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  • FIRST POST
    • Doozergirl
    • By Doozergirl 31st Mar 06, 2:19 PM
    • 28,024Posts
    • 74,436Thanks
    Doozergirl
    House Buying - Moneysaving Tips
    • #1
    • 31st Mar 06, 2:19 PM
    House Buying - Moneysaving Tips 31st Mar 06 at 2:19 PM
    Official MSE Insert:

    If you've arrived from Google, our fully researched House Buying Tips may help.

    Back to the original post...


    I have (even if I may say so myself) some excellent tips on how to negotiate with the Agents when looking to offer what you want to pay for the property
    by AndrewSmith
    We have the “House Selling – Money Saving Tips” guide, but I have realised that we are sorely lacking in the House Buying equivalent.

    There has already been demand from some users for AndrewSmith (Independent, Whole of Market Mortgage Advisor to the Stars) to deliver his top tips on how to negotiate with agents. So as per his offer on a separate thread, he has accidentally volunteered himself to start the ball rolling on what I am sure will be a very popular thread.



    (drum roll)
    Last edited by Former MSE Zorica; 05-02-2014 at 4:32 PM.
Page 1
    • AndrewSmith
    • By AndrewSmith 31st Mar 06, 3:33 PM
    • 2,830 Posts
    • 2,238 Thanks
    AndrewSmith
    • #2
    • 31st Mar 06, 3:33 PM
    • #2
    • 31st Mar 06, 3:33 PM
    Thanks Doozergirl, must learn to keep my mouth shut sometimes, a point that I am sure Martin himself will gladly welcome

    So, how to sucessfully negotiate with an agent or seller on the property you want, and how to get it for the price (or as near to it) that you want.

    Selling or buying a house is ranked amongst one of the most stressful things that one will do throughout their lives. Think about it, you are talking about something that will be where your family memories and possibly members will be born and will bear special meaning to different people. Needless to say it is an immotive time at best.

    I do not have all the answers, no-one does as it will vary from property to property, and person to person.

    What I can offer however are some tips that I have picked up and still use from the 8 years I spent sat as a broker in an estate agency office.

    1) Know Your Budget
    Sounds obvious but there are buyers out there today who have no idea how much it is likely to cost them to buy a home, or what they can afford. Work out what you have coming in, and what you can afford to spend each month including all the household bills.

    2) Know What You Can Borrow And It's Cost
    This goes hand in hand with the above. If you aim at nothing, you will hit nothing. Visit or speak to a broker to establish what you are able to borrow, how it works, what's involved and how the costs will fit in with your monthly spending budget. This is the point at which you will know whether your plans are, in fact, do-able.

    3) Get The Funding In Place
    If taking a mortgage, get an agreement in principle or mortgage promise from the broker. This will be invaluable when you come to actually begin bidding on a property as you will be taken far more seriously by the agent and seller if your finances have already been agreed. Never forget though that an agreement in principle is only as good as the information you provide to obtain it. Be honest from the start and it will prove worthwhile. Make sure that you have the necessary funds inplace for the deposit, mortgage fees (survey etc) and, as I will move on to, the Legal fees.

    4) Get 3 solicitors quotes and decide which one you will use in preparation
    Get at least 3 solicitors quotes based on the figures and budget worked out with your broker. I always suggest 1 Local firm, 1 Distant firm, 1 online form. See how they compare but remember that cheap is not best. Paying a little more could make the difference between a swift trouble free transaction, or having a solicitor who leaves your case till 'tomorrow'. If yu have the solicitor firm in mind, it will benefit you again when bidding.

    5) Make Yourself Known To The Agents
    Call the agents on a regular basis. On the desk of every decent sales negotiator there will be a small index card box called his 'hot box'. This is a list of people, usually first time buyers who are looking for property and are ready to proceed. Your aim is to be at the front of his 'hot box'. This requires a certain amount of persistance on the part of you and your broker. Call the agents at least once if not twice a week. Ask if there are any new properties on their books, have any sales fallen through. Get your broker to call and tell the agents that you rmortgage has been approved (in principle) and you are now keenly looking to move ASAP. Don't however let your broker tell the agents how much you can afford. Keep the pressure on the agent to find you somewhere, once they know you are serious you will be the first one to get a call when they have a new instruction.

    6) Finding The Property
    Once you have found the property you like, never seem over eager to the agent initially. View it more than once at different times of the day. What seems like a quiet suburban street at mid-day can become a rush hour ratrun at 4.30. The first time you view will be with your heart, the second time will be with your wallet. On the second viewing make sure it is in the evening after the agent has closed. This will allow you to be unhurried and have the current owner on hand to get honest answers to the inevitable questions you will have. The remainder of this bit is, Im afraid, down to you as you are the only one who knows what you are looking for.

