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BrynJ

Making An Offer - Properties On Market For Almost 12 Months

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I'm looking to move to Chester way soon (in next couple of months), and I've begun the painful task of house hunting. I'm a first time buyer with a hefty deposit, so no mortgage troubles.

Of the properties I've visited, two so far catch my attention:

http://www.rightmove.co.uk/property-for-sa...y-22691396.html

http://www.rightmove.co.uk/property-for-sa...y-15508621.html

Now, according to the ever useful Property Bee, both properties were listed in August last year - and both had their prices reduced by around £5k by Oct / Nov.

Obviously the properties are still over-priced or they would have sold - but, realistically, where should I be pitching an opening offer? I was thinking around the £115k mark, but I'm not sure if that's taking the piss - when it comes to negotiations, I don't want to immediately get the seller's back up.

Thanks for any advice.

Bryn.

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Have you checked previous sale history for the respective streets/roads via Land Registry? There's a couple of good websites though I can only think of this one right now - http://www.ourproperty.co.uk/

The data goes back to at least (year) 2000.

Good suggestion. For the first property, the average price on that street (keeping in mind they are all identical ex-council semis) was around £150k in 2007, and £120k in 2006, 2005 and 2004 (appears to be little variation during that time?). Having said that, the property I'm looking at does require work - new kitchen, new bathroom, floor coverings, possibly some plaster skimming.

On the second property, it's in a cul-de-sac with varying properties (detached, semis and some bungalows) and the last semi sold for £130k in Feb 2009, a detached in late 2006 for £205k, then the next properties were in 2004, both semis at £93k and 125k. This one wouldn't need anything spending on it really, save for new carpets.

All above prices from houseprices.co.uk (the site you linked to seemed to require registration to view the individual prices).

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Ah yes, forgot about that though it is free registration. Nevertheless, both sites offer the same function. To be honest, i'm not the expert on here so hopefully other posters will 'chip-in'.

If I recall, the general consensus is that we're back to 2004 prices so I suppose a low-ball figure of 115k might be a good starting point. Then again, the oft repeated mantra on here is that if you're not embarassed by your offer, it's not low enough...

Chuck in your offer and see what they say?

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I guess you could say I'd be mildly embarassed by an offer around the £115k, so perhaps that is a good starting point.

As a first time buyer with no finance troubles, I assume I must be in the best possible position - particularly as both these properties are advertised as "no onward chain"?

In the current very uncertain times, I would imagine a seller would do anything to avoid a what could be the lengthy delay (and fragility) of a chain - with the distinct possibility of another downard turn in the market before the transaction might complete.

Like many others, I think the reality check has still not hit home for sellers.

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In a normal stable property market it is usual to make a starting offer of around -10% to -15% off the asking price. In this kind of market you should be starting at -25% to -30% as the starting point for a first offer. If the asking price is higher than similar properties on the market or it has been on the market for 9 months or longer you can look at the possibility of a -40% offer. Don't be taken in by the childish attempts at psychological games Estate Agents play .... you know .... 'the vendor will be insulted'; 'I would buy it myself at that price'; 'we've got a higher offer than that on the table'; 'the vendor can't afford to accept such a low offer'; etc., etc., etc.

You need to buy as cheaply as possible - don't let embarrasment or silly little Estate Agents get in the way of that. If the Estate Agents plays silly buggers then negotiate directly with the vendor.

With a bit of persistence and determination you will find a property you want in a good location at a price that involves a very hefty discount. If, when you buy a property, the Estate Agent isn't seething with anger and disapointment you have, then, paid too much.

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Nice advice. I do fully intend to play the Perfect Buyer card when putting forward an offer. I was even told by the EA that the vendor of the first property would likely accept an offer in the region £130k - which to me translates as the vendor will sell around £120k, at least. Then again, the vendor themselves said that they had received 3 offers, but rejected all of them - which might mean the seller is really not that bothered about moving.

Hmm, I think a lot of the bargaining is not just directly related to the current property market, but also how keen (read: desperate) the seller is.

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Nice advice. I do fully intend to play the Perfect Buyer card when putting forward an offer. I was even told by the EA that the vendor of the first property would likely accept an offer in the region £130k - which to me translates as the vendor will sell around £120k, at least. Then again, the vendor themselves said that they had received 3 offers, but rejected all of them - which might mean the seller is really not that bothered about moving.

Hmm, I think a lot of the bargaining is not just directly related to the current property market, but also how keen (read: desperate) the seller is.

They are, to nick another poster's idea, 'tyre kickers'. As you say, if they've already recieved three offers (one of which must surely be close to asking price?) and knocked back all, then they can't be that motivated to sell.

I'd take whatever the EA says with a pinch of salt (who knows, perhaps the vendor had admitted they would accept less than that?) but you're right insomuch that whether a 'derisory' offer is accepted depends on the circumstances of the vendor.

