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Putting in low offers


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6 hours ago, adamLancs said:

Did anybody ever put in a low offer, say < 90% asking price and not get treated like a brown stain on the mattress by the estate agent? Does that ever happen, ever?

Yep - I put in an offer of just over 80% with a list of issues with the property (former structural engineer) and the ea said that it's understandable and he'll pass the offer on but doesn't think it will be accepted - perfectly polite with it.  I had a couple of goes with small increments up, but the vendor wanted more than it was worth.  Walked away in the end, and eventually a builder bought the property at ~ 10% below asking (to live in).  Probably financially viable for him as he could do the majority of the work himself or at mates rates.

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7 hours ago, AvoidDebt said:

I thought 50% of property on rightmove never sells. 

If that is true then 50% of the vendors of property on rightmove are kite flying time wasters and not serious about selling. If someone is taking a punt at a higher price they are still in control. If they don't get an offer, obviously, they wont sell. If they drop the price they will. 

They are still in control. They have the contract with the EA and the EA is acting for them. 

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3 minutes ago, adarmo said:

Sorry for being slow but I've missed the point you're making.

Let's say a vendor is quite keen to sell, but has been on the market for a long while and hasn't received an offer. The vendor realises he could cut the asking price, but he feels conflicted - maybe someone who has viewed or is about to view will be prepared to offer close to asking. It would be a shame to cut the asking price in this case, as the buyer would likely see this as a signal and offer lower than he would otherwise. This vendor might accept a low offer. Getting 30% seems unusual, but I think my hypothetical scenario could easily explain someone being prepared to accept 10% off, yet being reluctant to reduce the asking price.

I think this probably describes quite a lot of vendors currently. They want to believe the EA's claim that they will get close to asking price. But they also worry that the market has turned, or is turning. I think it's worth considering making a low offer in such a situation. If nobody makes an offer I'm not sure the sense in which vendors can be considered to be in control. Either prices will steadily rise forever, or at some point there will simply be no offers near asking prices. Either there will be no offers and hence no transactions. Or there will be low offers which may or may not be accepted.

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On 21/05/2017 at 9:23 AM, GreenDevil said:

Bear in mind that if you do make a low offer the agent will use it to his advantage. He will then call any other interested parties, "there is an offer now on house x" "are you still interested do you want to make an offer ?"

I am not sure it depends on your approach. I am in the process of selling 3 properties my own, mum in laws under probate and mum and dads, since Dad went and we bought mum a flat in a retirement community closer to us 

dealing with 3 different agents all different ages two chain and one good local guy

I have dealt with far worse in business frankly, Polite and on the ball.

Perhaps if you start off with the above view you have created a self fulfilling prophecy ? Treat them like a professional and you could be surprised 

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9 hours ago, adarmo said:

If that is true then 50% of the vendors of property on rightmove are kite flying time wasters and not serious about selling. If someone is taking a punt at a higher price they are still in control. If they don't get an offer, obviously, they wont sell. If they drop the price they will. 

They are still in control. They have the contract with the EA and the EA is acting for them. 

Being forced to reduce the asking price in order to get an offer/sale doesn't sound like they're totally in control to me.

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4 minutes ago, Lavalas said:

Being forced to reduce the asking price in order to get an offer/sale doesn't sound like they're totally in control to me.

Who is forcing them? They can choose to drop the asking price. They are in control even in a buyer's market. 

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On 21 May 2017 at 6:15 AM, Grab_Some_Popcorn said:

I find it hard to find evidence of value... Such low volumes for last few years that similar properties in local area are few and far between.  Maybe be I should start a log using the houseprices.io website and rightmove listings.

Without comparables I would exercise real caution. 

Anything I ever bought I ensured the seller needed to sell. Once the offer is accepted I always stuck with it.....but in negotiating the sales it was important their eyes bled first. However it is horses for courses..and definitely some exceptions. 

