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Negotiating That House Purchase - Any Success Stories?

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I have trawled through the Market Psychology threads in the HPC vault but can't find any information on on this subject. Apologies mods if this is not so.

My situation is that I have found a house that I would like to buy that has been up for sale for 7 months and had no reduction upon the original asking price.

I have the slightest hint (no real facts) that the owners may have had some bad luck and now are facing reduced circumstances, I'm guessing a redundancy or possibly even a divorce, as their stated reason for selling didn't seem credible, but also sense (fear) that they will hold out for a near to asking price sale.

I would like to take them with me in negotiations but recognise that we may be poles apart on the final price and I may have to be tough and walk away if things don't go eventually to the plan.

Recognising all of this how would fellow HPC'rs apply house buying/selling psychology and negotiate the purchase of the property, including that all important discount?

I'd be really interested in any particular method that worked for you.

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I have trawled through the Market Psychology threads in the HPC vault but can't find any information on on this subject. Apologies mods if this is not so.

My situation is that I have found a house that I would like to buy that has been up for sale for 7 months and had no reduction upon the original asking price.

I have the slightest hint (no real facts) that the owners may have had some bad luck and now are facing reduced circumstances, I'm guessing a redundancy or possibly even a divorce, as their stated reason for selling didn't seem credible, but also sense (fear) that they will hold out for a near to asking price sale.

I would like to take them with me in negotiations but recognise that we may be poles apart on the final price and I may have to be tough and walk away if things don't go eventually to the plan.

Recognising all of this how would fellow HPC'rs apply house buying/selling psychology and negotiate the purchase of the property, including that all important discount?

I'd be really interested in any particular method that worked for you.

Fix a price in your head that you will definitely not go above... DO NOT GO ABOVE IT...... Then offer below that.

The saying that I heard on this forum a few times and stuck with me and served me well was...

If your offer does not make you feel uncomfortable/embaressed then it`s not low enough. If you can`t get the house you want for the price you want to pay then wait like many others on here. Your time and the right house will come along.

I found our dream home and offered 40% off and ended up with 31% off asking price.

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Get initial background info. When did they buy it? If post 2000 should be on houseprices site.

Spend £3 on Land Registry to see if they own outright, or if there's a lender involved.

If they bought pre 2000 and there's a negligible (or no) mortgage, your strategy will be very different to that if they bought at peak and have a massive mortgage.

If applicable, make the personally embarrassing offer suggested by Bosh. Your offer should almost physically fell the vendor or agent, and be followed by incredulity, outrage and anger on their part.

Edited by juvenal

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Guest Daddy Bear
Fix a price in your head that you will definitely not go above... DO NOT GO ABOVE IT...... Then offer below that.

The saying that I heard on this forum a few times and stuck with me and served me well was...

If your offer does not make you feel uncomfortable/embaressed then it`s not low enough. If you can`t get the house you want for the price you want to pay then wait like many others on here. Your time and the right house will come along.

I found our dream home and offered 40% off and ended up with 31% off asking price.

Exactly - work out 40% off - that should be your initial offer - and only buy it if you get >30% off.

It must be your dream home - ticks all the boxes ...great location,....orientation...room numbers and size....schools...potential to add on...etc....etc....

Someone once told me this method:

Employ the services of a few mates to make offers and tie them up for a year or year and a half - psychologically bring them to the edge...as their "buyers" keep them hanging on for 6 months- and then they pull out at the last minute....only to replaced by stooge number 2 with a slightly lower offer etc...and then repeat...you get the drift?

Risky business - requires an investment of a few thousand - and is not strictly legal - and is morally reprehensible.....

I would not advocate this at all.

Anyway putting in a 40% below offer worked for me - it took me a year and a half - and I completed at 32% off.

DB

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Thanks to you all so far, most of what you have all said is in my plan, apart from driving past the house and employing the stooges. :lol: Thanks to Juvenal also, that LR stuff could be an invaluable tool.

I feel quite comfortable up to the point of putting in the low offer, fully recognising that almost any initial offer will be rejected. I'm the perfect buyer in respect having sold to rent and mortgage in place and intend to include that information in any offer.

However the tricky bit, as I see it anyway, after putting the "insulting" offer in, is how to maintain civilised dialogue with agent/vendor or maybe that is an impossible expectation in these situations.

I had assumed the obvious way is to ring the agent (vendor instead perhaps) frequently, advise the offer still stands until someone gives in or changes their position.

I was wondering if there are different ways that had worked employing more subtle tactics.

Could be though that tenacity is the only way.

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Thanks to you all so far, most of what you have all said is in my plan,

However the tricky bit, as I see it anyway, after putting the "insulting" offer in, is how to maintain civilised dialogue with agent/vendor or maybe that is an impossible expectation in these situations.

