Negotiating on Price - Tips? Advice?

pjs493

I’ve got my eye on a property I really love. From a bit of online research I believe it’s been on the market for about a year and was reduced in price about six months ago. 

A similar neighbouring property with more up to date kitchen and bathrooms sold last year for about £20k less than the ‘offers over’ price of the house I’m looking. That house went for £10k over its ‘offers over’ price. I haven’t been able to figure out how long it was on the market for before it sold, but I suspect it sold fairly quickly because it didn’t need any updating or redecoration other than personal preference of the buyer. 

I suspect the house I’m interested in is putting people off because, while perfectly habitable, the kitchen and bathrooms are very dated and need to be replaced. A couple of the rooms could do with redecoration, or at the very least, new carpets. 

I’m a first time buyer so I’d like some tips or advice on how to approach this. I don’t want to go in with a really low offer and be laughed at and not taken seriously. But conversely, I don’t want to put in an offer and have it snapped up and always wonder if I could have gotten it for less. 

If it helps, there is a borderline around the price I’m thinking that tips me from needing a mortgage to being a cash buyer. (I would then need to save a little more before doing any bathroom or kitchen updates, but I’d be mortgage free so could save the money up reasonably quickly.) 

So perhaps a slightly cheeky offer with the proviso that I’d be a cash buyer would be enough for the vendor to take a slightly lower offer than they’d like, to know that there would be no mortgage process to contend with. 

Martico

Not something I read much about on these boards, but something that I always consider: who are the vendors and what is their likely position? How much you know about them and their position will tell you a lot about what kind of price would be best to go for.

A family acting as PoA for someone who's had to go into residential care will act differently to a divorcing couple, or a family desperate for a bigger place, or a family that just fancy a change if the right offer happens to come up.

Granted, those are inquiries that are best set in play when first viewing a place, but the more info you can gather on the vendors the better. 

You're dealing with people as much as (or more than) the market.

Sorry that this didn't really answer your question!

Scotbot

If it has been on the market for a year with only one price reduction they are not that bothered about selling. I doubt thy will accept anything less than 95%.

 It may be worth less but they clearly aren't in a hurry to sell. For that reason they won't be attracted to cash buyers either. The mortgage process isn't their problem, either you get one or you don't and it only takes a few weeks to find out. Start off by asking the agent whether they are open to offers.

ReadySteadyPop

pjs493 said:

I’ve got my eye on a property I really love. From a bit of online research I believe it’s been on the market for about a year and was reduced in price about six months ago. 

A similar neighbouring property with more up to date kitchen and bathrooms sold last year for about £20k less than the ‘offers over’ price of the house I’m looking. That house went for £10k over its ‘offers over’ price. I haven’t been able to figure out how long it was on the market for before it sold, but I suspect it sold fairly quickly because it didn’t need any updating or redecoration other than personal preference of the buyer. 

I suspect the house I’m interested in is putting people off because, while perfectly habitable, the kitchen and bathrooms are very dated and need to be replaced. A couple of the rooms could do with redecoration, or at the very least, new carpets. 

I’m a first time buyer so I’d like some tips or advice on how to approach this. I don’t want to go in with a really low offer and be laughed at and not taken seriously. But conversely, I don’t want to put in an offer and have it snapped up and always wonder if I could have gotten it for less. 

If it helps, there is a borderline around the price I’m thinking that tips me from needing a mortgage to being a cash buyer. (I would then need to save a little more before doing any bathroom or kitchen updates, but I’d be mortgage free so could save the money up reasonably quickly.) 

So perhaps a slightly cheeky offer with the proviso that I’d be a cash buyer would be enough for the vendor to take a slightly lower offer than they’d like, to know that there would be no mortgage process to contend with. 

