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  • FIRST POST
    • Posiex
    • By Posiex 21st Oct 19, 1:02 AM
    • 11Posts
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    Posiex
    What price should I start negotiations at and what should I include in my offer letter?
    • #1
    • 21st Oct 19, 1:02 AM
    What price should I start negotiations at and what should I include in my offer letter? 21st Oct 19 at 1:02 AM
    So two main things really.

    1) What price should I start negotiations for an offer on the house I am interested in?

    I set myself a budget of 80k because I don't like to be in debt and I want to be able to afford overpayments each month to pay off my mortgage as early as possible and have money left over each month to have an enjoyable life.

    The first house I am interested in is advertised with a guide price of 95k and has been on the market for less than 3 weeks. I went to see the house and told the vendor my budget was 80k but I would be happy to push it up a little if I found a property I really liked. I also told her I was viewing a number of other properties I am interested in the next week and may be in touch for a second viewing depending on my interest after viewing the others. I also made sure she knew I was in a good position to move quickly if I made an offer, with a mortgage in principle and seeking a lawyer to appoint ASAP.

    Whilst viewing the property I noticed a number of issues that I think I could use to negotiate. There was fogging in some of the double glazing which indicates it needs replacing, the boiler is an old tank type which would need replacing with a combi boiler to be efficient (quoted £1500 by mates partner), the bathroom suite is green and would benefit from upgrading, the roof appears to be old. The owner said they can move out to their parents to vacate the property and want to move closer to their daughters school. I said my preference will be to offer on a house with sellers who are organised and motivated to complete quickly. I asked if she had lawyers in place to get things moving if I were to make an offer, she said no but she will tell her husband to get on with that.

    The second house I am interested in is basically the same house but a lot more updated, fresher d!cor, new bathroom etc, mid terrace with a smaller garden and a front patio instead of drive which is advertised at 90k on the market for less than 3 weeks.
    It has an extra third bedroom (but is basically 1 bedroom split into two, with entry to the second via the first) and does not have a lean to utility room that the first house does. Would it be unwise to use the other house during negotiations for example, I am interested in a second property which is very similar but at 90k has w, x and y which would cost me around z amount to get this property to a similar standard.

    Recently sold prices are very difficult to establish as the area is predominantly council and so a very few have been sold. Zoopla has average for 88k in the last 12 months for 2 properties on this street but a number of similar houses have recently sold STC in the general area advertised between 65 and 80k. The Housing Price Index values the property at 91k based on the last purchase price.

    I will arrange a second viewing next week after viewing the second house and will be with the vendor so I can start negotiations in person. I am thinking of kicking off the negotiations at 15% lower than the asking price at 81K and see what happens from there. Does that seem reasonable? I will also find out what the owner for the second house is willing to accept since it is more up to date house at a lower price it is a good plan B if I can't come to an arrangement with the owner of the first house.

    2) I am going to draft my offer letter in advance. Even though I intend to pre-negotiate with the vendor and agree a price, should I include the following in the official offer letter?

    - Offer
    - My ability to move forward and complete quickly due to being a chain free first time buyer with no notice period and being very organised, with paperwork, lawyers and surveyors all lined up ready to go
    - My decent deposit (about 12% of what my max offer would be) and secure job putting me in a strong position for a fuss free mortgage approval.
    - How locally sold prices have influenced my offer to be below the asking price
    - How the work required to the house has influenced my offer to be below the asking price
    - Why I like the house and how I see my future there (I intend to apply to be a foster carer in the near future so it will make a lovely family home)
    - Copy of Agreement in Principle Letter
    - Copy of Lifetime ISA statement to demonstrate I have the funds for deposit
    - Copy of ID
    - Statement that the offer is conditional on the property being removed from market with no further viewings

    Should I include anything else?

    Thanks
    Last edited by Posiex; 21-10-2019 at 1:37 AM.
Page 1
    • deannatrois
    • By deannatrois 21st Oct 19, 5:26 AM
    • 6,412 Posts
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    deannatrois
    • #2
    • 21st Oct 19, 5:26 AM
    • #2
    • 21st Oct 19, 5:26 AM
    I hope you find a property you are successful with eventually but your offer letter would put me off. You may eventually come across someone desperate to sell but its going to take time and waste a lot of paper, I suspect. I don't think you need to go into such detail, may offend the vendor detailing every fault in their house. I'm surprised you don't understand that the vendor and buyer will have very different opinions of the house and that writing a letter like this may well put off more than it encourages serious consideration. Most vendors who are serious about selling will need a certain amount to enable them to buy the house they want to move to.