I think the poster who said you should remain likeable is right. My suggestion is that you preface your offer (written so it must go to the vendor) with a well argued case for that offer, based on the info found on here and elsewhere. And of course on a knowledge of the sale prices of similar recently sold houses in the immediate area, if such knowledge favours your case.

Given that further monthly falls in houseprices are to be expected in what is now an established downward trend in prices, this should be mentioned. Likewise the expected monthly rise in unemployment, and little relaxation expected in the availability of credit. Maybe mention the abnormal escalation of the last decade, the lack of genuine buyers (like yourself) as opposed to 'lookers', the low numbers of housing transactions, general public insecurity, political uncertainty etc. 'My offer takes into account all the foregoing factors...'

You will tell them you can proceed quickly, and are looking at a number of properties. Your offer is time-limited.

You need to come over as a serious, thoughtful and genuine prospective buyer, thoroughly familiar with the market, which hopefully will deny them the opportunity to dismiss you as a chancer looking to score with a cheeky offer - I'm sure you know this already. If you succeed, this will at least open a negotiation.

Not an easy one to pull off, but it can be done.

Best of luck.

PS. A polite word with the neighbours, initially about traffic, amenities etc then skillfully shepherded in the right direction may just possibly elicit some more detail about the personal circumstaces of the vendor - job loss, divorce - whatever.

Edited by juvenal

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One thing I have not seen suggested...

Decide your final price, then choose a first offer price so that you can make two or three offers, each time decreasing by about half how much you raise the offer.

ie for a house on at 100.

you want to pay 80

start with 66

then 74

then 78

then 80

or whatever the numbers are for you.

I would say that if it is a divorce that can cause problems. I have been bidding on a place where one partner simply wouldn't budge. Subsequently taken off the market. I then discovered that it was a divorce and the partner who wouldn't budge was holding out for their pound of flesh. In the end the other bought them out.

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I feel quite comfortable up to the point of putting in the low offer, fully recognising that almost any initial offer will be rejected. I'm the perfect buyer in respect having sold to rent and mortgage in place and intend to include that information in any offer.

Make the offer directly to the vendor if possible. Write it down at the end of the viewing and pass it to them. Acknowledge that you are going to offer a 'little' below the asking price. Follow up with an offer to the EA.

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i've been making low ball offers and in many cases just ended up p*ssing off the vendor/agent

i dont know if say you wanted to pay 100 for a property worth 125 you should offer 75

or whether it's best to go for say 90 then 95, 98, 100 as someone else suggested

i will try more the latter approach today as not had luck on recent offers using the more aggressive approach

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i've also been bidding on a divorce case

did use the low ball offer technique, did get a good price

but nothing has happened

3-4 months after offer accepted, the vendor hasn't even got a solicitor who can deal with property (only divorce) or got a hip

so complete waste of time and dreams

estate agents now telling me now is not as good a time to offer low ball as before

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Thanks to you all so far, most of what you have all said is in my plan, apart from driving past the house and employing the stooges. :lol: Thanks to Juvenal also, that LR stuff could be an invaluable tool.

I feel quite comfortable up to the point of putting in the low offer, fully recognising that almost any initial offer will be rejected. I'm the perfect buyer in respect having sold to rent and mortgage in place and intend to include that information in any offer.

However the tricky bit, as I see it anyway, after putting the "insulting" offer in, is how to maintain civilised dialogue with agent/vendor or maybe that is an impossible expectation in these situations.

I had assumed the obvious way is to ring the agent (vendor instead perhaps) frequently, advise the offer still stands until someone gives in or changes their position.

I was wondering if there are different ways that had worked employing more subtle tactics.

Could be though that tenacity is the only way.

Haven't read the whole thread but thought I would add that currently it really does depend on area .

I have friends, all cash buyers, put in offers on various properties at 25% off peak in Dorset , all turned down with "we have already had higher offers". All properties then stayed on the market unsold for months and months and months all now gone "under offer " or "STC" will be interesting to see what happens next. Someone on HPC said yesterday that it was similar in their area but ALL have come back on the market.

People think we are living in 2007, we are not.

Lenders valuations come in at 25 - 30% off peak and sellers do not want to reduce.

The NAEA said that "the vast majority of buyers have a property to sell that they have not yet put on the market". So offers are one thing, completions are another.

On "working lunch" last week there was a reference made to agents having backlogs of 45 offers all waiting for approvals. With 25% of those who apply for a mortgage being turned down and lenders wanting 25% deposits its little wonder that so few houses are completing.

