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Negotiating With Vendors Who Bought At Peak

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My wife and I are desperate to move from our current rented place, which after 2 years is getting to be too small. Hoping to start a family soon - unfortunately the biological clock does not wait for property cycles! I hoped this would be our last rented home and that we would be in a position to buy. The quality of rental property in our area (Sevenoaks) is pretty patchy at the moment and the quality of houses for sale is generally higher. I am coming under pressure to buy given we have a 25% deposit, no debt and would still be able to keep some money invested for a rainy day.

I viewed a house at the weekend that was interesting. Priced at £325k. The current vendors bought the house for £310k in Sept 2007 (not the best timing, there!) and have done some work - principally a new kitchen and bathroom from what I can see. The improvements are to a pretty good standard and we probably would leave those rooms as they are.

Have checked Zoopla and an approximately 10% fall from Sept 2007 prices is indicated in this area. Given the vendors have done some work and bought for £310k I am not sure they would entertain the indicated offer of £280k.

Given my expectation of further price-drops to come I definitely would not want to pay more than £280k and would ideally want to pay closer to £250k.

Where to start negotiations knowing I would be offering considerably less than they paid? I know the house sold for £205k back in 2000.

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Why don't you just ring the EA say you drove around the area and ask him/her for the price. When s/he says £325k, I would just say I can't go above the 250k stamp duty limit, or might be able to push a little extra for fixtures & fittings... then ask if it's worth you seeing it.

I tried this on a 310k house, and they pushed me to go for a viewing (£250k would have been a bargain = 2002 price); I suggested the EA ring the vendor asking if it's worth me viewing... they did and they came back with a big "no". It later sold, not sure of the price though.

At least I tried, but I never expected to succeed. Oh, and explain your position... no chain etc...

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Start and finish at 250. Its what you want to pay. Why pay more?

I am not familiar with the area but how many years rent is the 60 grand you are about to lose?

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My wife and I are desperate to move from our current rented place, which after 2 years is getting to be too small. Hoping to start a family soon - unfortunately the biological clock does not wait for property cycles! I hoped this would be our last rented home and that we would be in a position to buy. The quality of rental property in our area (Sevenoaks) is pretty patchy at the moment and the quality of houses for sale is generally higher. I am coming under pressure to buy given we have a 25% deposit, no debt and would still be able to keep some money invested for a rainy day.

I viewed a house at the weekend that was interesting. Priced at £325k. The current vendors bought the house for £310k in Sept 2007 (not the best timing, there!) and have done some work - principally a new kitchen and bathroom from what I can see. The improvements are to a pretty good standard and we probably would leave those rooms as they are.

Have checked Zoopla and an approximately 10% fall from Sept 2007 prices is indicated in this area. Given the vendors have done some work and bought for £310k I am not sure they would entertain the indicated offer of £280k.

Given my expectation of further price-drops to come I definitely would not want to pay more than £280k and would ideally want to pay closer to £250k.

Where to start negotiations knowing I would be offering considerably less than they paid? I know the house sold for £205k back in 2000.

Does 'owning' a house help with fertility? :lol:

Does having a mortgage make the wife a little more horny? :P

Idea. :angry:

Rent a larger, family sized home, & get procreating. Housing cycle my ****. Buy a house when you think its a good idea.

No such thing as a cheeky offer, only accepted & rejected ones.

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Hoping to start a family soon - unfortunately the biological clock does not wait for property cycles!

Assuming your wife has not conceived yet, that's 9 months, a one or teo year old does not take up that much room, unless you acumulate a load of unnecessary sh*te for them. (Ours stayed in our room untill he was one). So I would say that you should not be under any pressure to move for at least 2 to 3 years, assuming your flat has a small spare 'box' room or bigger.

If you are looking in the circa £300k area and are in rented at the moment, ie no chain when you want to move, I would just get jiggy with it if I were you and let this mess play out for another couple of years. Then move when you actually 'need' the space.

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Hoping to start a family soon - unfortunately the biological clock does not wait for property cycles!

Assuming your wife has not conceived yet, that's 9 months, a one or teo year old does not take up that much room, unless you acumulate a load of unnecessary sh*te for them. (Ours stayed in our room untill he was one). So I would say that you should not be under any pressure to move for at least 2 to 3 years, assuming your flat has a small spare 'box' room or bigger.

If you are looking in the circa £300k area and are in rented at the moment, ie no chain when you want to move, I would just get jiggy with it if I were you and let this mess play out for another couple of years. Then move when you actually 'need' the space.