Let's face it, there's only one way you're going to find out. Personally, I wouldn't get into a bidding war if you are knocked-back (long story) but simply walk away. There'll be no shortage of properties coming onto the market so don't get fixated with one or two.

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Yes, I'm determined not to get attached to a property and will try to keep my options open. Ideally I'd like to be moved within the next 2 months, but something tells me that waiting that time out will pay dividends. We'll see how flexible these sellers are.

Part of the problem is that there aren't that many properties on the market in the right area and within my price range. On the flipside, there aren't that many buyers in my position either - it's all swings and roundabouts really.

[Edit] - here's a great chart to see what the Chester property market is currently looking like http://www.houseladder.co.uk/House_Prices/..._L10638_SLP_PG6 - look at the nosedive of sold properties per month. Incredible really - and surely not unique to Chester.

Edited by BrynJ

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Great website, I hadn't seen that before - very useful tool.

Everyone's situation is different however most people on here would recommend holding off for a bit longer unless you have to. It would be best to get the summer months out of the way and any optimism in the market. I haven't been actively looking for over a year now but I imagine the 'spring bounce' will only serve to reinforce the deluded seller's asking prices.

Personally, i'll be waiting till at least Sept/Oct before putting my feelers out and hopefully buying by Q1 2010.

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I may try to hang on a bit longer, but it would be a major inconvenience if I wasn't moved by the end of September. Hmm, decisions decisions!

In any event, I won't be paying what I consider to be over the odds for any property. I'll see how things play out when the time comes to make an offer.

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Great website, I hadn't seen that before - very useful tool.

Everyone's situation is different however most people on here would recommend holding off for a bit longer unless you have to. It would be best to get the summer months out of the way and any optimism in the market. I haven't been actively looking for over a year now but I imagine the 'spring bounce' will only serve to reinforce the deluded seller's asking prices.

Personally, i'll be waiting till at least Sept/Oct before putting my feelers out and hopefully buying by Q1 2010.

My sentiments exactly. However, I fear that we are not in a minority. If a large number of people are thinking along the same lines, there will be a huge amount of competition for relatively low levels of housing stock at that time, which would then push prices up.

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My sentiments exactly. However, I fear that we are not in a minority. If a large number of people are thinking along the same lines, there will be a huge amount of competition for relatively low levels of housing stock at that time, which would then push prices up.

True, though I am hoping that stricter lending criteria will exclude most of the competition. I'm not going to worry about variables out of my control; all I care about is prices going down further to decent levels.

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Nice advice. I do fully intend to play the Perfect Buyer card when putting forward an offer. I was even told by the EA that the vendor of the first property would likely accept an offer in the region £130k - which to me translates as the vendor will sell around £120k, at least. Then again, the vendor themselves said that they had received 3 offers, but rejected all of them - which might mean the seller is really not that bothered about moving.

Hmm, I think a lot of the bargaining is not just directly related to the current property market, but also how keen (read: desperate) the seller is.

Bryn,

You'll get lots of nice advice here, but I think the best is to not buy in a falling market unless you find the propery that really is for you. The one youstill want after you accept that it may be "worth" 10-40% less in 2 years time and may not recover to the price you paid for many years. However, I've been at this game for a couple of years (since leaving EGOV, if you are the BrynJ that I suspect you are!) and the two house that I was prepared to take a hit on refused to sell at my offer price (asking -30%) only to sell to someone else several months later for a price close to my offer. This is galling, but as the market is still falling (don't belive the green shoots ballacks), I now consider that I was saved from a bad move by their stubborness. We are a little further into the game now, but I suspect lessons from the early satge may well still apply. I for one am prepared to wait and rent for a while, in fact I am rapidly coming to the conclusion that renting is fine, let the pains of ownership, fallng notional value/depreciation/repairs etc, be someone else's.

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bryn ...beware chesters market is in freefall and has not seen a bounce.... i am in a ch postcode and the market is dead..if you can rent for a year or so plenty to choose from...

7 houses sold in the whole of chester in may is desperate....

Edited by geoffk

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I really appreciate all the replies and advice, thank you.

I hear what you're saying about renting, but I'm really not sure the economics would work for me. At the moment, where I live (in a tiny town in North Wales), I pay less than £300 per month rent for a 1 bed flat - with council tax and utilities included.

It looks like I'd be looking at at least £500 per month for a rental in a decent area of Chester (I see a mid-terrace in Hoole on Rightmove for £550 pcm), plus council tax and utilities. With my deposit and the property price range I'm looking at, my mortgage would be in the region of £225 to £250 per month.

If I was to rent for a year, then that's at least £6000 from my deposit (assuming I couldn't save any more) - alternatively, if I can find the right property at the right deal, after a year I'd have paid off some of the mortgage and had more ready cashflow. Am I missing anything obvious there?

Steve - I don't think I am the Bryn you're thinking of, sorry to disappoint :)

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I really appreciate all the replies and advice, thank you.

