Going To Close

[south_side_sceptic]

After watching the market but not viewing for over a year I've finally found somewhere I want to buy. This is a public forum so forgive me if I don't go into specifics.

It is going to close in the next few week or so and I am not the only person to have noted interest. It is on at that most annoying of new phrases "offers around".

I'm looking for opinions on tactics. To my mind in the current market I have 3 choices

1. Offer slightly above the offers around price to get it

2. Offer the offers around price and stress the fact I'm not in a chain, the current mortgage market requirements are not a problem and I could agree to as soon a date of entry as they require. Fingers crossed my circumstances might give me the edge even if the other offers are a touch higher

3. Offer the number I originally had in my head, and was going to offer before they announced they wanted to go to close, and take the chance the other offers either don't materialise or are less

To get it in context, even if I offer a bit above the offers around price, this will be the same amount I was offering unsuccessfully on smaller properties with a bedroom less in a similar condition in the same area over a year ago.

Apologies if that is all a bit too general. Any help much appreciated.

[fflump]

After watching the market but not viewing for over a year I've finally found somewhere I want to buy. This is a public forum so forgive me if I don't go into specifics.

It is going to close in the next few week or so and I am not the only person to have noted interest. It is on at that most annoying of new phrases "offers around".

I'm looking for opinions on tactics. To my mind in the current market I have 3 choices

1. Offer slightly above the offers around price to get it

2. Offer the offers around price and stress the fact I'm not in a chain, the current mortgage market requirements are not a problem and I could agree to as soon a date of entry as they require. Fingers crossed my circumstances might give me the edge even if the other offers are a touch higher

3. Offer the number I originally had in my head, and was going to offer before they announced they wanted to go to close, and take the chance the other offers either don't materialise or are less

To get it in context, even if I offer a bit above the offers around price, this will be the same amount I was offering unsuccessfully on smaller properties with a bedroom less in a similar condition in the same area over a year ago.

Apologies if that is all a bit too general. Any help much appreciated.

-how many notes are there?

-did you have to note interest to get access to the home report?

-what is the home report valuation in relation to the OA figure?

FYI my EA insider tells me that conversion of notes of interest to actual bids is unusually low at the moment around 1 bid for every 3 notes if they're lucky.

[HAMISH_MCTAVISH]

-how many notes are there?

-did you have to note interest to get access to the home report?

-what is the home report valuation in relation to the OA figure?

FYI my EA insider tells me that conversion of notes of interest to actual bids is unusually low at the moment around 1 bid for every 3 notes if they're lucky.

Good points.

If theres a dozen expressions of interest, maybe 3 or 4 will turn into offers. If they are making people note interest to get the home report, that can skew things further. How is the offers around price compared to the survey? And what is that in terms of discount from peak?

Yes, prices are recovering for the spring bounce, but equally, it's not too hard to calculate whats fair at the moment. Get the RoS stats for that area and property type, look at the local SPC stats, research sales in surrounding streets, figure out the average decline from peak for that house type, in that local area, and then add a few percent to account for the bounce. Thats probably what you should be offering. Any less and you may get beaten to it. Any more, and you'll be paying too much.

There is a bounce at the moment, but theres still enough good houses out there that you should be able to avoid overpaying, in terms of getting an average discount from peak for that house type in that area. But I suspect truly cheeky offers aren't going to get very far at the moment given the change in sentiment.

[HAMISH_MCTAVISH]

Oh, and please do keep the forum updated as to whether the offer is successful, and how much off peak it ends up being!

[ccc]

Will you be devastated if you don't get the place ?

If the answer is no then offer 10-15% below 'offers around'. You never know what the other(s) will be offering. If you miss out then no big deal.

Can I ask - Why not wait until the gloomy depressing time of year - Nov or Jan for example - to buy a similar place ?

If you are desperate then offer around what they are wanting. As it says on the tin !!

I personally would not offer more. Offers around is basically fixed price. I am not sure what the stats for Glasgow are but for Edinburgh something like 80% (IIRC) of fixed prices sell for less. A fixed price/offers around selling for the amount wanted is unusual.