    7) Pre Offer Information
    Before considering what to offer you need to find out as much about the situation of the seller as possible. Find out if they have found a property. Is the chain above you complete and how long is it. How stable is the chain and how well established is it. Are there any other viewings booked or other offers on the table? Do you think there is any wor needing doing to it? Armed with this information you will then be able to present yur offer in the best possible light to the agent and seller. After all the name of the game is giving the seller what he wants, and that is allowing him to move upwards. It is not always about finances alone.

    8) Submitting The Offer
    There are many different schools of thought as to how much you should offer on a property. Never forget that the seller will have a level he needs to achieve to make his move possible, and that he will not have seen blistering increases in the value of his own property, which will reduce the available room for manouver.

    This is where i personally take over for the buyer and begin submitting offers to the agent on their behalf. The offer must be presented confidently and with supporting information. Example:
    " Mr & Mrs x have decided that the property 'x' is the one they wish to purchase. They have their funds in place with the mortgage agreed in principle, and are in a position to instruct a solicitor immediately upon the offer being accepted. They are in an excellent position and can close the chain above and get it moving swiftly. Bearing that in mind they wish to offer 'x' subject to the following conditions.
    All future and current viewings are cancelled
    The property is withdrawn from the open market immediately and they have exclusivity over it
    The sold board goes up within 48 hours
    They receive weekly updates on the progress of the chain.

    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.

    9) Know Your Limit
    Always keep in mind the amount you are prepared to pay for the property. Increase your offers by small increments say 500-1000 on a value as above. The worst they will say is no. This is the point where it is actually better to ask your broker to bid for you as they agent is then less likely to try to play any 'games' to increase the price. If you are offering yourself it is better to go into the agency office and place the offer in person. You are then more likely to actually witness the offer being put forward to the seller and there will be less likelyhood for mis-trust. It also helps build rapport with the agent.



    If you are seen by the agent as serious, they will take you seriously. If you overcome the potential problems such as cost, mortgage etc before you even look, again you will be seen as serious about buying.

    Build a relationship with the agent who is selling the property you wish to buy. You want your name to be at the forefront of his mind when he is on his way to value a property suitable. This way you may even get to view it before it goes to the open market.

    Once the offer is accepted it is then down to you to fulfill your side of the deal. Instruct the solicitor without delay and get your broker to submit the full mortgage application without delay.

    A good broker / solicitor will hold your hand until the day you move in.

    This is not a definitive guide and I will add to it when i think of more ideas. However the basic model is something that I have used with all my clients and has, until now, proved very successful.

    Hope this helps and apologies for the length of the post

    Andy
    • AndrewSmith
    • By AndrewSmith 31st Mar 06, 5:05 PM
    • 2,830 Posts
    • 2,238 Thanks
    AndrewSmith
    • #3
    • 31st Mar 06, 5:05 PM
    • #3
    • 31st Mar 06, 5:05 PM
    There you go Doozer. Hows that?

    Andy
    • Doozergirl
    • By Doozergirl 31st Mar 06, 5:58 PM
    • 28,024 Posts
    • 74,436 Thanks
    Doozergirl
    • #4
    • 31st Mar 06, 5:58 PM
    • #4
    • 31st Mar 06, 5:58 PM
    There you go Doozer. Hows that?

    Andy
    by AndrewSmith
    I think the number of Thanks you've had in the last two hours speak for themselves.

    But, for the record, I especially like the bit about using an intermediary (like you!) to make the offer or to do it in person at the Estate Agent's office. Should make things a lot clearer for a lot of people.

    You're a star for stepping up to the challenge - I wasn't sure how you'd react!

    Board Guides, make it a Sticky!!!
    • Joe_Bloggs
    • By Joe_Bloggs 31st Mar 06, 7:27 PM
    • 4,493 Posts
    • 1,583 Thanks
    Joe_Bloggs
    • #5
    • 31st Mar 06, 7:27 PM
    • #5
    • 31st Mar 06, 7:27 PM
    @Andrew Smith.
    Thanks for that concise guide. How about these suggestion or something along the lines:-

    Check your files with a credit reference agency. Correct any mistakes.
    Do what you can to increase your credit worthyness.
    My Experian file had seven different addresses when I had only lived at two.
    Many lines of credit appeared to be open when they had been closed for years. I'm sure a credit check is part of the broker service,as is handling poor credit ratings. If a preliminarysearch is done before it can save time and the corrections can be put in place. I could be wrong but it is what I did.

    Get together an upto date collection of documents and facts regarding employment dates and similar stuff relevant to a mortgage application and ID check. I've no idea what these documents are but I'm sure a P60, passport and utility bills are better than a P45 and library ticket.