    Your post seems very very focused on what you want, which is understandable to a degree, but contains very little understanding that the vendor has wants and needs as well. You need to get this for successful negotiations.
    Last edited by deannatrois; 21-10-2019 at 5:42 AM.
    • warby68
    • By warby68 21st Oct 19, 6:09 AM
    • 1,422 Posts
    • 11,024 Thanks
    warby68
    • #3
    • 21st Oct 19, 6:09 AM
    • #3
    • 21st Oct 19, 6:09 AM
    That's too scarily full on and personal - I, as a vendor, would be put off.

    The key points are your £ offer, your status and that you wish the property to be removed from the market. You need to confirm these upfront when making the offer/negotiating which is usually verbal, and not wait for the follow up confirmation.

    Keep the other personal stuff out as well as all your rationale for offering what you have. People do not want to be told what's wrong with their home - most of that stuff is visible and properties are sold as seen and in theory have their condition already factored into the asking price. The time to bring specific points forward is when you have your survey and the results mean you wish to negotiate. Highlighting what other properties you like and that they seem better value will only tempt vendors to tell you to buy one of those instead.

    You also seem to want it all. You want a massive discount, lots of things fixing and for them to move really fast. You might be better revisiting the art of negotiation. These property prices are at the bottom end which means there is relatively little wiggle room eg £2k for a boiler is neither her nor there on a £250k price but is on an £80k one. Your deposit and FTB with a mortgage aren't unusual - that is what that price will probably attract. What you could offer as a FTB is flexibility in timing rather pushing them to be quick for example.
    • _shel
    • By _shel 21st Oct 19, 7:04 AM
    • 2,424 Posts
    • 4,472 Thanks
    _shel
    • #4
    • 21st Oct 19, 7:04 AM
    • #4
    • 21st Oct 19, 7:04 AM
    Why would you write a novel? Just make the offer.
    • Fosterdog
    • By Fosterdog 21st Oct 19, 7:06 AM
    • 4,359 Posts
    • 7,595 Thanks
    Fosterdog
    • #5
    • 21st Oct 19, 7:06 AM
    • #5
    • 21st Oct 19, 7:06 AM
    Do people actually submit offer letters? When we bought we just verbally gave the vendors EA our offer which the passed on and was accepted.

    The only time I've heard of offer letters is if you think the EA is not passing offers on to the vendor so you send them a letter with your offer instead.

    OP I think you will be house hunting for a long time
    • comeandgo
    • By comeandgo 21st Oct 19, 7:10 AM
    • 2,771 Posts
    • 3,797 Thanks
    comeandgo
    • #6
    • 21st Oct 19, 7:10 AM
    • #6
    • 21st Oct 19, 7:10 AM
    That letter would be so far from the norm that I'd dismiss you as a buyer immediately.
    • babyblade41
    • By babyblade41 21st Oct 19, 7:14 AM
    • 1,420 Posts
    • 2,622 Thanks
    babyblade41
    • #7
    • 21st Oct 19, 7:14 AM
    • #7
    • 21st Oct 19, 7:14 AM
    Just call the agent and make an offer, no need to write.

    It will either be accepted or rejected or a counter offer will be given.

    You appoint a solicitor when you are ready to proceed
    • FtbDreaming
    • By FtbDreaming 21st Oct 19, 7:15 AM
    • 83 Posts
    • 107 Thanks
    FtbDreaming
    • #8
    • 21st Oct 19, 7:15 AM
    • #8
    • 21st Oct 19, 7:15 AM
    Ive only been browsing so not offered/ bought a house but that sounds way too intense. Just offer what you want and they can either accept or decline. Its more of a sellers market at that price so I dont think youre in a position to make so many demands.

    I'm looking at similar budget and ex council houses and they are selling fast in my area. Although I know what I think theyre worth as in I live in one and know the area well for crime asb etc... there seems to be a lot of investors snapping up the properties painting them and replacing bathroom and kitchen then relisting them for 20k more. Thus inflating the prices in the area.
    • Davesnave
    • By Davesnave 21st Oct 19, 8:08 AM
    • 29,825 Posts
    • 102,947 Thanks
    Davesnave
    • #9
    • 21st Oct 19, 8:08 AM
    • #9
    • 21st Oct 19, 8:08 AM
    As an OAP and a big fan of girl bands for all the wrong reasons, I thought the chorus line in Veruca Salt's "So Weird" applied to me, but perhaps it would also sum up the likely reaction of a vendor to the proposal you're making here:

    You don't know me
    You don't own me
    You're just passing through my life
    You're a stranger
    With bad behavior
    You're so weird I'm terrified


    Others have already explained why.
    Things are more like they are right now than they've ever been.




    • zx81
    • By zx81 21st Oct 19, 8:12 AM
    • 24,158 Posts
    • 26,881 Thanks
    zx81

    2) I am going to draft my offer letter in advance. Even though I intend to pre-negotiate with the vendor and agree a price, should I include the following in the official offer letter?

