House price negotations

NotAGolf · 9 Feb 2011 at 14:17

House price negotiations

Yes another house/mortgage question I'm afraid!

I've seen a house I like, done our research on it, got a solicitor lined up and a mortgage in principle all ready. So now I'm thinking of putting an offer on it.

So my question is, what's the best way to go to do this, and how do I approach it?

Is it best face-to-face with the estate agent, a phone call, or email/letter so you have it in writing?

The house is up for 225k, which I don't believe it is worth, and I am not willing to go up to. I think the house is worth around ~215k, and I think this would be my maximum.

I was thinking about putting an offer in for 200k to start with, then maybe go up to 205, 210, then final offer of 215 if it comes to it. Does that sound reasonable?

On our side, we are FTB so can move instantly and have everything lined up ready, although this may not be a massive factor as the house has been for sale for 4-5 months and hasn't dropped in price so I don't think she's in a massive rush. About 5 or 6 properties that are exactly the same size have been sold in the last 3 years, all below the asking price of 225, with an average of 205k. She herself bought it only 18 months ago for 195k. Work has been done on it (new flooring, boiler, wiring), but I don't think enough to warrant a 30k increase, especially as the housing market has been fairly flat so I don't think the house itself has increased in value much either.

The estate agent said she's had offers but were too low for her, and according to the EA, she's not going to negotiate too much and wants near the 225k (although this could be a load of bs).

So what's the best way to way to approach this? Do you explain your offer at all and back it up with the above info or just slap down 200k and say nothing? Or maybe mention some of it on the first offer, then some more on the second etc?

Sorry for all the questions!

Abraham · 9 Feb 2011 at 14:20

you just phone up, say you want to make an offer and give them the figure. They are obliged to pass the offer on to the vendor, and give you a response.
It is as simple as that, if it's rejected then you can say you want to put another offer of x in.
Strictly speaking the estate agents can't give you details of other offers, but they might drop hints, at the same time those hints could be just to push you into a higher price etc = higher commission.

Pestilence · 9 Feb 2011 at 15:13

If there's one thing you should know, it's that estate agents are lying scum. Don't listen to a thing they say.

All you have to do is ring the agent, give them a figure, and leave them to it. Don't argue, discuss it, or attempt to justify the amount you've offered.

Go in first with £197k.

You'll probably be called back within 20 minutes with a refusal -- during which time the agent probably set the phone down, twiddled their thumbs, then called you back to say the vendor refused.

You then say that you need to think about it further, and will get back to them.

Around and hour or two later, call them back and offer £205k. It might take them a little while this time as they'll actually check with her.

If it's a refusal, tell them that you're not willing to go higher at this point in time, as there are other properties you're interested in that you wish to go begin negotiations on.

It's a given they'll then call you repeatedly over the next couple of days to see how you're feeling about it. Drag it on, telling them you haven't exactly given up, but things are looking good and not progressing so slowly on a different property at a similar price.

If they haven't relented, tell them (flippantly during the conversation) that the last you'll be willing to jump to on this one is £212k, if they can guarantee a quick turnover of the property.

Job done. Or, you walk away at this point because she's a stubborn bitch.

DM · 9 Feb 2011 at 15:37

I never bother with all that rubbish, put the offer in you want to pay and thats that.

If they dont bite, move on to the next house.

Street · 9 Feb 2011 at 16:10

DiamondMark said:
I never bother with all that rubbish, put the offer in you want to pay and thats that.

If they dont bite, move on to the next house.

This. I ended up losing out on a few houses I put offers in for because the people were greedy. Some of them needed a lot of work doing and really weren't worth the amount they were up for but the people wouldn't budge! Finally ended up with one for a decent price though!

Morba · 9 Feb 2011 at 16:17

DiamondMark said:
I never bother with all that rubbish, put the offer in you want to pay and thats that.

If they dont bite, move on to the next house.

If the local market was such that you needed to get an offer accepted asap then I'd agree, but this house is going nowhere fast so it might be worth trying to get a bit more off.

MatteH Oxford · 9 Feb 2011 at 16:20

Check out the land registry to see what it's sold for previously (unless it was a new place when they moved in of course).

May I also recommend:

http://www.propertysnake.co.uk/

http://www.property-bee.com/

eatcustard · 9 Feb 2011 at 16:29

DiamondMark said:
I never bother with all that rubbish, put the offer in you want to pay and thats that.

If they dont bite, move on to the next house.

