houses its what's comparable within the market that counts.

If you had a survey with a valuation carried out would you increase your offer if the surveyor valued it higher? 

After re-reading your post the EA seems like a cowboy, they work on behalf of the seller yet they are peddling you sensitive information. Not your issue but also not someone i would trust to do business with, if you don't get the house i would try and pass this onto the seller.

Sarah1Mitty2

bassplayerchris said:

Hi - 

Currently looking for somewhere to buy and have found a possible house.  The location is okay, but it's in need of a fair amount of work to modernise it. When I arranged the first viewing the estate agent indicated over the phone the price was a little 'soft'.  On my second viewing, the estate agent representing the property showed up to show me around and straight away mentioned 'My valuation was not the same as the asking price', as I was leaving after taking a look around I mentioned that it would be hard to get a mortgage if the mortgage company valuation came back as lower than the asking price, at which point she told me a valuation figure of around £20K less than the asking price, she said the seller lived in a much more expensive town and overestimated the sale price.  

My question really is where I go to from there in terms of negotiation, put in an offer at what I was told was the valuation figure (obviously factoring in that I might not have been told  the truth) ?, make an offer a few K above the figure on the basis that maybe the seller accepts?  I don't want to be in the position that I overpay for the house given the amount of work I'd need to do on it (kitchen/bathroom and recarpet most rooms) and/or experience difficulty because the mortgage companies valuation ends up being lower.

Are you using PropertyLog to see what other sellers are doing?

gazfocus

If I was the seller, I'd be infuriated with the EA trying to encourage buyers to offer lower than asking price for my house. At the end of the day, the EA's job is to get the seller the best price for the house.

In saying that though, the EA has given you an indication of what they think the house is actually worth so I'd offer based on that. As others have said, you can always increase your offer if it's not high enough (and you're willing to pay more).

Sarah1Mitty2

Most EA`s now are just focussing on getting money through their own business, they are not going to tolerate sellers over-pricing.

Gycraig

gazfocus said:

If I was the seller, I'd be infuriated with the EA trying to encourage buyers to offer lower than asking price for my house. At the end of the day, the EA's job is to get the seller the best price for the house.

In saying that though, the EA has given you an indication of what they think the house is actually worth so I'd offer based on that. As others have said, you can always increase your offer if it's not high enough (and you're willing to pay more).

But at the same time there is no point the estate agent getting “big” bids that are gonna fail mortgage affordability over and over again. 

fackers_2

Sarah1Mitty2 said:

Most EA`s now are just focussing on getting money through their own business, they are not going to tolerate sellers over-pricing.

Hungry dogs often turn on their owners in times of desperation. 

EA’s commission is key to cashflow, if they don’t get it they are going to encourage the sale to go through, even if that’s not fully in the best interest of the seller.