Leaving a rejected first offer on the table over Christmas

BikingBud

ChickenRun93 said:

Hello everyone,

My partner and I just made our first offer on a 3-bed property that has been on the market for just over 2 months marketed at £290,000. The EA's weren't particulary guarded during viewings and when asked, they informed us that there had been no offers on the property and the seller had found somewhere bigger that was vacant but needed an offer to proceed---so were looking to move fairly quickly.

Both our parents have a lot of experience within the construction industry, so we arranged a longer second viewing and treated that as a "soft" survey (looking in the loft, exterior, and general condition). We made our offer a few days later, on the low end at £265, due to work being needed including addressing an odd oily patch coming through on the chimney breast, insufficient insulation in the loft, garage needing a new roof, random bits in the exterior wall not being filled/capped, and generally the finish inside could have been better standard particularly at the marketed price (second-hand kitchen with doors that didn't match as one example). It also had a small downstairs shower-only room at the very back of the house, which we would want to change. 

To back up our offer, we made it clear we are also flexible on move dates (due to renting on a monthly rolling basis) and evidenced a position to move quickly with our AIP, broker details, and £85k deposit. We had also offered to buy the search pack if accepted, knowing that this combined with not necessarily needing to instruct an external Surveyor, would speed the process along.

After 3 days we have just heard that the seller rejected our offer due to it being too low for what they're looking for, but received no counter. We have done our research and found good comps in the area, one with the same large garage and interior layout, for around £270k. I've also found the property was listed last year at £280k, but did not sell.

As we're not in any rush to move or buy, my partner doesn't want to increase our offer due to the "value in our liquidity", and he's pretty firm on leaving it on the table over Christmas. The EA said they think the seller is looking for something in the £270 range, and I think this could seal a fair enough deal, but equally this would open to door to "negotiating with ourselves" as my partner puts it.


I guess I'd just like to get other people's opinions/knowledge where possible. I understand negotiating is meant to be a bit of a test, but I'm not sure it's a good idea for us to be low-balling everything until something sticks!

(My partner is pretty frugal as you'd probably imagine 😆)

Given you are in no immediate rush and have seen comparatives I would be tempted to leave this for now, enjoy Christmas and look a bit closer at some of those alternatives and take the time to discuss the pros and cons of those options.

If the vendors have their sights set on their next house they may not be proceed-able and will likely have to assess their options as well, consider the taking less than their "ideal" price to get them into a proceed-able position. 

Fear of missing out seems to be the biggest irrational and human response that drives house prices up unnecessarily.

I would chill a little!

ReadySteadyPop

ciderboy2009 said:

The fact that they've not countered would lead me to believe that you're further away from what they want than the EA is indicating.

Maybe, but with zero other offers they are not in a strong position.

ciderboy2009

ReadySteadyPop said:

ciderboy2009 said:

The fact that they've not countered would lead me to believe that you're further away from what they want than the EA is indicating.

Maybe, but with zero other offers they are not in a strong position.

What makes you think that the seller is not in a strong position?  They're clearly not in a hurry to sell.

The reliable predictions (ie: not from the regularly incorrect doom-mongering sites that you frequent) are for interest rates to continue to fall and house prices to increase in 2025 more than in 2024.

How many year is it that you've been predicting an imminent price crash now Crashy?  10+?

ThisIsWeird

ChickenRun93 said:

Hello everyone,
My partner and I just made our first offer on a 3-bed property that has been on the market for just over 2 months marketed at £290,000. The EA's weren't particulary guarded during viewings and when asked, they informed us that there had been no offers on the property and the seller had found somewhere bigger that was vacant but needed an offer to proceed---so were looking to move fairly quickly.
Both our parents have a lot of experience within the construction industry, so we arranged a longer second viewing and treated that as a "soft" survey (looking in the loft, exterior, and general condition). We made our offer a few days later, on the low end at £265, due to work being needed including addressing an odd oily patch coming through on the chimney breast, insufficient insulation in the loft, garage needing a new roof, random bits in the exterior wall not being filled/capped, and generally the finish inside could have been better standard particularly at the marketed price (second-hand kitchen with doors that didn't match as one example). It also had a small downstairs shower-only room at the very back of the house, which we would want to change.
To back up our offer, we made it clear we are also flexible on move dates (due to renting on a monthly rolling basis) and evidenced a position to move quickly with our AIP, broker details, and £85k deposit. We had also offered to buy the search pack if accepted, knowing that this combined with not necessarily needing to instruct an external Surveyor, would speed the process along.
After 3 days we have just heard that the seller rejected our offer due to it being too low for what they're looking for, but received no counter. We have done our research and found good comps in the area, one with the same large garage and interior layout, for around £270k. I've also found the property was listed last year at £280k, but did not sell.
As we're not in any rush to move or buy, my partner doesn't want to increase our offer due to the "value in our liquidity", and he's pretty firm on leaving it on the table over Christmas. The EA said they think the seller is looking for something in the £270 range, and I think this could seal a fair enough deal, but equally this would open to door to "negotiating with ourselves" as my partner puts it.
I guess I'd just like to get other people's opinions/knowledge where possible. I understand negotiating is meant to be a bit of a test, but I'm not sure it's a good idea for us to be low-balling everything until something sticks!
(My partner is pretty frugal as you'd probably imagine 😆)

Nice, detailed, post :-)

What can we say?