2001, I bought a 1000 sq ft ground floor flat in a huge Victorian terrace over looking prestige gardens in our town. My dream place and the only place I ever bought as a 'BTL' until we could grow old and move into it. Nasty decor but good kitchen, bathroom and dry. (Rare for these). I had missed 2 of these in the year at £75k but they were were very damp and therefore needed full £30k refurb. So asking £79,950 I viewed pre market (ie sign was literally being put up as I drove by)....I walked in a EA was measuring up and he told me no viewings yet, but I had now already seen it. A development was about to come on down the road and the flats were starting at £200k and I suspected this mixed road (b&bs, bedsit, nasty flats like this and HMOs) which is the prettiest place, I know was about to explode in price. 

My offer? £78k, vendor paid for removal of huge fridge and met the £3k cost for roof outstanding. 

Their reply....£79,950, I remove fridge and I pay roof costs. Or it goes to an open day. 

I agreed and the day we completed I saw a huge uplift as the development (and numerous subsequent developments) began all down the road. 

So no formula on low offers. But 'generally' a low offer in the first week is refused. 

I know you said comparables are difficult. So for me, that's a concern. All houses are too much, particularly now, and the ones I bought I ensured were well well well below comparables. So without comparables the EA, vendor and you are all guessing....and the probability is that is is unlikely they will all guess low.

edit. Changed mind and I sold flat few years ago....relative modest overall gain for 12 years held. I intend to sell everything as tenants move on. Cash...not property for me. 

Edited by Phil321
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9 hours ago, Kosmin said:

Let's say a vendor is quite keen to sell, but has been on the market for a long while and hasn't received an offer. The vendor realises he could cut the asking price, but he feels conflicted - maybe someone who has viewed or is about to view will be prepared to offer close to asking. It would be a shame to cut the asking price in this case, as the buyer would likely see this as a signal and offer lower than he would otherwise. This vendor might accept a low offer. Getting 30% seems unusual, but I think my hypothetical scenario could easily explain someone being prepared to accept 10% off, yet being reluctant to reduce the asking price.

I think this probably describes quite a lot of vendors currently. They want to believe the EA's claim that they will get close to asking price. But they also worry that the market has turned, or is turning. I think it's worth considering making a low offer in such a situation. If nobody makes an offer I'm not sure the sense in which vendors can be considered to be in control. Either prices will steadily rise forever, or at some point there will simply be no offers near asking prices. Either there will be no offers and hence no transactions. Or there will be low offers which may or may not be accepted.

Price is determined by the market. The vendor is not in control of the market. They are though in control of their sale. They choose whether or not to accept offers. Buyers are in no way in control of that, only how much they offer. 

Property had zero offers vendor can choose to stick with it, lower price or remove from market

With one offering party the vendor chooses whether or not to accept or keep marketing. 

With multiple offering parties the vendor chooses which purchaser to go with. 

The only control a purchaser has is whether or not and how much to offer.

No amount of wishful thinking will suddenly put purchasers in control. Purchasers do not chose what offer is accepted, nor which party purchases. The power a purchaser has might vary but the ultimate decision maker is the vendor. 

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3 hours ago, Greg Bowman said:

I am not sure it depends on your approach. I am in the process of selling 3 properties my own, mum in laws under probate and mum and dads, since Dad went and we bought mum a flat in a retirement community closer to us 

dealing with 3 different agents all different ages two chain and one good local guy

I have dealt with far worse in business frankly, Polite and on the ball.

Perhaps if you start off with the above view you have created a self fulfilling prophecy ? Treat them like a professional and you could be surprised 

Hmmm, well personally i havent met a nice EA yet. It must be me.

Are you an EA by any chance?

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2 hours ago, GreenDevil said:

Hmmm, well personally i havent met a nice EA yet. It must be me.

Are you an EA by any chance?

Nope but I have been running a B2B It services business for over 25 years. Doing deals that involve often six figures. Good clients get good suppliers doesn't change just because they are an EA

Same as any deal take time to understand their drivers and turn off the home movie (all EA's are w*****) you might be surprised at the results.. works in life in general as well ;)

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3 hours ago, adarmo said:

No amount of wishful thinking will suddenly put purchasers in control.

I'm pretty sure I didn't say argue they could be! I just argued that as the seller can only accept or reject offers it might be a good idea to make offers.

 

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22 hours ago, adarmo said:

The seller is always in control, even in a buyers market. They can choose to accept an offer or not. There is one seller and many potential buyers.

