Negotiating on Price - Tips? Advice?

Albermarle

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. 

If I sell my rental property quickly it will make me chain free which may be useful to the vendor, whatever their position.

As already mentioned being a cash buyer is only a minor advantage. In fact you are not one as you seem dependent on selling a rental property. It is also possible that the buyer of that (and it might take months to sell), may have to sell a property of their own.

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.

I would not worry about being laughed at. It is always easier to increase an offer than reduce it.

 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) 

Pretty much most vendors will hope for a higher price, whilst buyers always hope for a lower price.

ReadySteadyPop

pjs493 said:

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. 

You don`t need to be "tech savvy", the app does all the work! That is why I always laugh at the term "tech savvy generation", it is point and click or tap and swipe, you don`t really need to know much to do that ?

https://www.propertylog.net/

ReadySteadyPop

pjs493 said:

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.

I don`t really know what the "10% rule" is to be honest, if a house is 20 or 30% overpriced the 10% "rule" isn`t going to help much, you need to use the available price apps to DYOR and obviously get a professional valuation.

pjs493

So having found a ‘past listing’ section on the Zoopla app that includes price reductions. I’ve discovered that most of my shortlisted properties have been on the market for a while and have had a number of price reductions. One in particular appears to have been on and off the market for over two years with the current asking price being £200k less than when it was first listed by the current vendor two years ago! It’s currently listed for what they paid for it in 2003!

The thing that I’m the most shocked at is that the current price for most of these properties is around the same as what the current vendors bought these houses for 20 or 30 years ago. This is ringing alarm bells for me. I would have expected some decent appreciation in that timeframe. Despite some of these properties needing a new bathroom or a bit of redecoration. 

The flat my late husband bought 15 years ago that is currently let out is worth only slightly more than what he paid for it, but it’s leasehold and service charges and fees have gone up exponentially since he bought it back then. Plus a lot of the transport links and ‘regeneration’ of the area it’s in never came to fruition. I can understand a flat in a complex having little room for appreciation (it still has the original kitchen and bathroom from when he bought it). 

But I just can’t understand why these beautiful rural houses haven’t appreciated in 20-30 years and I’m worried that if I buy one of them, it’s still going to be worth the same 30 years down the line. That being said as a cash buyer, I’m not going to be paying thousands in mortgage interest like some of these vendors have potentially done. 

I suppose I’m also worried that there might be little room for negotiating if the current asking price is roughly what they paid for it. Someone would have to be pretty desperate to move to accept an offer for less than what they bought their house for 20-30 years ago. Comparatively, my parents bought a cookie cutter new build generic house in the 1990s that had increased in value by five times what they bought it for. Albeit having had a new kitchen and bathroom at the time they sold it five years ago. 

What is going on with the market?

ReadySteadyPop

It is probably more about what is going on with these particular houses, there must be structural issues at those prices, the market has weakened a lot, but not back to 2003 prices or even further back.

ReadySteadyPop

Not sure Zoopla is a good research tool to be honest.

pjs493

Thanks for the additional comments. I get that using Zoopla is like doing sums on the back of a napkin or sticking one’s finger in the air. 

Having chatted to some family
members in the area, I think a lot of it has to do with new build estates that have been built near these villages in recent years offering more options with many opting for new builds. I think some of the properties are so unique that it’s hard for an agent to put an accurate value on it because it’s very dependant on whether anyone is actually interesting in buying a unique property and there isn’t much to compare it to to set on a strong value. 

One property only has 120 years left on its lease which is potentially putting people off. I need to look into this more and see if there is the possibility of extending the lease otherwise it may by a nonstarter. 

The area near where my parents’ house was (that I mentioned earlier), that they sold and made a chunk from, had increased along with other houses in the area due to new transport links being extended and a new hospital being built nearby. One relative saw a 20% increase between buying and selling in a five year period due to these things. 

RAS

Have you downloaded the deeds from the Land Registry, cost £3?

Then go into Ancestry (free at some local libraries) and see what happens when you insert the name and surname of the owner, and town. Add the street name in keywords, ticked, and it may give you the occupant. If not try with just the surname.

Or go to www192.com and try the owner's full name, address and postcode. If the owner is there, and there are other occupants, try again with just the surname to identify other occupants.

ReadySteadyPop

pjs493 said:

Thanks for the additional comments. I get that using Zoopla is like doing sums on the back of a napkin or sticking one’s finger in the air. 

Having chatted to some family
members in the area, I think a lot of it has to do with new build estates that have been built near these villages in recent years offering more options with many opting for new builds. I think some of the properties are so unique that it’s hard for an agent to put an accurate value on it because it’s very dependant on whether anyone is actually interesting in buying a unique property and there isn’t much to compare it to to set on a strong value. 

One property only has 120 years left on its lease which is potentially putting people off. I need to look into this more and see if there is the possibility of extending the lease otherwise it may by a nonstarter. 

The area near where my parents’ house was (that I mentioned earlier), that they sold and made a chunk from, had increased along with other houses in the area due to new transport links being extended and a new hospital being built nearby. One relative saw a 20% increase between buying and selling in a five year period due to these things. 

Makes sense.