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exiges

Handling The Deluded

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OK, we've identified a property we'd like to acquire, but the vendors have it up for about 30% more than equivalent properties.

Has anyone had the job of trying to talk a vendor down from their cloud cuckoo land ? What tactic did you employ ? Did it work.

It's a direct sale, so there's no agent to wave coffee under their nose.

Why not buy the other equivalent properties you ask ? Well, we're looking to a buy a property that comes with a business, and these other places are few and far between across the country.. and while the other properties are in great locations, with good schools, equal turnover and equal property prices we'd like to stay local to our friends + family. So objectively, there's nothing that makes the property more valuable than the others.

Edited by exiges

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OK, we've identified a property we'd like to acquire, but the vendors have it up for about 30% more than equivalent properties.

Has anyone had the job of trying to talk a vendor down from their cloud cuckoo land ? What tactic did you employ ? Did it work.

It's a direct sale, so there's no agent to wave coffee under their nose.

Why not buy the other equivalent properties you ask ? Well, we're looking to a buy a property that comes with a business, and these other places are few and far between across the country.. and while the other properties are in great locations, with good schools and equally high property prices we'd like to stay local to our friends + family. So objectively, there's nothing that makes the property more valuable than the others.

Clearly it is more valuable to the right buyer (you, if you pay up) than 'equivalent' properties.

If it's not more valuable, then move on!

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OK, we've identified a property we'd like to acquire, but the vendors have it up for about 30% more than equivalent properties.

Has anyone had the job of trying to talk a vendor down from their cloud cuckoo land ? What tactic did you employ ? Did it work.

It's a direct sale, so there's no agent to wave coffee under their nose.

Why not buy the other equivalent properties you ask ? Well, we're looking to a buy a property that comes with a business, and these other places are few and far between across the country.. and while the other properties are in great locations, with good schools, equal turnover and equal property prices we'd like to stay local to our friends + family. So objectively, there's nothing that makes the property more valuable than the others.

Looks like you're onto a loser - even IF you could persuade the owner that the "correct" price is the same as the other properties, chances are, these are 20-40% overpriced too.

I doubt that the seller is going to be happy with a 50-60% reduction on his "deluded" price.

As has been said above, what is the property worth to you?

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This is how it usually goes unless these people have decent business acumen:

- You cannot argue the logic of the overpricing with the vendor, so no point trying

- These people have to learn the true market value of the property through experience

- if you make a "low" offer they will feel insulted and take it personally

- other people will also make low offers

- they will eventually realise they have overpriced and ultimately lower the price or accept a "low" offer

- they will not go back to you because they are too proud to do so, it will make them feel weak and they feel you insulted them, even if you made the only offer

The only solution I have been able to come up with in such situations is as follows:

- They have to be lead down this process - these sorts of people only learn slowly

- You cannot be the one to "insult" them

- Get a mate to make a lower offer than you are willing to pay, this will be rejected as an insult

- Wait a few weeks/months

- Get another mate to do it again

- Wait again

- Make your offer

HTH

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As has been said above, what is the property worth to you?

Am I reading this on the HPC website ? This site is all about buying property for the right price, not some emotional purchase because "we must have it", that's what got house prices where they are.

Not only that, if you read above you'll see it's also tied to a business, which generally have guidelines regarding valuations (ie. multiples of turnover etc).

It clearly isn't equivalent, otherwise, you'd go for one of the others that are cheaper.

Did you read what I wrote ? Objectively it has the same value as other homes/businesses.

The fact I'm tied geographically, something other buyers may not be, prevents me from buying the others.

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The only solution I have been able to come up with in such situations is as follows:

- They have to be lead down this process - these sorts of people only learn slowly

- You cannot be the one to "insult" them

- Get a mate to make a lower offer than you are willing to pay, this will be rejected as an insult

- Wait a few weeks/months

- Get another mate to do it again

- Wait again

- Make your offer

Thanks for the advice.

The vendor has already rejected "many offers" that were "a joke". It's been on for a year now at the same price.

I would have thought those going before me would have softened them up, but they seem steadfast.

I haven't put my offer in yet, but as you say, once you've been rejected they're unlikely to back down so I want to plan my approach carefully.

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I have found, as a cash buyer, putting in a low offer is met with ridicule from seller and EA alike.

I then wait several months only to see the same house reduced to my offer or lower. When I enquire of the EA what happened I am told that the bank's surveyor down-valued the property.

In short, a cash in hand buyer appears to be something to be despised, but the bank's surveyor report is like a sermon from the mountain.

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In short, a cash in hand buyer appears to be something to be despised, but the bank's surveyor report is like a sermon from the mountain.