We're just into that 9 month countdown. I'm fine with continuing to rent for the next couple of years while we wait for sanity to return to the market. The place we currently have is a (admittedly very nice) 2 bedroom cottage in a village just outside Sevenoaks. The place is quite small for the two of us, but of course we can manage because the nipper will share our room. I'm just a little disappointed that the available 3 bed rentals are a bit shoddy (or ridiculously over-priced) at present.

Not looking to buy unless it suits us. The budget will be up to ca. £350k with an approx. 25% deposit, based on my salary only so my wife can take as much time off work as she wants. We should be in a great position, but the small bounce in prices over the summer seems to have given vendors some strange notions of the boom times returning in these parts. We really need to wait for reality and depression to sink into all concerned over the winter before vendors in these parts start to consider realistic offers again.

Not sure if this house will be the one for us. It is one thing for a vendor to write off a portion of their paper profit on a sale, but it is another to crystallise a £60k (20%) nominal loss. The vendors are resonably motivated and are apparently prepared to sell and move back in with parents in order to complete (they had a chain fall through earlier in the year). Given they bought in 2007 they probably financed the purchase with a Northern Rock 125% special and cannot sell for less than they paid. Either way - don't think the time is right for the low offer. Things need to get much scarier financially in the South East before sanity returns.

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My wife and I are desperate to move from our current rented place, which after 2 years is getting to be too small. Hoping to start a family soon - unfortunately the biological clock does not wait for property cycles! I hoped this would be our last rented home and that we would be in a position to buy. The quality of rental property in our area (Sevenoaks) is pretty patchy at the moment and the quality of houses for sale is generally higher. I am coming under pressure to buy given we have a 25% deposit, no debt and would still be able to keep some money invested for a rainy day.

I viewed a house at the weekend that was interesting. Priced at £325k. The current vendors bought the house for £310k in Sept 2007 (not the best timing, there!) and have done some work - principally a new kitchen and bathroom from what I can see. The improvements are to a pretty good standard and we probably would leave those rooms as they are.

Have checked Zoopla and an approximately 10% fall from Sept 2007 prices is indicated in this area. Given the vendors have done some work and bought for £310k I am not sure they would entertain the indicated offer of £280k.

Given my expectation of further price-drops to come I definitely would not want to pay more than £280k and would ideally want to pay closer to £250k.

Where to start negotiations knowing I would be offering considerably less than they paid? I know the house sold for £205k back in 2000.

I don't think there is any point in wasting your breath with them. They won't be able to afford to go as a low as £280k or £250k because that won't pay off the mortgage. Look for somewhere else.

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I don't think there is any point in wasting your breath with them. They won't be able to afford to go as a low as £280k or £250k because that won't pay off the mortgage. Look for somewhere else.

I tend to agree with you. Shame because the house was pretty nice. Supply is really tight round here at the moment but I'm sure that will change over the next year.

I fear the vendors of this place may be staying where they are unless they have some equity in the house they are prepared to walk away from. It's a shame you don't get to do some due diligence on vendors to find out how leveraged they are. Maybe we could have a statement of borrowing added to the HIP to assist buyers in screwing over vendors.

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I don't think there is any point in wasting your breath with them. They won't be able to afford to go as a low as £280k or £250k because that won't pay off the mortgage. Look for somewhere else.

Almost certainly correct. But you don't know until you ask. Offer £250K... You need to get into the habit of making many lowball offers: Once you've made a few its A LOT less nervewracking.

Good Luck. Let us know what happens.

Ben

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Congratulations! If it makes you feel any better, we are in a 2 bedroom flat in Brighton with no garden and a 10 month old!! :D

Cheers. Early days for us and it doesn't feel quite real yet.

We'll manage where we are. We're just frustrated because living where we are when we have a child didn't really fit the life plan. You can get your own finances in place but you can't legislate for a nation full of f**kwits inflating the price of pretty average family homes to insane levels.

My wife and I both have reasonably mobile jobs so if things don't turn around in the next few years we'll more likely than not take junior off to a country that isn't quite so screwed up.

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I'm in a 2 bed flat in West London with a 2 year old, another on the way, and a 10 year old who visits in the holidays. It's not that comfortable, but not that unusual in London. The thing is, its a great place, my rent is cheap, and it's not worth paying peak prices to get somewhere just a little bit bigger. Just a little bit of extra space would cost about £600 extra per month in interest alone. With the money we are saving we get to go on a couple of fantastic holidays a year. And everybody's happy!

My experience of trying to negotiate with vendors who bought at peak is that they either can't take the loss, because they would be in negative equity, or they can't stomach a loss because they are convinced prices will be back to "normal" soon. The real canny ones will take a loss and pass it up the chain. The hard bit is finding these vendors, its a slow process and you just have to turn over every stone and make an offer at the level you are willing to pay.