1) The property is currently over-priced. That's not to say that some idio, er, other buyer won't offer the £290k asking, or even a mid-sum like £280k or £275k, but everything suggests that it is notably over-priced for the current market; it hasn't sold in 2 years, and the EA has informed you they've had no offers. It is overpriced, end of. 

2) The EA has told you the vendor is pretty eager to sell as they have found their next home. But, the vendor is not making any moves to suggest that this is the case, so summat weird is going on there. Possibly their inflated £290k asking price is what they need to buy this other place, but the EA is also telling you that £270 'could' clinch it. Weirder indeed. Perhaps the EA is trying to save face, and not let it go without some 'negotiation' between the vendor's silly expectation, and your 'low' offer? Who knows.

3) You want this place! Not sure why, when you say an equivalent is not far away and in better condition for only £5k more? So, there must be 'something' about this home that you like! Could you describe what it is? Is there a really good reason why this home? I'd suggest it cannot be because you reckon you can add value to it with the work you intend, because you've told us a better-condition equiv is only £5k more - you ain't going to make on it, so it better be because it has that 'something' that makes it a home you believe in?

4) When you are talking house prices of the £250k upwards value, then £5k either way is largely moot. A house like this will likely vary by that amount, and more, on a year-to-year basis, both up and down. It's just a 'number'. It'll have next-to-zero financial impact on you in the medium to long term. Now't.

What to do? I'd suggest you have a chat with your other 'alf and try and articulate 'why this house?'. If you both reply that there is something special about it that appeals - you feel it's the right house for you - then that makes it 'worth' £270k. On that basis, you make that offer to the EA, adding that it'll need withdrawing from the market if accepted. Remind the EA that you were told there was no interest for the past 2 years, so that means it's highly unlikely that there's anyone else out there still 'considering' it. So, if it's truly 'off the market', the vendor cannot entertain any new interest - the EA shouldn't pass this on, as they've agreed this with the vendor. The EA could keep the other parties on file, of course, in case you pull out. 

Yes, there's always the chance someone else can come along and gazump, but I'd suggest it's far less likely in this case; normally, anyone who has already shown interest, even if they haven't made an offer, can still do so. In your case, no-one has seemingly shown even interest!

At the same time, you keep looking too, because there's summat weird with this vendor.

ReadySteadyPop

BikingBud said:

FlorayG said:

What can you afford and how badly do you want this house?
I've never understood this negotiating lark; every house I've ever offered on I've offered the best price I could afford bearing in mind the amount of work needing doing. If the vendor says "no" then I say "OK I will  look elsewhere".
Twice they've come back to me within 2 days and accepted my offer, partly because the EA knows me personally and would have told them I don't haggle. I also flatly refused offers on the house I was selling and had people come back, after speaking with my EA, offering the asking price.
If you are willing to not get this house, stick with your offer. If you absolutely must have it then why didn't you offer more in the first place?

Why would you do that? That's massively over simplifying the process!

No comparison of asking price or recent prices for nearby?

No looking to get best value for money by offsetting for SDLT or looking to get below a LTV threshold to get better interest rate?

Negotiation is key to all transactions and if people are sale buyers, phone and domestic utility provider ditch and fixers, credit card tarts, yellow ticket and discount hunters why would you not also do the same when purchasing a house? It is after all the largest purchase many will ever make with the potential to save the most money.

Offering the "best price I can afford " is not very MSE is it?

No, certainly not, and if rates rise again it will be a regrettable decision for many.

Angelica123

The fact that the seller had it on the market last year at 280k, didn't sell and now has it at 290k, suggests to me a seller that may be hard to negotiate with (as they likely have unrealistic expectations). The fact that you are in a good position to move quickly is only a benefit to a seller who is also looking to move quickly (which doesn't seem to be this seller). 

You just have to consider the opportunity cost and weigh up how you feel buying it for 270k (presuming the EA is correct that the seller would consider 270k) versus how you would feel potentially losing out on the property for the sake of 5k. Which would you regret more?

This all depends on how much you like the property, how long you envision staying there (the longer you plan to live there- the less important a few k difference), how much it would stretch your budget, and how fair the price is. 

ReadySteadyPop

Angelica123 said:

The fact that the seller had it on the market last year at 280k, didn't sell and now has it at 290k, suggests to me a seller that may be hard to negotiate with (as they likely have unrealistic expectations). The fact that you are in a good position to move quickly is only a benefit to a seller who is also looking to move quickly (which doesn't seem to be this seller). 

You just have to consider the opportunity cost and weigh up how you feel buying it for 270k (presuming the EA is correct that the seller would consider 270k) versus how you would feel potentially losing out on the property for the sake of 5k. Which would you regret more?

This all depends on how much you like the property, how long you envision staying there (the longer you plan to live there- the less important a few k difference), how much it would stretch your budget, and how fair the price is. 

They are just following the media narrative that "rates are coming down", they probably don`t grasp that mortgage rates are heavily affected by bond/credit market volatility which is predicted to make a big comeback next year.