Good luck.

PS - Forget all the above. Wait until 2012.

[south_side_sceptic]

Oh, and please do keep the forum updated as to whether the offer is successful, and how much off peak it ends up being!

Thanks for the replies guys. There are 3 notes of interest so the conversion rates mentioned are interesting. I did not have to note interest to get the report so I am taking it they are serious.

The offers around price is about 3.5% below the survey value per the home report.

With reference to what comparable properties have gone for in the street I could pay the offers around price and do the place up and still be looking at a healthy profit compared to prices 2 or 3 years ago. I would probably be level on where things were 4 or 5 years ago.

[south_side_sceptic]

Thanks for the replies guys. There are 3 notes of interest so the conversion rates mentioned are interesting. I did not have to note interest to get the report so I am taking it they are serious.

The offers around price is about 3.5% below the survey value per the home report.

With reference to what comparable properties have gone for in the street I could pay the offers around price and do the place up and still be looking at a healthy profit compared to prices 2 or 3 years ago. I would probably be level on where things were 4 or 5 years ago.

I am not in any great hurry and like you said if I don't get no big deal. I haven't viewed anything in over a year. This property just appealed and whatever angle I come at it from the numbers seem to work. Oh and it ticks ALL the boxes for me.

I have thought myself round in circles and am coming back to the conclusion that I'm not getting sucked into offering anything above just because it's going to close. I'll offer the value I originally thought "fair" and cross my fingers. I've lost out before last year but been satisfied I'd only lost because the ultimate purchaser was a mug

[TTD]

1 "It is going to close in the next few week or so..."

2 "Offer ( insert figure here ) and stress the fact I'm not in a chain, the current mortgage market requirements are not a problem and I could agree to as soon a date of entry as they require."

1. Why wait a few weeks for the closing date?

If you have a solicitor hired to act for you, get him or her to draft an offer at the figure you choose (maybe 10-15% below as ccc suggests), specify in a covering letter the circumstances in 2. that you've outlined here. Fax it to the selling sols with the explicit condition that they respond Y/N within 24 or 48 hours. They're duty bound to take the offer to the vendor.

If he/she likes your offer, they may abandon the other notes in favour of accepting it. If they don't like it, you have the option of increasing it incrementally until they do.

If they stubbornly insist that you wait till closing, then you have the option of leaving your offer on the table until then as is, modifying it in the interim, or withdrawing it.

[ccc]

1 "It is going to close in the next few week or so..."

2 "Offer ( insert figure here ) and stress the fact I'm not in a chain, the current mortgage market requirements are not a problem and I could agree to as soon a date of entry as they require."

1. Why wait a few weeks for the closing date?

If you have a solicitor hired to act for you, get him or her to draft an offer at the figure you choose (maybe 10-15% below as ccc suggests), specify in a covering letter the circumstances in 2. that you've outlined here. Fax it to the selling sols with the explicit condition that they respond Y/N within 24 or 48 hours. They're duty bound to take the offer to the vendor.

If he/she likes your offer, they may abandon the other notes in favour of accepting it. If they don't like it, you have the option of increasing it incrementally until they do.

If they stubbornly insist that you wait till closing, then you have the option of leaving your offer on the table until then as is, modifying it in the interim, or withdrawing it.

Good plan. Nothing to lose. I almost wish I was buying a house today. I would have so much fun.

I love the old bartering - so that is why I try my hardest to get complete strangers to do it on my behalf !!

South Side - I take it that 2nd response was for myself ? If, as you say, you are not that bothered then just offer low and see what happens. You have literally nothing to lose..........Unless the World collapses next month. Possible, wouldn't worry about it though.

Again, good luck.

[south_side_sceptic]

I didn't get the flat so I think I can probably talk specifics now.

4 notes of interest translated into 4 offers. I was second highest. I'm not sure what it went for but I will update when it is on nethouseprices.com Property was 2 bed with large kitchen diner. It was offers around £115k, survey per home report was £119k (couple of months old) and I offered £118k because I really liked it. I was surprised at how annoyed I was not getting it. The problem is I could have gone higher but, having allowed my offer to creep up as I neared the deadline, I am comfortable much more would be hard to justify.