Patient FTB - Be patient! Start a family now. Living in a small flat with a little one isn't that bad, in fact it has it's advantages and can be quite fun. Keep throwing in low offers at places you like. Despite what the VIs are saying, the market is slowly but surely trickling down, and you'll get there in the end. £60K saved is a lot of money and worth a year or two in your flat.

Good luck mate!

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I'll never understand why people are afraid to make low offers.

You send an e-mail, they say no.

You either up the offer, or leave it on the table.

If the estate agent acts all huffy and suggests that your offer is a joke, just remember that he's a tosser in a Next suit. He works for the seller, not for you.

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Cherubium is dead right here, there is no issue with making a low offer

If the estate agent acts all huffy and suggests that your offer is a joke...

I'm pretty sure it must be a sales tactic of theirs to try and ridicule you in to offering more money

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Almost certainly correct. But you don't know until you ask. Offer £250K... You need to get into the habit of making many lowball offers: Once you've made a few its A LOT less nervewracking.

Good Luck. Let us know what happens.

Ben

Didn't get as far as making the offer. Sounded out the EA and it was clear that any offer I was prepared to make would fall significantly short of what the vendor would entertain. Vendor would find it impossible to accept such a low offer apparently.

My wife and I have been keeping an eye on the rental and sales markets because our current place is not going to cut it - feels claustrophobic with just the two of us living there!

We have made an offer on a new rented place, which is currently being processed. Detached 3 bed cottage with large garden and outbuildings in a rural location near Sevenoaks for ca. £1,200 pcm. More than we are paying at present, but it will be well worth it for the difference it will make to our quality of life. My wife and I (and other(s)) will quite happily stay renting there until the insanity ends. Just need to keep the £120k deposit safe and add to it over the next couple of years in anticipation of a more realistic market.

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I tend to agree with you. Shame because the house was pretty nice. Supply is really tight round here at the moment but I'm sure that will change over the next year.

I fear the vendors of this place may be staying where they are unless they have some equity in the house they are prepared to walk away from. It's a shame you don't get to do some due diligence on vendors to find out how leveraged they are. Maybe we could have a statement of borrowing added to the HIP to assist buyers in screwing over vendors.

Just wait a few months and deal with the bank that repossesses the house.

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Start and finish at 250. Its what you want to pay. Why pay more?

I am not familiar with the area but how many years rent is the 60 grand you are about to lose?

Ignore the dreamers that suggest silly offers, you will just make yourself look stupid and the agent wont want to work with you in future. The only possible reason the vendors would sell for less than they paid is if they HAVE TO. If their situation dictates this then they may take less, My experience tells me that the figure would be in the low thousands not the 10's of thousands.

If you like the house then someone else no doubt will too, and that person may well be prepared to pay a fair price for it. Bear in mind whilst the overall market has dropped 10% good properties in good areas have held up whilst flats and ex council houses have experienced the 20+% drops skewing the stats.

good luck

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Ignore the dreamers that suggest silly offers, you will just make yourself look stupid and the agent wont want to work with you in future. The only possible reason the vendors would sell for less than they paid is if they HAVE TO. If their situation dictates this then they may take less, My experience tells me that the figure would be in the low thousands not the 10's of thousands.

If you like the house then someone else no doubt will too, and that person may well be prepared to pay a fair price for it. Bear in mind whilst the overall market has dropped 10% good properties in good areas have held up whilst flats and ex council houses have experienced the 20+% drops skewing the stats.

good luck

I would suggest that the OP look at non frogs other contributions to HPC - you will find that non frog talks a great deal of sense based on knowledge and experience.

Also look at yourfriendlyestateagents contributions to HPC and see how often he/she comes on to push the typical Estate Agent line about property buying and selling.

I would suggest that it is worth remembering that in a normal market (when prices are close to trend and transactions are also at close to trend levels) it is normal to start with an offer of -10% from the asking price (assuming that the asking price is in line with the trend of asking/selling prices for the locality) and that in a difficult or crashing market (and this market continues to be in crash territory in terms of transactions - the market has shrunk by at least 50% since 2007 and in many localities Estate Agents are only selling 33% of what they were selling in 2006 - see the Land Registry data) it is normal to make a first offer of -20% to -30% of the asking price. Don't let the silly childish games Estate Agents play put you off from putting offers at these sensible levels - people who make property their business make these kinds of offer in ALL types of market as a matter of course. If the EA starts playing up, or you think they will, just make sure you send a copy of the offer to the vendor directly as well as to the EA (do all this in a polite and professional tone). I know loads of people who have made offers of -20% to -30% and occasinally -40% of asking price and it hasn't stopped them getting the properties they want/are happy to have got.