Nope. Sellers can just keep their cash in the bank. the seller is attempting to convince the buyer to buy. Would you say the car dealership is always in control?

On the other side, vendors can be forced to sell, e.g. the bank calls in the mortgage, they have no other resources to buy food or fuel, they have inheritance theft to pay to the government, etc, etc

 

Quote

If you don't buy it someone else will. 

You hope. Why not "If you don't sell, someone else will."?

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I have an ex-colleague trying to sell her 4br house right now. In another thread I wrote about the glut of 4br houses on the market in my area now.

Her house is not like the others it's an older build and in a desirable road. It was put on the market at the start of the year as part of a divorce settlement. The house has been under offer 3 times now and no sign of a sale proceeding.

The problems seems to be that the chains keep breaking. The "buyers" are happy with the price and it's never on the market for long. There are no cash buyers it seems for these properties over 400k. They rely on mortgages and a chain of properties being sold.

The other 4BR houses in my area are not even going "under offer" so far. These are almost identical new builds.

 According to the seller it's the chains that keep failing but I don't know at what level. 

This sale is one of the D's (i.e. death, divorce etc) that supposedly force sales. I don't know about all the other 4BR properties on the market in my area.

Don't know what will happen next. She is prepared to drop the price for the right buyer.

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I have suffered massively from chains even in good times; it only needs the weakest link to go pop and everything grinds to a halt. At a time like this when volumes are low to begin with then it must be almost impossible to get anything done.

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1 hour ago, Locke said:

Nope. Sellers can just keep their cash in the bank. the seller is attempting to convince the buyer to buy. Would you say the car dealership is always in control?

On the other side, vendors can be forced to sell, e.g. the bank calls in the mortgage, they have no other resources to buy food or fuel, they have inheritance theft to pay to the government, etc, etc

 

You hope. Why not "If you don't sell, someone else will."?

Yes, the seller can choose to keep their money in the bank, or to accept and offer, or even to sell in the first place. A car dealership is always in control. If they don't want to sell to you they wont. They might do you a deal because they want to hit their targets... their choice. They might be good at making you feel like you're in control. 

A bank can't call in a mortgage. It is not an overdraft, it is a term loan. Non compliance with the terms  can lead to the bank taking charge of the property and selling it. The bank is the seller. The bank is in control of the offer they accept and who they sell it to. 

 

If I don't sell someone else will? That is an inane argument. Someone else will sell that house to me if the vendor doesn't?

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1 minute ago, adarmo said:

Yes, the seller can choose to keep their money in the bank, or to accept and offer, or even to sell in the first place. A car dealership is always in control. If they don't want to sell to you they wont. They might do you a deal because they want to hit their targets... their choice. They might be good at making you feel like you're in control. 

A bank can't call in a mortgage. It is not an overdraft, it is a term loan. Non compliance with the terms  can lead to the bank taking charge of the property and selling it. The bank is the seller. The bank is in control of the offer they accept and who they sell it to. 

 

If I don't sell someone else will? That is an inane argument. Someone else will sell that house to me if the vendor doesn't?

Ok dude, whatever you say. The seller is in charge. Keep that in mind when you try to shift yours.

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2 hours ago, Kosmin said:

I'm pretty sure I didn't say argue they could be! I just argued that as the seller can only accept or reject offers it might be a good idea to make offers.

 

That wasn't really aimed at you, but more at the people arguing that the purchaser is in control. 

Frankly, to play the game one must understand the rules. Once it is accepted that the market sets the price but the vendor chooses which offer and from whom to accept we can play.

I'm offering on a property at the moment. The vendor has a tight timescale and no onward. I have no chain and GF is a solicitor, and former colleague a mortgage broker so I have everything lined up for a speedy turn around. They're still pressing me for a higher offer and a tight turn around. 

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1 minute ago, Locke said:

Ok dude, whatever you say. The seller is in charge. Keep that in mind when you try to shift yours.

What a ground breaking and convincing argument you've presented :D.

Perhaps I should call up the EA right now, let him know I am the buyer, that I am in charge and demand his vendor accepts an offer of £1 to include all furniture, fixtures and fittings. Actually, no, he should be paying me for taking it off his hands. 