That gives me an idea.. perhaps I should get a bank surveyors report done, then pay cash

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I have found, as a cash buyer, putting in a low offer is met with ridicule from seller and EA alike.

I then wait several months only to see the same house reduced to my offer or lower. When I enquire of the EA what happened I am told that the bank's surveyor down-valued the property.

In short, a cash in hand buyer appears to be something to be despised, but the bank's surveyor report is like a sermon from the mountain.

I think that this is part of the reasons why sales volumes are so low. Many cash buyers are negligent in their approach and don't get valuations done. Sellers are hoping to find a cash rich mug who will pay much more than a leveraged buyer will be allowed to pay by his lender.

A viable strategy might be to negotiate to say 88% of the asking price. Even though you are a cash buyer, you should still get structural and valuation (both market and lending security values) surveys done anyway.

Once you have the surveys in hand, you can then try to negotiate to the lending security value before exchanging if the evidence from the surveys only supports a lower price.

If you like the house and want to buy it, this helps keep your relationship with the vendor on a good footing. You are not willing to buy more than the price that a leveraged buyer could pay. You are making your point in a professional manner with supporting documentation rather than an opinion.

This approach probably works best with true sellers (the 4 Ds : debt, death, divorce, developers). It probably won't work at all with the kite flyers no matter how much evidence you procure.

The trick is to find a conservative surveyor. Depending on your relationship with your bank, they might be able to point you in the right direction.

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That gives me an idea.. perhaps I should get a bank surveyors report done, then pay cash

I was obviously too slow in typing but yes, this does seem to be a good strategy albeit quite expensive if vendors refuse to accept survey values.

My view of the market is that having an offer accepted is only really a signal that negotiations are going to begin in earnest.

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That gives me an idea.. perhaps I should get a bank surveyors report done, then pay cash

Get an independent valuation done, when it comes back at a much lower price than they are asking if you go in above that as the property is clearly worth a little more to you as its being local then it wont seem like so much of an insult.

Failing that if its been on the market a year and at a "deluded" price, chances are they are not serious sellers, just these people that put their properties on the market at silly prices, if someone pays up, great they will move on buying a property at a lower price making some money, if not they are happy to stay where they are. They may have looked at other properties like you and they may not be in the situation of needing to be in a specific geographical area so figure its worth trying it to make a few quid then they could get one of the other properties. Ive seen this quite a lot, there is nothing much you can do, much better leaving well alone dont waste ur time or money and wait for a willing seller.

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I also think it is still too early in the year - end of Summer would surely be better to put in a low cash offer... then again, round my way EAs shortly begin telling anyone who will listen that the Summer months are quiet and that September is the boom month for sales... unrealistic expectations again...

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It's best to make a stand early.

Up to a couple of weeks ago we hadn't viewed a house since last August. Then I saw one that I thought would be worth a look if reduced. Phoned the agent and said if the vendor would accept at least 14% off I would view it. Agent phoned back and said vendor negotiable down to 7% off, do you want to view? I said no. A couple of days later agent phoned back, vendor has reconsidered and is interested in the figure you mentioned.

If everyone made viewing dependent on a reduction, surely it would make vendors think their price was too high?

It could be they agree to a reduction prior to viewing just to get you there but what have you got to lose? You are no worse off than just viewing without prior negotiation. I cannot see the point in viewing a house you aren't really interested in at the price because it makes the vendor think people are interested at the price and it makes everyone they tell they have had a viewing, think people are interested at that price. It would be much better if they told their neighbour "Nobody will even view our house if we don't knock xx% off."

Let's trash the viewing numbers!

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This is how it usually goes unless these people have decent business acumen:

- You cannot argue the logic of the overpricing with the vendor, so no point trying

- These people have to learn the true market value of the property through experience

- if you make a "low" offer they will feel insulted and take it personally

- other people will also make low offers

- they will eventually realise they have overpriced and ultimately lower the price or accept a "low" offer

- they will not go back to you because they are too proud to do so, it will make them feel weak and they feel you insulted them, even if you made the only offer

The only solution I have been able to come up with in such situations is as follows:

- They have to be lead down this process - these sorts of people only learn slowly

- You cannot be the one to "insult" them

- Get a mate to make a lower offer than you are willing to pay, this will be rejected as an insult

- Wait a few weeks/months

- Get another mate to do it again

- Wait again

- Make your offer

HTH

Yes, all this is valid. The concept of them being personally insulted by you and then refusing to come back to you is ludicrous. Even some EAs operate in this way - taking it personally.

Edit:

Although the idea of making an offer, waiting a few months, etc, kind of points to getting out there now and making low offers, waiting for the Summer to come and go... then seeing what happens to those asking prices come Sept.

Edited by The Masked Tulip

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Whatever happened to the term "house." wink.gif

Because it comes with a business, the house only constitutes part of the property purchase.