I hear what you're saying about renting, but I'm really not sure the economics would work for me. At the moment, where I live (in a tiny town in North Wales), I pay less than £300 per month rent for a 1 bed flat - with council tax and utilities included.

It looks like I'd be looking at at least £500 per month for a rental in a decent area of Chester (I see a mid-terrace in Hoole on Rightmove for £550 pcm), plus council tax and utilities. With my deposit and the property price range I'm looking at, my mortgage would be in the region of £225 to £250 per month.

If I was to rent for a year, then that's at least £6000 from my deposit (assuming I couldn't save any more) - alternatively, if I can find the right property at the right deal, after a year I'd have paid off some of the mortgage and had more ready cashflow. Am I missing anything obvious there?

Steve - I don't think I am the Bryn you're thinking of, sorry to disappoint :)

Ah well there are a lot of you about!

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I really appreciate all the replies and advice, thank you.

I hear what you're saying about renting, but I'm really not sure the economics would work for me. At the moment, where I live (in a tiny town in North Wales), I pay less than £300 per month rent for a 1 bed flat - with council tax and utilities included.

It looks like I'd be looking at at least £500 per month for a rental in a decent area of Chester (I see a mid-terrace in Hoole on Rightmove for £550 pcm), plus council tax and utilities. With my deposit and the property price range I'm looking at, my mortgage would be in the region of £225 to £250 per month.

If I was to rent for a year, then that's at least £6000 from my deposit (assuming I couldn't save any more) - alternatively, if I can find the right property at the right deal, after a year I'd have paid off some of the mortgage and had more ready cashflow. Am I missing anything obvious there?

Steve - I don't think I am the Bryn you're thinking of, sorry to disappoint :)

Blimey, i'm cack at maths but that sounds like you have a hefty deposit there? If that is the case then it sounds like you might be able to make the figures add up for you - I assume that it's a repayment mortgage that you're referring to? There are quite a few STR-ers on here (and a few have bought recently) that are in a similiar position though I would argue that a lot on here are in no way representative of the wider populace.

In any event it sounds like you know what you're doing so good luck.

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I do indeed have a nice deposit to lay down. And yes, I am referring to a repayment mortgage - I wouldn't touch an interest only. Circumstances are such now that I know a rental in the region what's available in Chester would quickly eat in to what I have saved.

In reality, if I was to hold off moving, it would make the most sense to remain where I am - personal circumstances would make that awkward, but not impossible.

The argument for renting is a relatively moot one then, but I can see how it would work well for those that would end up with a comparable mortgage to rental cost.

I have no idea what STR is by the way - care to fill me in? Thanks!

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I have no idea what STR is by the way - care to fill me in? Thanks!

STR = Sold To Rent

Good luck with whatever you decide, but remember that if house values fall 10% per year for a few years, renting works out cheaper even at CH prices.

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Very true - and I think I'm with the majority on the board here that think they will go down again. I just wish I had a crystal ball to see when and by how much though :)

On the plus side, when looking at the lower end of the market, you do stand to lose less - 20% of £100k is easier to stomach than 20% of £250k.

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I'm looking to move to Chester way soon (in next couple of months), and I've begun the painful task of house hunting. I'm a first time buyer with a hefty deposit, so no mortgage troubles.

Of the properties I've visited, two so far catch my attention:

http://www.rightmove.co.uk/property-for-sa...y-22691396.html

http://www.rightmove.co.uk/property-for-sa...y-15508621.html

Now, according to the ever useful Property Bee, both properties were listed in August last year - and both had their prices reduced by around £5k by Oct / Nov.

Obviously the properties are still over-priced or they would have sold - but, realistically, where should I be pitching an opening offer? I was thinking around the £115k mark, but I'm not sure if that's taking the piss - when it comes to negotiations, I don't want to immediately get the seller's back up.

Thanks for any advice.

Bryn.

I don't think you should buy a house that nobody else wants to buy. You are more likely to have difficulties when you come to sell it. Sensibly priced houses do sell, so if it has been on hte market for nearly a year, it is clear that they are expecting way to much for it, and you are probably wasting your time even thinking about putting an offer in for it.

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I don't think you should buy a house that nobody else wants to buy. You are more likely to have difficulties when you come to sell it. Sensibly priced houses do sell, so if it has been on hte market for nearly a year, it is clear that they are expecting way to much for it, and you are probably wasting your time even thinking about putting an offer in for it.

I hear what you're saying, but the irony is that if you exclude any properties in Chester on RightMove that were listed over 6 months ago you could almost pick your house by the toss of a coin ;)

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I hear what you're saying, but the irony is that if you exclude any properties in Chester on RightMove that were listed over 6 months ago you could almost pick your house by the toss of a coin ;)

It is the same in most places at the moment. There is a chronic shortage of supply, and that is what is supporting house prices at the moment. This can't last forever, and when properties do come back onto the market again, which means actually available for sale at the market price, then prices will fall through the floor.

Edited by jonb

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