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Making/negotiating offers on a property


GarethRDR
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Howdy folks!

As I have bleated on numerous occasions of late, the missus and I are entering the scary world of homeownershippingness. Very intimidating, very pricey et cetera. I know a number of the VT collective are quite savvy on this subject, so I was just looking for some guidelines/advice on the do's, don'ts and what-the-****-where-you-thinking's of making and breaking deals on buying a house.

At the moment, we've found a property we quite like on the market for £139950. It needs some cosmetic work (loose stair bannister, recently plastered living room, poorly tiled bathroom with bath missing a side panel) but nothing major, we're in a position to go through the process quite quickly (only have to serve one month's notice on our current tenancy, already have our agreement in principle, deposit's sat in the bank and ready to go) and the owner needs to sell quickly (we have been told by the estate agent that he "appreciates that we are in a very strong position", whatever that means).

We've gone in with our initial offer of £126k which was rejected (as expected), and we were told by the agent about an hour ago that the seller was looking for £133k. They asked us what our maximum is, and I said (whilst laying it on a bit) that if we moved some things around, talked it over and crunched some numbers (yes, I used that actual phrase and instantly felt like a tw*t; I'm sorry) we might be able to stretch to £130k.

That isn't too far from the truth to be honest, we would/could happily afford go to £130k if we had to but we really can't push it much beyond that and were hoping we could even shave a little bit off (unfortunately, we'll be above the stamp-duty threshold now the holiday has been cut short for first-time buyers :bang:). The agent asked if they would like to forward this offer on to the owner, and I said not at the moment. I told them though we do like the property, we'd need a couple of days to think things over during which we have a number of other viewings anyway (again, truth here; not bullshit). I did say I would be in contact again in 2-3 days to let them know our decision (which will naturally be to make a second offer).

I guess my underlying question is this; what should I offer? I've heard conflicting things on negotiating tactics from various people. When my folks bought their current house, they started off with a offer 10% below the asking price, then when it was rejected rather than up the bid went back in with a lowball which was subsequently accepted.

As much as that appeals, I'm not sure I've the cojones for such gamesmanship (though if we went back with £125k and it was accepted, we would save a small fortune as we'd be back under the stamp duty threshold). I'm not sure I want to go straight back in at £130k, as I don't want to then meet the seller between that and £133k so my gut instinct is telling me my next offer should be a simple increase of a thousand up to £127k.

I know that a wall of text isn't nice for anyone to read, and at first glance this thread may not appear very engaging, so I've created a visual interpretation of my current dilemma for the layman.

My%20Dilemma-1.png

So, VillaTalk; what say you?

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Do not go back in at £130k

Go for £127,500 or £128,500

It's good to get them to an odd number like that because then you're negotiating over less. It also makes it look like you really are doing your sums.

Be prepared to go up to £130k, but going back in at £127,500 will help to convince them that you're not bullshitting that 130 is your limit (and the agent will undoubtedly of told them that)

If they've admitted they'll take £133k, I'm pretty sure you'll get it for £130.

Find out if there's anyone else bidding on it. If not, then you're in a strong position. Don't be afraid to make them wait. If/when they reject £128,500 the agent will probably ask if you want to up your offer. Tell them not at the moment but you may be back in touch.

I would then (assuming they don't buckle and take it) wait a day and go back in with £130k

Make it clear to the agent that that really is your final offer as that is the absolute highest you can go.

If/when it's rejected, thank the agent but say you're afraid that really was the highest you could go. You want to make it look as if that really is all you're going to offer.

Leave it a while, I'd wager the guy will come back and accept it. If after a day or two he hasn't then you're free to up it if you want to or can afford to.

I got my house for £131k and it was on the market for £140k so I've been in pretty much the same position. I did basically as above.

My final offer was 131. When he phoned me and sai "She can't come any lower than £133k", I just thanked him and said I couldn't go any higher.

Within half an hour he'd phoned back to accept.

BUT, if there are other people bidding then the above is very dangerous. That kind of throws all that out of the window.

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I agree with Stevo's post.

Just beware that its a dangerous game if someone else who has viewed it suddenly comes in with an offer, so don't stretch it out too much in terms of time between offers.

I'd go with £128,500 which is £2.5k higher than your previous offer, but only £1.5k away from the £130k.

so then if you have to go in with another offer at £130k, your increasing by £2.5k, then £1.5k.

Of course, £133k might really be the minimum they'll accept, but i doubt it.

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Yep, remember they'll be playing the game too. If they've said the minimum is 133, it almost certainly isn't.

That's why you shouldn't go straight back in with 130. That'll convince them you can go higher (whether you can or not) and they'll hold out. They won't have that feeling that it's that or nothing. That's why you need to partake in the panto to make sure they realise that is your ceiling, and if they don't accept 130 when you get there, they're back to square one.

But, obviously, that's also why it's dangerous if someone else comes in.

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Sounds obvious but you have to remember that they want to sell their house whilst you don't necessarily have to buy theirs. Just because you like their property, doesnt mean you have to let them "win" to get it. Make sure they know you're happy to walk away if you don't get the price you want and give it plenty of time between offers to ensure you don't look too keen.

I went through it all 18 months ago and it was horrible, getting our hopes up on a property only to miss out but I couldn't be happier with the property I finally got. Good luck with it.

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If you have your mortgage offer in place and you are ready to go as a first time buyer they'd be **** nuts to let you walk.

Go back in £500 over your previous offer and say you like the property but Mrs G likes the one you looked at last night and that you have final.say but the price has to be right.

If you BS as well in person as you do on VT you'll be fine mate.

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In a way. BUt then again the agent will just want to sell the house. If it's between accept gareth's offer or not selling the house, the agent will be encouraging the seller to sell.

But that's why Gareth needs to play the game with the agent as well as the seller, if that makes sense. The agent needs to know that 130 is your ceiling.

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  • 1 month later...

Avoid. **** all resale value and you can't polish a turd.

Its all.about location. Buy the worst house on the best street you can afford. You will only ever get your money back or improve it as you improve the house.

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Just to come back to this, what if the resale wasn't a massive concern? Basically, we've seen a place we really liked, it's huge, it's nice, it's cheap, we'd happily live there for decades and fears over the usual problems associated with prefabs have been assuaged by a neighbour who lives in the same build of property who fortunately we happen to know.

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