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I'll never understand why people are afraid to make low offers.

You send an e-mail, they say no.

You either up the offer, or leave it on the table.

If the estate agent acts all huffy and suggests that your offer is a joke, just remember that he's a tosser in a Next suit. He works for the seller, not for you.

Me neither, people seem to be worried about harming other people feelings, when full well if the boot were on the other foot the vendors would jump at the chance of a gazumping offer.

Now that said, most private vendors are reluctant to realise a loss and usually need a repossession order in the offing to motivate them into action. However, I have found that most commercial organisations selling property are happy to take a hit by selling at a realistic price.

My own house was bought from a developer who had part exchanged it in 2008. They ended up taking a £150k hit, and I feel much less poor for it.

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Mr Moon I cant take any thread of your seriously after your intellectual thrashing on the other post.

All I am doing on here is offering an honest take on issues that some of the regulars may have no real understanding of. I have a vested interest

in prices coming down as my children will be wanting to buy a house at a fair price at some point in the not too distant future.

The fact remains that some agents will feel it is their duty to inform their vendors that they have a serial low offering 'buyer' on their hands, often to save wasting their clients time.

You have to deal with reality rather than soundbites and bravado about low offers. Dont be afraid to offer low, but make it realistic and relative to the property on offer.

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One piece of advice I have to offer , given your position of having nothing to sell , is to be prepared to walk away .

There will always be other houses , and remember that to a desperate seller a first time buyer is like Gold dust .

When I was buying I saw a house (which was very nicely decorated , but only 2 bedrooms) offered for £145,000 . I offered £120,000 and was refused . The EA , smarmingly said to me "What are you going to do now ?" I said "look for something else . That didn't impress him !!!

The following day I put an offer in for a 3 bed house , that needed work , but had a nicer garden for £120,000 (It was originally up for £150,000) . We negotiated ,and I got it for £123, 250 .

Remember , a house(or anything) is worth what someone is prepared to pay for it , no more no less

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We're just into that 9 month countdown. I'm fine with continuing to rent for the next couple of years while we wait for sanity to return to the market. The place we currently have is a (admittedly very nice) 2 bedroom cottage in a village just outside Sevenoaks. The place is quite small for the two of us, but of course we can manage because the nipper will share our room.

How so? This is ringing my warning bell!! A two bed small for a couple!!!

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Ok, you have the kid and need the second bedroom, would like a third bed as well, but as a FTB why take such a huge financial gamble? Better to buy a house similar to the one you were renting and get used to having a mortgage (a life changing experience as much as having a kid is). What's great is that you already have a huge deposit so you can get a great mortgage on a smaller house with a great rate because your LTV will be good. You haven't talked about the mortgage side which is at least as important an issue as the house!!!

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Have you looked on mouseprice.co.uk and nethouseprice and tried to see what other properties in the street / area of similar size are selling for?

Despite what the estate agents are saying you can get bargains I do it for a living but the vendor needs to be motivated to do so, which normally means they need to move quickly for some reason or another and your advantage is your not in a chain. If they're in no hurry to move and want to wait to the right offer, then you'll need to be fairly close to what they're looking for. Having an idea of what other properties are actually selling for can help you be realistic about this.

There is nothing wrong with your making offers that are a bit under the market value, just be polite with the agent and then leave it out there and carry on your search. If they don't get any better offers they may come back to you. I guess the main thing is no one in any deal wants to feel like they're loosing out. As the cliche goes, the best deals are win/win. So of course no seller is going to want to sell a property for less than they paid and invested in it. So focus on the fact you're a first time buyer expecting a baby and talk about the budgets you have available which is more likely to be viewed with sympathy from the vendor and agent. If they feel that you have more money to spend but just looking for a bargain at their expense, then I guess you could understand why they'd be less interested in taking a hair cut on their property price.

The trouble at the moment in most areas of the SE and London which works against you is a shortage of supply and increased demand, especially in the first time buyer market who have found access to funds harder to come by so there is pent up demand. Lots of people 'desperate' to get on the ladder, which makes it more of a sellers market.

One thing to note: when an estate agent says 'the seller wont entertain an offer', request they make the offer anyway, they have no right to withhold an offer from the vendor, often times estate agents will do this motivated by their own commission which is a percentage of the selling price, let the vendor reject your offer not the EA. They're a thick skinned bunch, don't worry about hurting his/her feelings, just insure you're very polite and respectful in the way you deal with them. The worse that can happen is your offer is rejected.

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