Its unfortunate that people do not realise what the market is like until they have already initiated the process of buying , meaning that a prospective purchaser who put in a higher offer than my friends may well end up getting the property at the price my friends offered or less as the whole chain is asked to reduce to take into account realistic valuations , but that is just a problem with the current market with EA's and sellers still very much in denial.

Nobody wants to pay peak when property should be down at least 20% that is:

£250000 now £200000

This will mean you will almost certainly lose at least another 10% on this , £25000 within a year. (Taking it from peak ).

With 35% falls, which are very likely, you will lose possibly lose £37500 in the year.

40% falls £50000 .......

Makes one wonder why anyone is making an offer on these overvalued properties with such large potential losses.

Buyers have very little to lose by waiting, sellers have everything to lose my not accepting a 30% offer now.

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Thanks to you all so far, most of what you have all said is in my plan, apart from driving past the house and employing the stooges. :lol: Thanks to Juvenal also, that LR stuff could be an invaluable tool.

I feel quite comfortable up to the point of putting in the low offer, fully recognising that almost any initial offer will be rejected. I'm the perfect buyer in respect having sold to rent and mortgage in place and intend to include that information in any offer.

However the tricky bit, as I see it anyway, after putting the "insulting" offer in, is how to maintain civilised dialogue with agent/vendor or maybe that is an impossible expectation in these situations.

I had assumed the obvious way is to ring the agent (vendor instead perhaps) frequently, advise the offer still stands until someone gives in or changes their position.

I was wondering if there are different ways that had worked employing more subtle tactics.

Could be though that tenacity is the only way.

If you feel the need, then offer an explaination of your reasons for offering so low. Get some facts and figures, economic reports etc.

Also point out that it is one of 3 houses that you have offered on. You like them all equally, so you are just looking for the best deal. Feign indifference regarding the house.

Don't rely on the agent to pass on your indifference and interest in other houses. You'd be best making your position clear to the vendor before making your offer to the agent, so your low offer won;t come at too much of a shock.

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Steve Cook set off a thread in a very similar vein which would be worth reading:-

http://www.housepricecrash.co.uk/forum/ind...=100662&hl=

I still feel as then that care should be taken not to sound so canny that they think you're a pro. More to the point, if you've rationalised your strategy so carefully that it becomes a formula, then it might suggest lack of flexibility.

I think you need to display an air of good knowledge but leave them with an impression that they have some power in the negotiation.

Let them know you're looking at several properties and will go with the first one to bite. OTOH you believe the market is falling so you're not in a hurry.

Nothing mind-bogglingly clever and it'll help them to see it from your point of view.

Is it a couple selling? Do you have a pretty, homely partner you can take along to soften their hearts? If not, perhaps rent one?

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Steve Cook set off a thread in a very similar vein which would be worth reading:-

http://www.housepricecrash.co.uk/forum/ind...=100662&hl=

I still feel as then that care should be taken not to sound so canny that they think you're a pro. More to the point, if you've rationalised your strategy so carefully that it becomes a formula, then it might suggest lack of flexibility.

I think you need to display an air of good knowledge but leave them with an impression that they have some power in the negotiation.

Let them know you're looking at several properties and will go with the first one to bite. OTOH you believe the market is falling so you're not in a hurry.

Nothing mind-bogglingly clever and it'll help them to see it from your point of view.

Is it a couple selling? Do you have a pretty, homely partner you can take along to soften their hearts? If not, perhaps rent one?

Always lodge a time stamped bid. It gently puts the pressure on. So if someone is selling 100 and it has been on 6-12 months then you bid 80 and say the offer is good until X date. That way they know they have a definite cash amount on the table. They will try to sell for more but the close they get to X date the more jittery they get as yours is the only offer on the table.

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As a result of being pointed in the right direction by the excellent advice on this mb I have moved on in the information gathering exercise this morning, I have identified the purchase price and date of purchase, extrapolated that across the "Haliwide" property price calculators and surprise surprise, which ever way you cut it the house is overvalued by some margin, so a good evidence based bargaining tool. (regardless of how much faith you have in it).

I obtained the land registry data for the property too and found a second charge exists, which may relate to an overdraft facility etc, this may have some bearing on what if any "distress" is affecting the sale.

Thanks again

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I obtained the land registry data for the property too and found a second charge exists, which may relate to an overdraft facility etc, this may have some bearing on what if any "distress" is affecting the sale.

Thanks again

Second charge is another mortgage normally for debt consolidation. chances are there will be other unsecured debt in the back ground. Add the 2 mortgage ballances togther, chuck in 10K for the credit card debt and that is the minnimum they can except plus say 5K for fees.

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I had hoped the mortgage detail (amount borrowed or outstanding) would have been in the Land registry data but that only contains detail on the lender. Where do you look for more mortgage detail?

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