Before you all stomp on me I figured a £12k spend would give you a property that, even today, is worth £140k. Asf the market continues to fall you'd have a £10k buffer.

In terms of how far down this indicates the market is, well it's difficult as like I said this place needed everything done to it. A comparable property in the street (though ground floor) went for £146k in Jan 08. The peak for a comparable in the street is £152k in Sept 06.

Thanks for the advice. Fingers crossed if I offer on anything soon I won't end up going through this whole process again.

[HAMISH_MCTAVISH]

I didn't get the flat so I think I can probably talk specifics now.

4 notes of interest translated into 4 offers. I was second highest. I'm not sure what it went for but I will update when it is on nethouseprices.com Property was 2 bed with large kitchen diner. It was offers around £115k, survey per home report was £119k (couple of months old) and I offered £118k because I really liked it. I was surprised at how annoyed I was not getting it. The problem is I could have gone higher but, having allowed my offer to creep up as I neared the deadline, I am comfortable much more would be hard to justify.

Before you all stomp on me I figured a £12k spend would give you a property that, even today, is worth £140k. Asf the market continues to fall you'd have a £10k buffer.

In terms of how far down this indicates the market is, well it's difficult as like I said this place needed everything done to it. A comparable property in the street (though ground floor) went for £146k in Jan 08. The peak for a comparable in the street is £152k in Sept 06.

Thanks for the advice. Fingers crossed if I offer on anything soon I won't end up going through this whole process again.

Interesting feedback, thanks for that.

So peak was 152K, this one sold as a refurb project for more than 120K. Certainly shows that many areas are holding their value well.

[ccc]

Interesting feedback, thanks for that.

So peak was 152K, this one sold as a refurb project for more than 120K. Certainly shows that many areas are holding their value well.

Eh no. Unless I have missed something.

"The peak for a comparable in the street is £152k in Sept 06"

You do know what COMPARABLE means Hamish ?

You know - something similar.

Maybe South Side didn't make it clear. Either way it would be interesting to know.

[south_side_sceptic]

Eh no. Unless I have missed something.

"The peak for a comparable in the street is £152k in Sept 06"

You do know what COMPARABLE means Hamish ?

You know - something similar.

Maybe South Side didn't make it clear. Either way it would be interesting to know.

Sorry for any confusion I thought I'd made it clear the property I offered on needed EVERYTHING done. I'd assume the peak price would be a flat in great condition so by "comparable" I meant same type of tenement, same number of rooms, same dimensions and same corner position (with large circular bay windows).

I'd still think, based on the prices similar sized properties on the South Side are on for, that you could get £140k for it fully done up. In that sense Hamish's argument things are holding up to an extent seems fair. £12k off £152k is hardly a crash.

As I've said elsewhere on South Side it seems to me there has been no more than a 15-20% fall. Hopefully some way left to go.

[ccc]

Sorry for any confusion I thought I'd made it clear the property I offered on needed EVERYTHING done. I'd assume the peak price would be a flat in great condition so by "comparable" I meant same type of tenement, same number of rooms, same dimensions and same corner position (with large circular bay windows).

I'd still think, based on the prices similar sized properties on the South Side are on for, that you could get £140k for it fully done up. In that sense Hamish's argument things are holding up to an extent seems fair. £12k off £152k is hardly a crash.

As I've said elsewhere on South Side it seems to me there has been no more than a 15-20% fall. Hopefully some way left to go.

Cheers. So sticky in the West too ? I thought it was just us over here. Similar drops by the sounds of it.

[south_side_sceptic]

I just think it has taken everyone so long to accept that, gasp, prices in Scotland have actually fallen. 18 months back people were saying it'd never happen. Now they're saying things have hit the bottom and they'll rise again. Ask them why and they have no answer.

All this does is ensure the stand off will continue between sellers and buyers a while yet. There will be no positive change to the fundamentals of the mortgage market or to the employment situation in the next few years. The bounce everyone is talking up will be gone by the end of the summer and things will slide again.