Look at the price history, with interest rates up and possibly going higher it would be a red flag if they are trying it on with a big mark up on the price they paid when rates were at zero, also find out what other similar properties have sold for, not asking price that is just seller hope, but actual sold prices.

pjs493

Thanks to both for the advice and questions to ask. From what I gather it’s owned by someone who is elderly and I suspect they’ve become too frail to manage the house alone and are either downsizing, moving into sheltered accommodation, or moving in with a relative. It’s been owned by the same vendor for around 30 years. 

I’m inclined to agree that they aren’t in any particular rush to sell. Using an example above, it isn’t a family desperate to upsize to have more children or a divorcing couple needing to release equity. But then again, if it is someone elderly who is moving to receive care or support, selling the house may be something that is helpful for the family to get sorted. Especially when considering council tax, service charges, utilities, etc. 

I’ll be sure to ask the agent how long it’s been for sale, if there have been any other offers, etc, why the vendor is choosing to sell, and so on. 

Martico

Elderly person moving out (apologies, this is going to make me sound so manipulative) I'd say that a caring and attentive email / letter accompanying the offer  (I particularly like how you've done X and Y to the property / it already has a homely feel, I'm looking forward to years here - make it personal and meaningful, this is a home not just any property) would help. 
Ask about their time flexibility and suggest that you'll be reasonable to cater for their needs. 
They may well (or at least their family may be) keen to get going sooner rather than later. Make things easy for them, that may well prove a better bargaining tool than price

BobT36

pjs493 said:

Thanks to both for the advice and questions to ask. From what I gather it’s owned by someone who is elderly and I suspect they’ve become too frail to manage the house alone and are either downsizing, moving into sheltered accommodation, or moving in with a relative. It’s been owned by the same vendor for around 30 years. 

I’m inclined to agree that they aren’t in any particular rush to sell. Using an example above, it isn’t a family desperate to upsize to have more children or a divorcing couple needing to release equity. But then again, if it is someone elderly who is moving to receive care or support, selling the house may be something that is helpful for the family to get sorted. Especially when considering council tax, service charges, utilities, etc. 

I’ll be sure to ask the agent how long it’s been for sale, if there have been any other offers, etc, why the vendor is choosing to sell, and so on. 

It should show when it was added, if it's on Rightmove. (unless it's been taken down and put back up). 

The PropertyLog Chrome Add-in will show the history, too. 

bobster2

Martico said:

Elderly person moving out (apologies, this is going to make me sound so manipulative) I'd say that a caring and attentive email / letter accompanying the offer  (I particularly like how you've done X and Y to the property / it already has a homely feel, I'm looking forward to years here - make it personal and meaningful, this is a home not just any property) would help. 
Ask about their time flexibility and suggest that you'll be reasonable to cater for their needs. 
They may well (or at least their family may be) keen to get going sooner rather than later. Make things easy for them, that may well prove a better bargaining tool than price

Not sure I'd recommend bothering with any of this. In my experience as a seller - estate agents have not generally forwarded me the emails in which prospective buyers have set out their offers. The only exception was when a buyer with an offer accepted was trying to negotiate the price down.

Just make a sensible offer.

It is very common to make an offer up to 10% below asking price and after a bit of back and forth settle somewhere in the middle.

As a seller I've not been offended by people making offers up to 10% below asking price - I have just asked the estate agent to see whether they can go higher.

But if they get "cheeky" and go beyond this I have found it hard to take them seriously - and just tell the estate agent to give them a firm "no".

Bigphil1474

OP, in my experience, offer whatever you want. I've never been offended by a low offer, and nobody seems to have taken any offence when I've offered low. It's a negotiation. I saw a house near us that we loved. It was up for offers over £360k. It had been on the market for over a year, EA said they hadn't had any acceptable offers. We offered £345k, EA thought it was a fair offer. Seller said no. We went up to £350k, and they came back saying he wouldn't accept less than the £360k so we moved on as we couldn't offer more. He sold it less than a fortnight later for £360k. The house we were going to buy was up at £350k, we offered £325k and it was accepted. Unfortunately, that fell through after our buyer pulled out. 

pjs493

BobT36 said:

pjs493 said:

Thanks to both for the advice and questions to ask. From what I gather it’s owned by someone who is elderly and I suspect they’ve become too frail to manage the house alone and are either downsizing, moving into sheltered accommodation, or moving in with a relative. It’s been owned by the same vendor for around 30 years. 

