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frmarcus

What Should I Offer, Please?

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Advice would be much appreciated.

I wish to buy a new build in Peterborough - one of the last two remaining of about 75. I know properties have been shifting slowly on this development over the past couple of years. The asking price has dropped to £199995 as a 'special offer' (ie, we want to shift the last few). Having checked comparable properteied on the development, the cheapeast of this spec went at £183000 some time back (for an asking price well over £200000).

The max I want to pay is £180000 - but I'd like to pay no more than £175000. What's the lowest offer I could put in without be laughed at? I have mortgage approval in principle, am a first-time buyer (no chain), and can complete quickly.

The bank manager told me today he's just bought a house nearby for £104000; asking price £140000 - a 26% reduction. He advised an aggressive offer as it's a buyers' market.

Many thanks!

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Are you worried about being laughed at when you're taking on the biggest purchase of your life? If you offered the asking price they'd be laughing at you even harder - but with your money (or more to the point the bank's money) in their pocket.

Don't look at the house as being "worth" x amount - to you it is worth what you can realistically afford to pay for it. I notice this is your first post, so I would strongly advise reading as much as you can here to get a feel for what you can really afford - the fact that you can cover a mortgage now is not proof that you can cover it in the future.

Also be ready for the fact that an offer in principle might not materialise - you can use this to your advantage in dealing with the vendor.

Expect derision and condescension for any low offer you put in - this a vendor's / agent's / developer's job.

If this one doesn't come off, there will be plenty more opportunities in the future. And seriously, there is more to life than buying a house - I'm sure that sounds very condescending, but it's also true. Sadly too many people in the UK refuse to believe that - and screw themselves up in as a result.

I guess I've made quite a few assumptions about your position in the above post. Apologies in advance for where I am wrong.

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Advice would be much appreciated.

I wish to buy a new build in Peterborough - one of the last two remaining of about 75. I know properties have been shifting slowly on this development over the past couple of years. The asking price has dropped to £199995 as a 'special offer' (ie, we want to shift the last few). Having checked comparable properteied on the development, the cheapeast of this spec went at £183000 some time back (for an asking price well over £200000).

The max I want to pay is £180000 - but I'd like to pay no more than £175000. What's the lowest offer I could put in without be laughed at? I have mortgage approval in principle, am a first-time buyer (no chain), and can complete quickly.

The bank manager told me today he's just bought a house nearby for £104000; asking price £140000 - a 26% reduction. He advised an aggressive offer as it's a buyers' market.

Many thanks!

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Crash Gordon: Many thanks. I'm 45, so I've waited a bit for this first purchase; and I have 75% of the purchase price in savings. I won't, then, be borrowing much, and the mortgage is more-or-less definite., I take your point about the 'worth' of a house. I think my limit is c £180k, so I figure that an offer of £165-170k might result in that end figure - but I'm glad of opinions on that 'calculation'.

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Fair enough - I did figure I was making a few assumptions there ;)

The 'calculation' is near impossible to determine - at the end of a day any trade is merely agreement between buyer and seller, so there are no rules as to how to calculate your offer. Sure, you can look at recently sold prices, asking prices, local schools etc etc, but what your bank manager said tells you more - look at the developers and see if they're on shaky ground, for example; they might accept a derisory price if they're close to breaching their banking covenants.

The only rule you can stick by is start low and work up. I would actually be concerned if my first offer wasn't laughed at.

Good luck whatever you decide - and stick around; this forum provides an education in finance that you couldn't buy anywhere. Once you learn to weed out the tinfoil hatters and gold fanatics, you'll be amazed at what you're learning.

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Crash: Thanks. I've decided on an offer of £160k; that would give a mid-point of £180k, which I'd be content with. I'll make it tomorrow and see what happens...

Best wishes,

Marcus

---

Fair enough - I did figure I was making a few assumptions there ;)

The 'calculation' is near impossible to determine - at the end of a day any trade is merely agreement between buyer and seller, so there are no rules as to how to calculate your offer. Sure, you can look at recently sold prices, asking prices, local schools etc etc, but what your bank manager said tells you more - look at the developers and see if they're on shaky ground, for example; they might accept a derisory price if they're close to breaching their banking covenants.