    Many people choose to have online statements for banking,services, credit cards, even mortgage payments. My previous lender refused to send a mortgage statement out as 'it was only done once a year'. My new lender would not accept a redemption quote as a mortgage statement. These were 'only handled by the solicitors'. In the end they examined my current account, for regular mortgage payments. I'm sure non of this would have happened if I had used a broker.

    J_B.
    • AndrewSmith
    • By AndrewSmith 31st Mar 06, 7:51 PM
    • 2,830 Posts
    • 2,238 Thanks
    AndrewSmith
    • #6
    • 31st Mar 06, 7:51 PM
    • #6
    • 31st Mar 06, 7:51 PM
    @Andrew Smith.
    Thanks for that concise guide. How about these suggestion or something along the lines:-

    Check your files with a credit reference agency. Correct any mistakes.
    Do what you can to increase your credit worthyness.
    My Experian file had seven different addresses when I had only lived at two.
    Many lines of credit appeared to be open when they had been closed for years. I'm sure a credit check is part of the broker service,as is handling poor credit ratings. If a preliminarysearch is done before it can save time and the corrections can be put in place. I could be wrong but it is what I did.

    Get together an upto date collection of documents and facts regarding employment dates and similar stuff relevant to a mortgage application and ID check. I've no idea what these documents are but I'm sure a P60, passport and utility bills are better than a P45 and library ticket.

    Many people choose to have online statements for banking,services, credit cards, even mortgage payments. My previous lender refused to send a mortgage statement out as 'it was only done once a year'. My new lender would not accept a redemption quote as a mortgage statement. These were 'only handled by the solicitors'. In the end they examined my current account, for regular mortgage payments. I'm sure non of this would have happened if I had used a broker.

    J_B.
    by Joe_Bloggs
    Thanks for that.

    It never hurts to carry out a simple credit search on yourself however just make sure that you dont do it too often.

    Prior to my initial meeting with any client I always ask them to provide the following:

    Driving License
    Passport
    3 year address history
    3 year work history
    3x payslips (latest)
    Latest p60
    last 3 bank statements
    Current mortgage details / original offer
    details of any outstanding loans/credit
    details of any credit problems in the past 6 years

    You are right though, some lenders will not accept internet screen dump bank statements, however many are now becoming more flexible on this. It really depends on the overall case.

    Cant say whether it would have happened via a broker or not but the chances are that the broker would have made an asessment of the case before submitting it and is likely to have already asked you for the documents.

    Yes I can indeed carry out credit searches for my clients however there is a charge currently of 8.95 to get and instant equifax report. If you feel as a client there is need to do this then it is a good idea, however there are cheaper ways of getting the reports, you just have to wait longer.

    Andy
    • Pal
    • By Pal 31st Mar 06, 8:15 PM
    • 2,062 Posts
    • 731 Thanks
    Pal
    • #7
    • 31st Mar 06, 8:15 PM
    • #7
    • 31st Mar 06, 8:15 PM
    Apologies to everyone for deleting all the chatty posts but I think this thread is great, and wanted it to start off on a "serious" moneysaving footing.

    Thanks doozer, you are a pal.
    by AndrewSmith
    No, she most definitely is not.
  • coryfranks
    • #8
    • 5th Apr 06, 3:49 PM
    • #8
    • 5th Apr 06, 3:49 PM
    Trust me this tips are right on, I didn't follow a a couple of them when I bought my house last year and I am struggling now
    working on a sig.... Check out The No Cent Store for free samples
  • skyeslimit11
    • #9
    • 11th Apr 06, 4:57 PM
    • #9
    • 11th Apr 06, 4:57 PM
    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!
  • skyeslimit11
    Bit of an afterthought:
    Also is it always assumed that your first offer, unless you say otherwise, is just sort of setting the stage an that'll you'll almost certainly come back with a higher offer after?
    i.e. Is it ok to turn down an offer on your house that was almost ok to you, presuming they'll come back with a higher offer, or is it risky?
  • general_dogsbody
    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?
    I saw a light at the end of the tunnel - but it was just a guy with a torch bringing me more work...
    • AndrewSmith
    • By AndrewSmith 11th Apr 06, 7:20 PM
    • 2,830 Posts
    • 2,238 Thanks
    AndrewSmith
    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!
    by skyeslimit11

    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
    • By AndrewSmith 11th Apr 06, 7:25 PM
    • 2,830 Posts
    • 2,238 Thanks
    AndrewSmith
    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?
    by general_dogsbody

    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
    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
    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
    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
    Any Answers anyone
    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
    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:

    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? :confused:

    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...?? :confused:
    Dept free in 3 years 11 months

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  • Property Magnate
    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
    • By northern_munky 13th May 06, 1:47 PM
    • 475 Posts
    • 170 Thanks
    northern_munky
    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.
    by AndrewSmith
    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 :confused:
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