    - Offer
    - My ability to move forward and complete quickly due to being a chain free first time buyer with no notice period and being very organised, with paperwork, lawyers and surveyors all lined up ready to go
    - My decent deposit (about 12% of what my max offer would be) and secure job putting me in a strong position for a fuss free mortgage approval.
    - How locally sold prices have influenced my offer to be below the asking price
    - How the work required to the house has influenced my offer to be below the asking price
    - Why I like the house and how I see my future there (I intend to apply to be a foster carer in the near future so it will make a lovely family home)
    - Copy of Agreement in Principle Letter
    - Copy of Lifetime ISA statement to demonstrate I have the funds for deposit
    - Copy of ID
    - Statement that the offer is conditional on the property being removed from market with no further viewings

    Originally posted by Posiex
    I think it's fine, with just a couple of tweaks.
    • warby68
    • By warby68 21st Oct 19, 8:21 AM
    • 1,422 Posts
    • 11,024 Thanks
    warby68
    OP, you're getting a lot of very consistent replies which pretty much disagree with everything in your approach.

    I hope you're able to take this positively and rethink.

    If you do have problems with overthinking, control, or are just completely inexperienced and trying to teach yourself, its really helpful to have someone in real life to bounce house buying off - relative, friend, colleague who has been through a few property transactions. Please note, if you haven't already, that the estate agent is rarely that person and that solicitors don't handhold either.

    PS I didn't directly answer your first question either about what you should offer - be aware that offering £81k v asking £95k is quite a long way short and not likely to endear you to a vendor. If your budget really is £80k then you are looking at properties which are probably too expensive. You can try by all means but expect to be knocked back. If you REALLY want a property don't try and be a total cheapskate - it will likely backfire.
    Last edited by warby68; 21-10-2019 at 8:27 AM.
    • Davesnave
    • By Davesnave 21st Oct 19, 8:50 AM
    • 29,825 Posts
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    Davesnave
    If your budget really is £80k then you are looking at properties which are probably too expensive.
    Originally posted by warby68
    The OP suggests they can afford more, but they dislike debt, want to pay down the mortgage fast and still have money over for personal enjoyment.

    I think that would apply to everyone here, but the dangers of going low budget probably dissuade many of us from seeking the lowest cost solution.

    Whilst avoiding stifling debt is laudable, purchasing at the very bottom of the market may bring different problems. Cheap houses are cheap for a reason. Owning the best house on the worst street isn't often a recipe for happiness, and nor is it clever to buy a doer-upper if your heart and abilities aren't in the best shape to deal with the consequences.
    Things are more like they are right now than they've ever been.




    • Murphybear
    • By Murphybear 21st Oct 19, 10:53 AM
    • 5,029 Posts
    • 9,502 Thanks
    Murphybear
    Just call the agent and make an offer, no need to write.

    It will either be accepted or rejected or a counter offer will be given.

    You appoint a solicitor when you are ready to proceed
    Originally posted by babyblade41
    Last time we bought a property we saw a lot which weren’t “quite right” then we saw a detached bungalow with gorgeous garden and a workshop (what OH wanted). We both knew this was “the” property. We got the EA to one side and made a verbal offer which was accepted. While the EA went back to his office we stayed on for tea and home made cake. Everything went like clockwork and 20 years later the only reason we are not still living there is we moved 200 miles.

    I agree with the others, you are overthinking. A verbal offer in the first instance is all you need.

    Hopefully things will go well for you.
    • oozle1989
    • By oozle1989 21st Oct 19, 11:20 AM
    • 380 Posts
    • 487 Thanks
    oozle1989
    You can't list off everything that you think is wrong with a property and knock 15k off the price based on your own opinions.

    All the work that needs doing on the property would have already been taken into account in the valuation.

    You need to either up your budget or start looking at properties that you can realistically get within your current budget.
    • sillyhilly
    • By sillyhilly 21st Oct 19, 11:21 AM
    • 174 Posts
    • 237 Thanks
    sillyhilly
    If anyone asked me to accept 15k less than asking (equating to a >16% discount) for very trivial matters, AND ask me to take the property off the market, I'd be telling them to take a very long walk off a short pier.
    • kdotdotdotdot
    • By kdotdotdotdot 21st Oct 19, 11:35 AM
    • 24 Posts
    • 23 Thanks
    kdotdotdotdot
    So, if I've understood correctly, the house you want is listed at £95k but is in worse condition and needs more work than a very similar house you've seen and is listed at £90k? What's the reason you want the more expensive but not as good house?