Not just that, but when I left school, a good 23yrs ago, I worked as an Estate Agent for a few weeks, they drummed into you to always refer to the property you wanted to appear distant to as "the property" and the one you wanted to talk of fondly as "the home".

Edited by exiges

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OK, we've identified a property we'd like to acquire, but the vendors have it up for about 30% more than equivalent properties.

Has anyone had the job of trying to talk a vendor down from their cloud cuckoo land ? What tactic did you employ ? Did it work.

It's a direct sale, so there's no agent to wave coffee under their nose.

Why not buy the other equivalent properties you ask ? Well, we're looking to a buy a property that comes with a business, and these other places are few and far between across the country.. and while the other properties are in great locations, with good schools, equal turnover and equal property prices we'd like to stay local to our friends + family. So objectively, there's nothing that makes the property more valuable than the others.

hmm, regarding the business remember the adage 'turnover is vanity, profit is sanity'

What sort of business is it, if you are at liberty to say?

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Has anyone had the job of trying to talk a vendor down from their cloud cuckoo land ? What tactic did you employ ? Did it work.

I STR'd at the end of 2005, and started making cash offers at the end of 2008. So far no-one has accepted my 20-30% below asking price offers. On a very few occasions there have been counter offers, but generally the dialogue dies with the first offer. What makes it harder is that I'm picky buyer, after all I didn't STR to get a cr@p house cheap, I STR'd to get a great house at a decent price.

Bottom line is that I'm no longer expecting an acceptance. The only way a seller will accept a 20-30% price drop in one bite is if they're a desperate, forced seller, and we need far more repossessions to get to that position.

The only advice I can give is walk away and wait for however long it takes for the market to do your negotiating for you.

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Get an independent valuation done, when it comes back at a much lower price than they are asking if you go in above that as the property is clearly worth a little more to you as its being local then it wont seem like so much of an insult.

Failing that if its been on the market a year and at a "deluded" price, chances are they are not serious sellers, just these people that put their properties on the market at silly prices, if someone pays up, great they will move on buying a property at a lower price making some money, if not they are happy to stay where they are. They may have looked at other properties like you and they may not be in the situation of needing to be in a specific geographical area so figure its worth trying it to make a few quid then they could get one of the other properties. Ive seen this quite a lot, there is nothing much you can do, much better leaving well alone dont waste ur time or money and wait for a willing seller.

+1

There are lots of people who will sell only if they get silly money. No independent valuation will change their mind. The deluded price is what they will accept.

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I STR'd at the end of 2005, and started making cash offers at the end of 2008. So far no-one has accepted my 20-30% below asking price offers. On a very few occasions there have been counter offers, but generally the dialogue dies with the first offer. What makes it harder is that I'm picky buyer, after all I didn't STR to get a cr@p house cheap, I STR'd to get a great house at a decent price.

Bottom line is that I'm no longer expecting an acceptance. The only way a seller will accept a 20-30% price drop in one bite is if they're a desperate, forced seller, and we need far more repossessions to get to that position.

The only advice I can give is walk away and wait for however long it takes for the market to do your negotiating for you.

I had an STR offer 10% off my asking last year but I went with the person who offered asking. The sale fell through, but I couldn't have made my next move with 10% less. I was in a position where I would have liked to move but it was not essential. In fact, pleased I stayed now.

I agree that only forced sellers will accept lower offers. And until more people are forced, nothing will sell.

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I cannot see the point in viewing a house you aren't really interested in at the price because it makes the vendor think people are interested at the price and it makes everyone they tell they have had a viewing, think people are interested at that price. It would be much better if they told their neighbour "Nobody will even view our house if we don't knock xx% off."

Let's trash the viewing numbers!

I always looked at houses just outside my range and made offers that are open. On my current house, sellers said they would not consider the offer, yet after a few weeks, I got a call from the agent.

I see no harm in making an offer and leaving it. What always annoys me is the agent coming back and asking if I want to increase the offer. I tell them I don't. Last year when they returned, I reduced it by £5K. And got the offer accepted.

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I always looked at houses just outside my range and made offers that are open. On my current house, sellers said they would not consider the offer, yet after a few weeks, I got a call from the agent.

I see no harm in making an offer and leaving it. What always annoys me is the agent coming back and asking if I want to increase the offer. I tell them I don't. Last year when they returned, I reduced it by £5K. And got the offer accepted.

If you leave an offer open ended it gives them a warm glow inside because they think that if the worst comes to the worst they have your offer to fall back on but might as well try for more. You are also a bargaining tool to use against other people that might be interested. So I would never leave an open offer on the table.

Don't listen to me though because I'm useless at buying houses.

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  • 284 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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