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Putting in low offers


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33 minutes ago, Venger said:

 

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. 

I have no intention of paying these prices, but I fully back those who choose to pay these prices.  

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.

 

 

Thanks Venger,

Yes, I guess in the main it will be the person who offers more than everyone else who wins. That might mean some of the competing purchasers either can't or wont go to that level. I still think prices are crazy, but what's the alternate if you see something you'll be happy living in for 20+years?

The funny thing about knowing what you're doing is that I was an estate agent for two years before going to uni in 2004. I then worked part time for three years and graduated debt free. 

For sure there will be pressures for BTL spivs and good riddance to them! 

The house we're going for has another offer on it markedly higher than than my first offer but hopefully that it their fire power gone. If they get it for more than we are prepared to go then I am in the same boat as you I guess :)

I would dearly love prices to come down (that's really what this thread is about) but I've been calling it wrong for a 8 years. 

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1 hour ago, Lavalas said:

The vendor has no control over whether they get that higher offer though right?

You're describing hypothetics. The seller is selling and they are in charge. If they don't get a high offer, they are still in charge and have a choice of whether or not to lower asking price, take lower offer, wait it out or withdraw from the market. What control does the buyer have? Whether or not to offer? That's it, no power of acceptance. 

With housing in particular it is a one to many relationship. There is one property like that, owned by one vendor and many potential purchasers. 

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1 hour ago, Kosmin said:

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.

IMHO they are neither. They have another (higher at the moment) offer on the property and frankly it's priced very competitively (most, but not everything out there is overpriced thank goodness). 

They have a tight timescale as elderly and one is moving into care. She is very frail and, maybe I'm a mug, but I don't feel I could 'gazunda' as that technique is known. I have a good relationship with the agent too as we've rented through them for a couple of years and they are the best in town, family owned, independent and don't charge horrendous fees. In addition my GF works for local solicitors and they are handling the conveyancing so I have more to lose than just a few quid. 

If someone tried to gazunda me I'd block them from buying purely out of spite. 

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2 minutes ago, adarmo said:

You're describing hypothetics. The seller is selling and they are in charge. If they don't get a high offer, they are still in charge and have a choice of whether or not to lower asking price, take lower offer, wait it out or withdraw from the market. What control does the buyer have? Whether or not to offer? That's it, no power of acceptance. 

With housing in particular it is a one to many relationship. There is one property like that, owned by one vendor and many potential purchasers. 

Of course it's hypothetical. I'm not arguing that the buyer has control, but I don't think the seller has total control either. If they can't sell for the price they want then they reduce or wait based on factors that are beyond their control. If they withdraw then they are no longer a seller as a result of market.

Good luck with the purchase.

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The seller has control until the property is offer accepted and the property is off the market.

Then the buyer has control as he can choose whether to complete on the property over the typical 12 week period. 

If youre a buyer, think of a survey, your solicitors fees and the searches as an 'option' to buy the property. Vicely same if your a seller.

Obviously if the price of housing is soaring, your quids in, if its crashing it might be better to let the option expire worthless, or drop your offer at exchange....

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I don't see why you have to say that either a seller or a buyer is "in control." There are two parties to the transaction and neither is in control.

The vendor controls whether they sell or not but clearly they do not control the price they sell at. That is dictated by what the market (i.e. the highest bidder) is prepared to pay. They cannot just make up a number and dictate that a sale will happen at that number.

A buyer has one property and many potential purchasers for it but equally there are many other properties that the purchasers could go to. Of course, if the property in question is particularly unique/ special, this will increase the price that the highest bidder will pay for it but, even then, the vendor still cannot just dictate what number it will sell at. There are plenty of amazing/ special properties which have sat on Rightmove for over a year because the asking price is too high.

 

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1 hour ago, Lavalas said:

Of course it's hypothetical. I'm not arguing that the buyer has control, but I don't think the seller has total control either. If they can't sell for the price they want then they reduce or wait based on factors that are beyond their control. If they withdraw then they are no longer a seller as a result of market.

Good luck with the purchase.

The repossesion I got for £122k with an original asking price of £225k felt like I was in control. 

The owner definitely wasn't in control, they had no choice and the bank didn't give a flying f&ck. The demonstrated best price by throwing a house in Yorkshire into a London auction....with no viewings and about 2 weeks notice. 

As mentioned before....it depends on the market and the sellers/buyers circumstances who has 'most' control.

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16 hours ago, adarmo said:

The seller is selling and they are in charge. If they don't get a high offer, they are still in charge and have a choice of whether or not to lower asking price, take lower offer, wait it out or withdraw from the market. What control does the buyer have? Whether or not to offer? That's it, no power of acceptance. 

With housing in particular it is a one to many relationship. There is one property like that, owned by one vendor and many potential purchasers. 