I’m inclined to agree that they aren’t in any particular rush to sell. Using an example above, it isn’t a family desperate to upsize to have more children or a divorcing couple needing to release equity. But then again, if it is someone elderly who is moving to receive care or support, selling the house may be something that is helpful for the family to get sorted. Especially when considering council tax, service charges, utilities, etc. 

I’ll be sure to ask the agent how long it’s been for sale, if there have been any other offers, etc, why the vendor is choosing to sell, and so on. 

It should show when it was added, if it's on Rightmove. (unless it's been taken down and put back up). 

The PropertyLog Chrome Add-in will show the history, too. 

I’ll have to try to be tech savvy to figure out the Chrome add-in you mention. I’m not great with tech. 

On Rightmove I can see when the price was reduced but haven’t been able to find when it first went on the market.

Zoopla’s estimated value tracker shows a steady line and then jumps up by about £50k a year ago (which I’ve assumed is when it was first marketed) and then drops by £50k at the time the price was reduced and the line now tracks along what the Zoopla estimate was before the big jump. I can only assume the anomaly is due to it being for sale at the higher price and Zoopla have used that data in their estimated value tool. 

Interestingly, Zoopla’s value is a little under the ‘offers over’ price, so I think the vendor is perhaps hoping for more than it’s worth due to the length of time they’ve lived there (so lots of memories and sentimental attachment) and possibly an agent trying to maximise what they can get. In the blurb it is described as ‘a fantastic family home’ but also ‘ideal as a second home’. So perhaps they’ve been hopeful for wealthy city dwellers looking to pay over the odds for a countryside retreat. 

pjs493

bobster2 said:

Martico said:

Elderly person moving out (apologies, this is going to make me sound so manipulative) I'd say that a caring and attentive email / letter accompanying the offer  (I particularly like how you've done X and Y to the property / it already has a homely feel, I'm looking forward to years here - make it personal and meaningful, this is a home not just any property) would help. 
Ask about their time flexibility and suggest that you'll be reasonable to cater for their needs. 
They may well (or at least their family may be) keen to get going sooner rather than later. Make things easy for them, that may well prove a better bargaining tool than price

Not sure I'd recommend bothering with any of this. In my experience as a seller - estate agents have not generally forwarded me the emails in which prospective buyers have set out their offers. The only exception was when a buyer with an offer accepted was trying to negotiate the price down.

Just make a sensible offer.

It is very common to make an offer up to 10% below asking price and after a bit of back and forth settle somewhere in the middle.

As a seller I've not been offended by people making offers up to 10% below asking price - I have just asked the estate agent to see whether they can go higher.

But if they get "cheeky" and go beyond this I have found it hard to take them seriously - and just tell the estate agent to give them a firm "no".

I think after doing a bit more research I may opt for the 10% under rule and explain it’s because I want to update the bathrooms and kitchen. If I sell my rental property quickly it will make me chain free which may be useful to the vendor, whatever their position. If they are indeed an elderly person moving in with a relative, it makes it a guaranteed sale (barring any snags that turn up during surveys etc) because I don’t have a chain that could collapse. Or if they are downsizing and do have a chain it again shows I don’t have a chain that could collapse. 

On this property, with the 10% rule, I could be a cash buyer and have some money to start updates and save to do the rest in time. 

The kitchen will need doing almost straight away because there’s no where for a dishwasher to go and my American style fridge freezer would currently have to go in the dining room because the kitchen has an integrated fridge freezer and no space for mine.