Bad advice, is bad

Start low work up to your max, you may get it for less than you think

but dont put your best offer in for a few days, to to make them sweat a little

DM · 9 Feb 2011 at 16:30

eatcustard said:
Bad advice, is bad

Start low work up to your max, you may get it for less than you think

but dont put your best offer in for a few days, to to make them sweat a little

Righto. I absolutely 100% guarantee iv bought more houses than you have had hot dinners and the number of times the low ball offer works, its not worth the 27 phone calls and ****ing about.

cm1179 · 9 Feb 2011 at 16:33

mpledge52 said:
The house is up for 225k, which I don't believe it is worth, and I am not willing to go up to. I think the house is worth around ~215k, and I think this would be my maximum.

you've answered your own question. 202 has a nice ring to it, don't you think?

aardvark · 9 Feb 2011 at 16:34

Pestilence said:
If there's one thing you should know, it's that estate agents are lying scum. Don't listen to a thing they say.

All you have to do is ring the agent, give them a figure, and leave them to it. Don't argue, discuss it, or attempt to justify the amount you've offered.

Go in first with £197k.

You'll probably be called back within 20 minutes with a refusal -- during which time the agent probably set the phone down, twiddled their thumbs, then called you back to say the vendor refused.

You then say that you need to think about it further, and will get back to them.

Around and hour or two later, call them back and offer £205k. It might take them a little while this time as they'll actually check with her.

If it's a refusal, tell them that you're not willing to go higher at this point in time, as there are other properties you're interested in that you wish to go begin negotiations on.

It's a given they'll then call you repeatedly over the next couple of days to see how you're feeling about it. Drag it on, telling them you haven't exactly given up, but things are looking good and not progressing so slowly on a different property at a similar price.

If they haven't relented, tell them (flippantly during the conversation) that the last you'll be willing to jump to on this one is £212k, if they can guarantee a quick turnover of the property.

Job done. Or, you walk away at this point because she's a stubborn bitch.

this.

and don't forget, if you aren't embarrassed about your first offer then it isn't low enough.

DM · 9 Feb 2011 at 16:36

aardvark said:
this.

and don't forget, if you aren't embarrassed about your first offer then it isn't low enough.

That worked for you much has it? Tell me because im intrigued, what exactly is the point of a bid you know wont be accepted?

SlyReaper · 9 Feb 2011 at 16:41

No, don't play silly buggers with it. Start at about 10k to 15k below your target price and work up. Don't lie about looking at other properties.

eatcustard · 9 Feb 2011 at 16:42

DiamondMark said:
Righto. I absolutely 100% guarantee iv bought more houses than you have had hot dinners and the number of times the low ball offer works, its not worth the 27 phone calls and ****ing about.

Its worked for me on every house I have purchased.

I could not care less if it takes 1 phone call or 50, If I save a few £ then I am happy.

Slam62 · 9 Feb 2011 at 16:44

DiamondMark said:
I never bother with all that rubbish, put the offer in you want to pay and thats that.

If they dont bite, move on to the next house.

I'd agree with this, but go in really low, make sure they want to sell.

Don't waste time on anyone who isn't desperate to sell.

Slam62 · 9 Feb 2011 at 16:45

SlyReaper said:
No, don't play silly buggers with it. Start at about 10k to 15k below your target price and work up. Don't lie about looking at other properties.

Why would he lie, he would be stupid not to look at other properties.

Slam62 · 9 Feb 2011 at 16:46

DiamondMark said:
That worked for you much has it? Tell me because im intrigued, what exactly is the point of a bid you know wont be accepted?

the only point would be to find where the real lower limit is.

eatcustard · 9 Feb 2011 at 16:52

DiamondMark said:
That worked for you much has it? Tell me because im intrigued, what exactly is the point of a bid you know wont be accepted?

If I offer for example £195k

Agent/owner may say, they will not take anything less than £210k
So now you have the price they want.

Diamond,
I wonder how much over the odds you may have paid, on all your houses you have purchased.

MatteH Oxford · 9 Feb 2011 at 16:54

eatcustard said:
Diamond,
I wonder how much over the odds you may have paid, on all your houses you have purchased.

Perhaps it was that bird off 'location x3' that did the bidding for him?

Pestilence · 9 Feb 2011 at 16:56

It's also pretty much common knowledge that the first offer is never accepted. Hence "going in with an offer you know will be refused", and keeping it low in doing so.