The only rule you can stick by is start low and work up. I would actually be concerned if my first offer wasn't laughed at.

Good luck whatever you decide - and stick around; this forum provides an education in finance that you couldn't buy anywhere. Once you learn to weed out the tinfoil hatters and gold fanatics, you'll be amazed at what you're learning.

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Offered 170K today: rejected.

Don't be in too much of a rush to jump in with an increased price unless you really want the property and are prepared to pay extra for it.

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Don't be in too much of a rush to jump in with an increased price unless you really want the property and are prepared to pay extra for it.

Cat: Thanks. Having had the usual sales guff when the offer was rejected, with the adviser's slightly contemptuous 'look' that Crash mentiones, above, I said words to the effect that the offer remains on the table and that I was looking at other properties but would be please to hear from them if they reconsidered. Then the games began. An hour later - having been initially told that the £200k was already a discount and the £170 offer was 'way too low' - the adviser called to say they'd like to negotiate and a compromise offer of £185k (ie, the median of the difference between what they want and what I offered). I'd already told the adviser that I was checking Land Registry prices (she tried to claim that the sale price is the price properties normally go for!!!). The cheapest house of the same/siimar spec as the one I'm interested in went for £183k. I figure, then, that £180k is a reasonable maximum offer, so I'm thinking I'll come back with £175k, then £177.5k.

It's fairly evident that they're keen to shift this house, and I make a reasonable guess that no-one else has put an offer in, so I feel I can hold-out. I certainly don't want to lose it but I'm in no rush...

A bit of me wonders if I should have offered £160k so they'd have come back with the £180k 'compromise' I want...

Best wishes,

M

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Cat: Thanks. Having had the usual sales guff when the offer was rejected, with the adviser's slightly contemptuous 'look' that Crash mentiones, above, I said words to the effect that the offer remains on the table and that I was looking at other properties but would be please to hear from them if they reconsidered. Then the games began. An hour later - having been initially told that the £200k was already a discount and the £170 offer was 'way too low' - the adviser called to say they'd like to negotiate and a compromise offer of £185k (ie, the median of the difference between what they want and what I offered). I'd already told the adviser that I was checking Land Registry prices (she tried to claim that the sale price is the price properties normally go for!!!). The cheapest house of the same/siimar spec as the one I'm interested in went for £183k. I figure, then, that £180k is a reasonable maximum offer, so I'm thinking I'll come back with £175k, then £177.5k.

It's fairly evident that they're keen to shift this house, and I make a reasonable guess that no-one else has put an offer in, so I feel I can hold-out. I certainly don't want to lose it but I'm in no rush...

A bit of me wonders if I should have offered £160k so they'd have come back with the £180k 'compromise' I want...

Best wishes,

M

On the assumption that as a new build there is more than one suitable property for sale. I would wait a bit before increasing my offer

tim

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On the assumption that as a new build there is more than one suitable property for sale. I would wait a bit before increasing my offer

tim

Tim: Thanks. I'm sure you're right. I plan to make another offer this Friday, after they've 'stewed' a few days.

Marcus

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A bit of me wonders if I should have offered £160k so they'd have come back with the £180k 'compromise' I want...

I think everyone has such doubts after the event - "could I have got it cheaper?". Well maybe you could and maybe you couldn't but the best you can do now is to make sure your negotiations are tough so you don't know that you paid too much after you buy the house (if you buy the house).

If they are keen to sell the house then your offer price will be festering in their minds now. Give it time to fester as this helps them to lower their own expectations.

Most importantly, don't be afraid to lose the house.

Let us know how it goes.

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Sales adviser called today, asking whather I'd made a decision on their 185k offer a few days' ago. I offered 178k, which she said 'is a bit low' but she'd get back to me. She soon came back, offering 180k; I said 178k was my final offer, and if they were interested they had 'til Monday. Soon after she called again accepting - so I'm paying the deposit tomorrow!

I'm glad I held out. I suspect that if I'd increased my initial 170k offer to 175k instead of 178k, I might have got it for that - but I doubt any less than that. I'm content, however, that I know I've got a reasonable deal (Land Reg prices reveals that the cheapest similar house went for 183k and others somewhat more than that...)

Thanks for the good advice, all.

Best wishes,

M

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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