I think this has always been true whilst you have been in the market so understandably you believe it to always be the case . I'm rather older than you and have bought and sold houses under VERY different market conditions. I can assure you that when I bought my first flat in 1994 buyers were very much in charge. Your rather one sided analysis conveniently ignores the fact that the seller can only sell the house they own, whereas the buyer has the whole market to offer on. In the mid 90s this came to the fore and as a buyer one had a wide choice of available properties, extremely helpful EAs and multiple motivated sellers who hadn't had more than the odd viewing after months on the market, let alone an offer.  I sold into the same market a few years later and the buyer had more options in both cases.

 

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2 hours ago, InlikeFlynn said:

I think this has always been true whilst you have been in the market so understandably you believe it to always be the case . I'm rather older than you and have bought and sold houses under VERY different market conditions. I can assure you that when I bought my first flat in 1994 buyers were very much in charge. Your rather one sided analysis conveniently ignores the fact that the seller can only sell the house they own, whereas the buyer has the whole market to offer on. In the mid 90s this came to the fore and as a buyer one had a wide choice of available properties, extremely helpful EAs and multiple motivated sellers who hadn't had more than the odd viewing after months on the market, let alone an offer.  I sold into the same market a few years later and the buyer had more options in both cases.

 

What was the buyer in charge of? They are price takers, as are the owners. The market sets the price (if we are to believe markets are efficient) not either party. 

Further, the buyer could offer on the whole market but that would be an awful lot of work and they'd need a huge amount of money. By the time you've narrowed it down to a meaningful shortlist there will be only a handful of properties that are of suitable size, location, accommodation and price. Then you make a decision of which to go for. It is rare (not unheard of) for people to have multiple offers out there.

Ultimately, if you have something someone else wants you're in control. You might, as a buyer in a tough market, be able to negotiate a bit more off the asking price but that is not being in controlling the sale is it? Who is paying the agent? Who does the agent act for?

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20 hours ago, Lavalas said:

Of course it's hypothetical. I'm not arguing that the buyer has control, but I don't think the seller has total control either. If they can't sell for the price they want then they reduce or wait based on factors that are beyond their control. If they withdraw then they are no longer a seller as a result of market.

Good luck with the purchase.

Thanks for your good wishes Lavalas. We had an offer accepted this morning :) 

I'll try and avoid too much input on here until I complete in case I get talked out of it!

I've been saying a correction is due for so long now that even if/when I'm right my adversaries will be able to use the 'broken watch' comeback. 

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41 minutes ago, adarmo said:

Further, the buyer could offer on the whole market but that would be an awful lot of work and they'd need a huge amount of money. By the time you've narrowed it down to a meaningful shortlist there will be only a handful of properties that are of suitable size, location, accommodation and price. Then you make a decision of which to go for. It is rare (not unheard of) for people to have multiple offers out there.

 

When I finally go to purchase a property, I intend to make multiple offers (assuming there will be multiple suitable properties that meet my criteria, which is likely) from properties with the same agent on the basis that the first party that I can reach an agreement with gets my cash.  It should incentivise some sellers.

It will also send a message that I'm not hung up on a particular property.

 

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20 hours ago, adarmo said:

If someone tried to gazunda me I'd block them from buying purely out of spite. 

........or out of principle......I've had this happen to me and I told them to p**** off.  It was at a late stage when I had packed everything and exchange was imminent.  I lost quite  a lot of money too but c'est la vie.  I think I've seen it all over the years and the whole house buying/selling process can bring out the worst in people..

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49 minutes ago, Sour Mash said:

 

When I finally go to purchase a property, I intend to make multiple offers (assuming there will be multiple suitable properties that meet my criteria, which is likely) from properties with the same agent on the basis that the first party that I can reach an agreement with gets my cash.  It should incentivise some sellers.

It will also send a message that I'm not hung up on a particular property.

 

Fair enough. If you're buying something fairly generic like an apartment or modern-ish property then that could work. The disadvantage the buyer is at is knowing what the seller really would take. The seller (via EA) is at a slight advantage in knowing the purchaser's price bracket.

If you're going for something that's in abundance there will be less of a premium on it, and indeed if properties are directly comparable you'd expect to pay the going rate. Looking around at sold prices on developments with many identical houses on slightly different plots shows this. The flip side of course is that when you sell it there will be many properties (likely) of the same type also on the market so as a seller you'll be competing with those other sellers. Swings and roundabouts I guess. 

Personally (and anecdotally) I have offered on only three properties in the last 6 months. All were unique non-estate settings within a short walk of the train station and town centre (one of them was ear shot of the station announcements!).

I have always played it cool (well as cool as an accountant can) explaining that I'm not in a rush and am happy to continue waiting for the right thing. It just so happens the right thing came along over the weekend and it's now STC to us :) 

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53 minutes ago, janch said:

........or out of principle......I've had this happen to me and I told them to p**** off.  It was at a late stage when I had packed everything and exchange was imminent.  I lost quite  a lot of money too but c'est la vie.  I think I've seen it all over the years and the whole house buying/selling process can bring out the worst in people..

