House Buying - Moneysaving Tips

AndrewSmith · 11 April 2006 at 7:20PM

skyeslimit11 wrote:

I just wiondered, when it says
"An example of 'the norm' would be something like an asking price of £120,000 with your opening offers beginning at £105,000 - £108,000"
what would be an not-so-low-as-to-embarrass-everybody-concerned offer on a more expensive house - say a 400K house for example? Is there a percentage thats a good guide, or a fixed amount of like 15K-20K thats sellers expect as an offer?

We're about to buy our third house but its nevr been an issue for us before - our first house we bought as a new build with a fixed price and our second we got into a bidding war so ended up paying almost ful asking price (regretfully) - don't want to get it wrong this time!

Thanks!

Hi,

It really does depend on the situation you are in as to how seriously your offer will be taken.

Assuming you are in a proceedable position, and judging from experience I gained from 8 years in an estate agency, opening offers on a £400,000 house would usually be in the range of £360,000 - £375,000. Remember that this would be an opening offer to show that you are interested. After all you don't really want your first offer to be accepted else you will always be thinking you could have got the house for just that bit less.

Don't forget, the worst that will happen is they say no, try again.

Hope this helps

Andy

AndrewSmith · 11 April 2006 at 7:25PM

general_dogsbody wrote:

What about making offers on a property that has just come onto the market? Obviously the vendor will be less inclined to accept lower offers, but whay sort of offer would be "reasonable" in these circumstances?

Again, without sounding like a broken record, it depends on more than just the figure you put in.

The vendor may be up against it having seen a house they like and need a quick sale, in which case take a punt on a cheeky offer. You just never know.

This is why I always recommend that you gain as much knowledge about the situation of the vendor and the upward chain before making your offer. If there is a closed chain above them then they will be more receptive to accepting a proceedable offer below the asking price.

As for how much you should offer? Well that is up to you but I always think that you should begin around 90% of the asking price, which represents a reduction of £10,000 per £100,000 asking price. You would be unlikely to get any more than that off bearing in mind that property prices have not rocketed of late and the vendor will have a certainlevel to achieve to make the move possible.

Hope this helps

Andy

slane · 11 April 2006 at 9:32PM

It's good to get advice on how low to go with the first offer - we too are looking at houses around the £400k mark and I sometimes worry we are being rude if we offer too low.

Just wanted to add, in getting more background info about the seller's position, we've found it useful to find out how much they paid for the property. This can give you room for negotiation if you know they got a real bargain and are now trying to sell for a much higher price. If you register with Rightmove you can get sold prices for the last five years free, otherwise they are quite cheap from the land registry website, about £2 I think.

Sulli · 11 April 2006 at 9:56PM

One thing I have found is that estate agents fees are ALWAYS negotiable. We have just sold our house, and most agents quoted fees of between 1.5% and 3.5% plus VAT!! that would've equated to between something like £2.5k and over £5k.
To me, a few ads in the paper, some phone calls, and interrogation of a mailing list, that's an awful lot of margin. OK, so most agents do more, some don't, and many houses will sell themselves.
What we did, was get loads of quotes, then play them off against eachother, using the newer agents with their generally lower fees to negotiate the more established agents down. Some would not move, others (3 in total) equalled our lowest quote for a fixed fee, which equated to approx. 0.75% of the sale price! Also, we insisted on no tie-in at all. Most tried to argue against this, I said i'd walk away and they caved in.
Our first agent, a new one, was very very poor - the draft particulars had to be almost completely re-written by me, my 2 yr old has better grammar, and they were very inaccurate. There were other issues so we binned them and went to the next one, who proved to be excellent, and has done the job. I am happy to pay them their fee, and will even give them a bonus when we complete. The amount they've spent, and what i'll pay them still leaves them with a great profit. Agents just rely on gullible people accepting their inflated rates, as most of them keep them unfairly inflated.