It's not whatever I say, it is just logic. 

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47 minutes ago, adarmo said:

That wasn't really aimed at you, but more at the people arguing that the purchaser is in control. 

Frankly, to play the game one must understand the rules. Once it is accepted that the market sets the price but the vendor chooses which offer and from whom to accept we can play.

I'm offering on a property at the moment. The vendor has a tight timescale and no onward. I have no chain and GF is a solicitor, and former colleague a mortgage broker so I have everything lined up for a speedy turn around. They're still pressing me for a higher offer and a tight turn around. 

 

Well just like every buyer, you've got all your own reasoning to pay a price which a seller will accept for the type of home you want.   And you seemingly are ready to proceed at somewhere around £400K-£450K.   Down on the £480K original listing price. :)   (Keep those cuts coming).   You also have conviction in your belief that owners are more in control (it seems to me) in your questing to buy in this market. :)

I have no intention of paying these prices, but I fully back those who choose to pay these prices.  They know what they are doing.  It's a market.  Your/their sovereign choice.   All the people around you that you're tapping for advice, info and to transact (if seller and you as buyer can agree a price) have their view too.

Respecting you.   Not one of these HPCers who has spent their lives as Raging-Superior-Ego in their claims that 'no-one else knows what they are doing' (against HPI++++ and years and years of being proven wrong in reality), and placing owners of 'the last 15 years' as the victims, seeking bailout for owners if there is any HPC.

Markets can change.   Low inventory, low rate deals (etc) may not last forever.  Section24 already giving a few BTLers headaches to deal with 'portfolios' of houses, and ratcheting on them over the next few years.

I am almost certain that when I buy, it will be at a price that someone else believe way too high.  Market.

Owners/sellers do have stronger position in this market (in many areas where one would like to live in for work etc).   That's one reason I do not intend to buy in such a market.   Been that way for a long time.  HPCer and hard-pro-HPI+++ some years ago; "Doesn't need to sell so won't take lower price."  (£500K type properties prolly worth lot more today).    Doesn't always hold that they always have the strongest position in negotiations, and the value of properties are subject to what happens in the wider market at the margin.   Sentiment and conditions can change.  If you buy in this market you make your choice, and good luck to you.  You know your own mind and position better than the superior-egos.  

On 5/22/2017 at 2:56 PM, adarmo said:

I've recently viewed and offered on a property that was listed at £480k and quickly reduced to £450k in a south east market town about 1hr by train from London. First offer is £410k. 2nd viewing tonight with surveyor step dad in law to be (if that's not a thing I lay claim to having invented it). I narrowly missed out on something slightly smaller, with less of a plot but in a nicer road about 5 months ago (with same EA too) and that went for £414,500. They are much of a muchness so I'm expecting to get it for about 5% under. 

Some of the stuff posted on here is a bit mental. If it's already cheap there will be a flood of buyers. If it isn't and it's just gone up for sale you'll likely annoy the vendors/EA. The other risk is they think you can't afford it. 

Anecdotally, the one I lost earlier in the year I'd gone in at £385k (listed at £425k). My final offer was £3.5k higher than the completion price. Randomly bumped into the agent in a health spa (the other half is a member and took me along) she pretty much confirmed that very lower offers can lead to a lack of credibility (re affordability). 

Some people saying the buyer is holding all the cards are just flat plain wrong. The seller is always in control, even in a buyers market. They can choose to accept an offer or not. There is one seller and many potential buyers. If you don't buy it someone else will. 

 

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1 hour ago, adarmo said:

The vendor has a tight timescale and ...they're still pressing me for a higher offer. 

They sound brave or silly. Did they say why the tight timescale? Do you believe them? If they are absolutely constrained by a date, you might consider proceeding as quickly as possible and give every reassurance. Then once you are ready to exchange, and it's too late for them to find another buyer, lower your offer.

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Just say no. Here in Brighton ex student houses seem open to offers Other property still coming on at silly prices but reduced within a fortnight now whereas they hung on a lot longer before about March.Seem to be going down in 25k chunks or not at all. 

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