Help with offering on property

gabbro86

Hi all,

We have an offer secured on our property, from a landlord (so no chain).

A property we like in the SE has been on the market since beginning of 2023, starting at £1.2m and then reduced to £1.1m. It went under offer in September, but back on the market in October. We viewed at the end of November and the seller told us the whole family were going to move to NZ in January. It is on sale with THREE different agencies.

After our negotiations for another property fell through in December, we decided to offer £990k (10% less) last Thursday.

EA came back on Saturday morning, saying the offer in September was for asking price, but that buyer lost their buyer and has been waiting to get another one. So, the seller is looking for a matching offer at least. They also mentioned that, "in order to break even with all the work done in the house (which is, admittedly, quite a bit), they'd need at least £1.07m". Of course, this could all just be EA crap.

Now what would you do? We love the property and its location and could afford paying asking price (although not sure the mortgage survey would cover it... but that's a bridge we'd cross when we get to it), but we can't shake the feeling we'd be "overpaying".

GDB2222

Who knows? I think your offer at £990k was psychologically wrong. £1m has a much better ring to it. 

The buyers from September have still not found a buyer for their property, and they may need too much in order to pay £1.1m for this place.  So, they may not be realistic buyers, although that doesn’t stop the seller having expectations of getting that amount.

The £1.07m figure from the agent is a strong indication that he thinks the seller would accept that amount, but presumably you would prefer to pay less. 

What’s the seller’s plan? Go to NZ and leave the house until it sells? 

gabbro86

In hindsight, I do realise £1m would've had a better ring to it...

The sellers are a family with 2 young kids. The husband is going to NZ in January to start his job. The wife is staying behind with the kids (and her parents, who also live at the property) until the house is sold. We believe this would make them more willing to accept a lower offer from a proceedable buyer... I agree the figure from the EA should give us a strong indication and maybe we should just go with that.

GDB2222

That’s quite a wrench! I would not be happy with leaving my wife and kids behind like that. 

I’d offer a very quick exchange and completion - I’m not sure how you would convince them that you could do that, but the fact that you have an offer on your house would help. Use this as a bargaining chip, and leave the agent to do his job of persuading both parties. 

Albermarle

Maybe go to a round One Million and wait for response.
Be prepared to go up a bit from that after more negotiations, but maybe less than £1.07Million.
Remember a survey might find something significant, and then a renegotiation could happen anyway.

ReadySteadyPop

gabbro86 said:

Hi all,

We have an offer secured on our property, from a landlord (so no chain).

A property we like in the SE has been on the market since beginning of 2023, starting at £1.2m and then reduced to £1.1m. It went under offer in September, but back on the market in October. We viewed at the end of November and the seller told us the whole family were going to move to NZ in January. It is on sale with THREE different agencies.

After our negotiations for another property fell through in December, we decided to offer £990k (10% less) last Thursday.

EA came back on Saturday morning, saying the offer in September was for asking price, but that buyer lost their buyer and has been waiting to get another one. So, the seller is looking for a matching offer at least. They also mentioned that, "in order to break even with all the work done in the house (which is, admittedly, quite a bit), they'd need at least £1.07m". Of course, this could all just be EA crap.

Now what would you do? We love the property and its location and could afford paying asking price (although not sure the mortgage survey would cover it... but that's a bridge we'd cross when we get to it), but we can't shake the feeling we'd be "overpaying".

Yes, it is more than likely just EA ****, and yes you would probably be overpaying with where we are now on interest rates etc., trust your gut feelings!

https://www.thisismoney.co.uk/money/article-14245583/homeowners-higher-borrowing-rates-economist-warns.html

ReadySteadyPop

gabbro86 said:

Hi all,

We have an offer secured on our property, from a landlord (so no chain).

A property we like in the SE has been on the market since beginning of 2023, starting at £1.2m and then reduced to £1.1m. It went under offer in September, but back on the market in October. We viewed at the end of November and the seller told us the whole family were going to move to NZ in January. It is on sale with THREE different agencies.

After our negotiations for another property fell through in December, we decided to offer £990k (10% less) last Thursday.

EA came back on Saturday morning, saying the offer in September was for asking price, but that buyer lost their buyer and has been waiting to get another one. So, the seller is looking for a matching offer at least. They also mentioned that, "in order to break even with all the work done in the house (which is, admittedly, quite a bit), they'd need at least £1.07m". Of course, this could all just be EA crap.

Now what would you do? We love the property and its location and could afford paying asking price (although not sure the mortgage survey would cover it... but that's a bridge we'd cross when we get to it), but we can't shake the feeling we'd be "overpaying".

What is the price history of the property? That is super important now that interest rates have moved so much, just because they have "had work done" it doesn`t mean they should expect to make a profit on the property, or even re-coup the cost of the work, that isn`t how a "market" works. Are you using PropertyLog to check price reductions on similar properties?

gabbro86

ReadySteadyPop said:

What is the price history of the property? That is super important now that interest rates have moved so much, just because they have "had work done" it doesn`t mean they should expect to make a profit on the property, or even re-coup the cost of the work, that isn`t how a "market" works. Are you using PropertyLog to check price reductions on similar properties?

They purchased for £845k in 2017. According to house price index for the specific post code (https://www.nationwide.co.uk/house-price-index/), it'd be worth about £940k now.
Actual similar properties in the area are a bit rare, but they sell for about £950k-£1.1m.

kinger101

They not entitled to recover what they've spent on the property.   It seems you are both very near a price you'd be happy.  I think £1M is now too small an increment.  You could go £1.03M.  I seems a reasonable point in between and I think them not wanting to be the other side of the world from each other may have some sway.

If you really like the property, it's a case of asking yourself if you're prepared to let it slip for a couple of percent.  Sometimes the answer is yes.

kinger101

gabbro86 said:

ReadySteadyPop said:

What is the price history of the property? That is super important now that interest rates have moved so much, just because they have "had work done" it doesn`t mean they should expect to make a profit on the property, or even re-coup the cost of the work, that isn`t how a "market" works. Are you using PropertyLog to check price reductions on similar properties?

They purchased for £845k in 2017. According to house price index for the specific post code (https://www.nationwide.co.uk/house-price-index/), it'd be worth about £940k now.
Actual similar properties in the area are a bit rare, but they sell for about £950k-£1.1m.

Those index-based tools can only give a ballpark figure.  Recent sales of similar properties in close proximity definitely a better guide and what a surveyor would use if they were asked to price.  

GDB2222

gabbro86 said:

ReadySteadyPop said:

What is the price history of the property? That is super important now that interest rates have moved so much, just because they have "had work done" it doesn`t mean they should expect to make a profit on the property, or even re-coup the cost of the work, that isn`t how a "market" works. Are you using PropertyLog to check price reductions on similar properties?

They purchased for £845k in 2017. According to house price index for the specific post code (https://www.nationwide.co.uk/house-price-index/), it'd be worth about £940k now.
Actual similar properties in the area are a bit rare, but they sell for about £950k-£1.1m.

Does that comparison help if they have spent a load of money improving the property?

Of course, it's quite easy to spend a load of money NOT improving the property, but it seems you like what they have done.