    You say you've set yourself a budget of £80k but can go higher. I don't know the first thing about mortgages, so feel free to shoot me down here, but isn't it normal for there to be penalty fees for overpayment? If so, isn't it better to put more cash (which you say you have) down in the first place and apply for a lower mortgage loan?
    • Cakeguts
    • By Cakeguts 21st Oct 19, 11:57 AM
    • 6,830 Posts
    • 10,879 Thanks
    Cakeguts
    You don't get money off for items that work perfectly well but are not to your taste.



    You don't get money off for a boiler that works but is old or a bathroom suite that is a colour that is not to your taste.


    You don't get money off for an old roof that is still in perfect order.



    So far you have not identified anything that you can use to get the price down. It sounds as if the house is in good order but needs a bit of cosmetic improvement to your taste.



    It is on the market at £95k. If houses are selling fast in that area you are not going to get it for less than about £94k and you might have to pay the asking price.



    There is no point in spending time writing a long letter and then offering £80k you will just be wasting your time and everyone else's. They are not going to accept £80k from anyone however many silly suggestions they make in a letter. Being a first time buyer does not get you a large discount. The only people who might get a discount if the seller wants to move fast are those people who can buy the house without having to get a mortgage. You are not one of them. You are in the same position as anyone else who might make an offer on the house.
    • powerful_Rogue
    • By powerful_Rogue 21st Oct 19, 12:15 PM
    • 3,997 Posts
    • 6,092 Thanks
    powerful_Rogue
    So two main things really.

    The second house I am interested in is basically the same house but a lot more updated, fresher d!cor, new bathroom etc, mid terrace with a smaller garden and a front patio instead of drive which is advertised at 90k on the market for less than 3 weeks.
    It has an extra third bedroom (but is basically 1 bedroom split into two, with entry to the second via the first) and does not have a lean to utility room that the first house does. Would it be unwise to use the other house during negotiations for example, I am interested in a second property which is very similar but at 90k has w, x and y which would cost me around z amount to get this property to a similar standard.
    Originally posted by Posiex
    So second house has
    - No drive
    - Smaller garden
    - No utility room
    - Dodgy 3rd bedroom

    Yeah, I can see why you think it's identicial to the first

    If I was the seller I would dismiss you straight away and ask the EA to accept no further offers. You have the potential image of someone that will wait till exchange and drop their offer considerably.
    • hazyjo
    • By hazyjo 21st Oct 19, 12:58 PM
    • 12,480 Posts
    • 17,105 Thanks
    hazyjo
    ...isn't it normal for there to be penalty fees for overpayment? If so, isn't it better to put more cash (which you say you have) down in the first place and apply for a lower mortgage loan?
    Originally posted by kdotdotdotdot
    Usually you can pay off around 10% of the remaining sum yearly (to the best of my knowledge). Obviously they're not all the same, but that's been standard on all or most of my mortgages.
    2019 wins: Bottle of Prosecco; Popcorn Shed popcorn; Moisturising 'M&S Time Capsules'; Case of Boost Sport + £30 Just Eat voucher; Battle Proms tickets and hotel; under-eye serum...

    "Should know better." Apparently.
  • archived user
    Hello everyone, thanks so much for the feedback. I definitely fit into the category of over thinker and the limited info about local house prices due to few of the "recent" sales having the price become public yet has me worrying that the price is worth a lot less than guide price and I don't want to go so far over my budget if the house isn't worth it. The issues that I noticed with the property made me feel like the owners hadn't really done anything to the property since they bought it and perhaps it has been neglected and may need expensive repairs. As suggested by another member a survey would show that up and I could then negotiate to lower the price.

    Quite a few similar properties have sold within the last year in the general area at a lower price, mostly still advertised as sold STC some having been marketed 6-9 months ago, so I don't feel like it's a fast market or popular area. The property most like it with an identical footprint and slightly bigger SW garden about 10 houses down sold STC with an advertised asking price of 75k. Unfortunately the actual sale price is not yet public. 2 other properties sold on the same Street within the last year. One is a semi with bigger SW garden but no lean to and new kitchen and bathroom for 88k, the other is a mid terrace but oddly has a bigger drive and bigger SW garden, new kitchen and bathroom for 90k. Based on that I think it's not worth near the 95k guide price. I think it's worth 87k, I might be pushed to 89k just for the sake of getting on with the move and not farting about looking at more etc.

    After viewing if I still prefer this one over the other I will offer what I think it's worth and they either accept or not and if survey/valuation shows up problems then worry about that then.

    As for the question about why I would choose this over the other (I may actually prefer the other after viewing) but it boils down to feeling like I was at home in the house and seeing myself living there. The more I thought about it the more I wanted it and felt like it wasn't so important that it be as new and modern as the other.
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