Quite right. If there's a legitimate reason such as survey came back and the property is falling down a mine shaft, or they;'ve announced they're building a nuclear reprocessing facility at the back of the garden then fair enough, if it's simply an attempt to leverage the timeline then they'd be given one chance to increase their offer. 

Most (good) estate agents would likely blacklist someone like that too. It reflects bad on them. 

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1 hour ago, Sour Mash said:

 

When I finally go to purchase a property, I intend to make multiple offers (assuming there will be multiple suitable properties that meet my criteria, which is likely) from properties with the same agent on the basis that the first party that I can reach an agreement with gets my cash.  It should incentivise some sellers.

It will also send a message that I'm not hung up on a particular property.

 

You may find that the message you will be sending is that you're unreliable/erratic and a bit of an end.

If I was the seller and the agent told me the game being played, which they would, I would not entertain that at all.

Bottom line from my year searching for a house, the golden rule is if you like the house and the asking is roughly what you are prepared to pay then make a close offer either a bit above or below that figure.

If not then walk away, nobody likes a timewaster and you will be branded as one whether you realise it or not.

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4 hours ago, adarmo said:

Quite right. If there's a legitimate reason such as survey came back and the property is falling down a mine shaft, or they;'ve announced they're building a nuclear reprocessing facility at the back of the garden then fair enough, if it's simply an attempt to leverage the timeline then they'd be given one chance to increase their offer. 

Most (good) estate agents would likely blacklist someone like that too. It reflects bad on them. 

Absolutely agree. Apologies for my examples on this thread....but I have another. 

I was selling to an 'investor' who asked to reduce his offer from £135k to £125k last minute and he would ring back with the exact offer in a few days. The agent THEN told me he had done this in his last 2 purchases after they made some enquiries with other agents. 

I instructed my agent NOT to go back to the buyer (they work for me not him), but wait for him to ring us. I also told them to relist and we sold it the same week to a FTB'er for the price we had agreed with the first investor buyer in what was a really strong market at the time and the three months which had past since my original sale made my newly renovated house look 'relatively cheap'. 

My instruction was NOT to tell the other buyer unless asked....the former buyer did not ring or ask for any update FOR 3 WEEKS. (Ie we were expected to exchange a day before his first call and clearly he thought he was just leaving me hanging). By the time he came back the organised FTB'er was ready to exchanged. 

The first buyer (the investor) offered more and I told him to go f@ck himself (although the EA may have toned that down). The guy was an idiot, it was a really strong market and he tried it on for the sake of it. 

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8 minutes ago, Phil321 said:

The first buyer (the investor) offered more and I told him to go f@ck himself (although the EA may have toned that down). The guy was an idiot, it was a really strong market and he tried it on for the sake of it. 

Excellent. That's a double-win as well. One less house going to a BTL and one more to a FTB. Well done!

 

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On 24/05/2017 at 4:21 PM, pricesmad said:

You may find that the message you will be sending is that you're unreliable/erratic and a bit of an end.

If I was the seller and the agent told me the game being played, which they would, I would not entertain that at all.

Bottom line from my year searching for a house, the golden rule is if you like the house and the asking is roughly what you are prepared to pay then make a close offer either a bit above or below that figure.

If not then walk away, nobody likes a timewaster and you will be branded as one whether you realise it or not.

I'll most likely be paying cash (so no mortgage approval needed), I'm chain free and I'll be making an offer(s) roughly in line with the market, not something silly like 30% under - because I'll only be entering the market when it offers value.

If vendors want to disregard that because I'm open to buying any one of multiple other properties, then fine.  Plenty more fish in the sea. 

 

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24 minutes ago, Sour Mash said:

I'll most likely be paying cash (so no mortgage approval needed), I'm chain free and I'll be making an offer(s) roughly in line with the market, not something silly like 30% under - because I'll only be entering the market when it offers value.

If vendors want to disregard that because I'm open to buying any one of multiple other properties, then fine.  Plenty more fish in the sea. 

 

+1

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2 hours ago, Sour Mash said:

I'll most likely be paying cash (so no mortgage approval needed), I'm chain free and I'll be making an offer(s) roughly in line with the market, not something silly like 30% under - because I'll only be entering the market when it offers value.

If vendors want to disregard that because I'm open to buying any one of multiple other properties, then fine.  Plenty more fish in the sea. 

 

Value is key. That's why the odd property that is a diamond goes to sealed bids. The rest of the over priced shite just sits on the market

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On 5/23/2017 at 2:37 PM, Funn3r said:

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.

I did read of a vendor at the more expensive end of a chain buying the lowest price property so the chain was completed.

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  • 433 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% +
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      • Even
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      • up 5%



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