The house we sold 3 and a half years ago, we managed to find a new agent offering a fixed fee of £150!!! All you had to do was go to them for a mortgage quote. I smelt a rat but looked into it. We ended up going with them, as i'd sourced an excellent mortgage myself they didn;t even pursue us for them to quote us, and we sold within 2 months. And yes, all it cost was £150!!! They upped their intro prices to £600 soon after, and a mate of mine sold with them - again, they did a great job. Unfortunately, they now just focus on mortages - shame.

Finally, in my opinion, a lot of the psychological stuff people talk about regarding the offering process, depends entirely on the vendor (and to a small extent their agents advising them). If it's decent, reasonable people selling, then sometimes as much as the money, who they sell to matters. Be nice, be honest, and approach them directly on occassion - we did, and it meant us getting our dream house, just by being nice, and honest - it could've gone to auction, and they'd have probably got a few moew £k, but as we'd been nice and spoken to them directly, they went with us. It's nice to be nice, always pays in the end. Don't try to be too clever.

Jorgan_2 · 18 April 2006 at 10:13AM

As an EA I think there is a lot of good advice in this thread. Can I just add a simple piece of advice to any buyer, be they a first timer or a seasoned hand at the process, keep in touch with your solicitor & agent. Find out how soon they expect surveys, searches etc to be done.

You would be amazed how many people go away on holiday & don't notify their agent, solicitor or mortgage broker. You end up with a stressed vendor wanting to remarket their property because the solicitor/agent has been unable to make contact with the buyer to ask them a simple question. The vendor assumes no answer from the buyer means they have withdrawn from the purchase & nobody else knows what is going on.

V15H · 23 April 2006 at 3:17PM

I am a student looking to buy a small flat for an investment. I have saved up enough for a 10% deposit or so, but how am i ment to get a mortgage, i'm onny a student so dont earn a salary... does this mean i'd have to wait until after university, (I'm currently on a placement)

Bumpers_2 · 3 May 2006 at 9:07PM

And another question,;)

We are looking into buying our first hourse together, we hae a very tight budget, and are trying to work out everything we should do.:rolleyes: :rotfl:

We have found a house, and are checking on the morgage on Friday. But I would like to know what searches we should have done before we buy etc

We know we need to get a solicitor, but I wondered if someone is capable of letting me know the basic must do's!????

also.. what is an OK range in price for what the solicitor will do? I know this will differ but just as a guild line? And What will the solicitor do?

The house we are intereested is advertised at just over 99 so we plan on offering 90? would this be ok? Its close to our budget.. but not compleatly max...??

Property_Magnate · 4 May 2006 at 4:08PM

There is some good advice on these pages and I offer some alternative words here:

http://forums.moneysavingexpert.com/showthread.html?t=184592

Research. Research. Research!

The best way to save money on property is in the price you pay. As a rule of thumb, for every £10,000 you borrow, you will pay back around £20,000 at average interest rates. Think about it. Negotiate and you can save, what for many, is more than a year’s salary.

Know your local market. Despite National price increases many regions have seen falls of 5-10% over the year. Simply offering 10% below the asking price is exactly what Estate Agents expect so they price accordingly. If there are buyers queuing up to buy then there is little room for negotiation. In a buyers market use the various free websites to find out selling prices going back to the year 2000. Don’t be afraid to offer 20-30% below the current asking price. Andrew Smith is right when he says the worst that can happen is that the vendor says no.

Be aware that interest rates are on the rise globally and the case for rising rates in the UK is getting stronger. Rates are at historic lows at the moment so don’t expect that to last. Ensure you future circumstances will allow you to afford increased monthly payments.

northern_munky · 13 May 2006 at 1:47PM

AndrewSmith wrote:

As for how much you should offer? Well that is up to you but I always think that you should begin around 90% of the asking price, which represents a reduction of £10,000 per £100,000 asking price.

Would this also apply to new builds as well? I am interested in a flat in a converted mill, they aren't ready till summer though. The price of the flat is £96K do they expect the full asking price, or should I offer £87-90K

AndrewSmith · 13 May 2006 at 2:15PM

WHy not make an offer?

Whats the worst that can happen? They may say no.

Go for it.

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House Buying - Moneysaving Tips

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