Transcript Of My Ea Email Chat

[markyh]

I thought this might be interesting. Out of curiosity I walked into a local satillite EA shop mid june to check out the situation on the estate I rent on as a STR. Got chatting to the EA who spends 90% of the day alone in their looking bored. I stated my position and he gave me a few nice properties with "motivated" buyers, Job relocations pretty much. Over the past few weeks he has been very helpfull and informitive as to the local market and other EA's situations etc and we have got quite chatty. He even made me a cuppa on my last visit for a good chinwag.

He pushed and pushed me for offers and I said all along I wouldn't buy without a big discount BMV etc but he didn't let up. When I did relent and offer -30% BMV on two of the three we whittled down to he got a bit down and shrugged, said he would like to sell them to me but the vendors had both refused -10% BMV offers as they had already dropped 5% since march!!!

He is a nice guy and no fool, in our last chat he told me he has managed to get a buyer for his 2 bed BTL in Yorkshire. Had to drop £17k off asking price but was happy to be possibly walking away with £25k profit after 3 years. He cant wait to exchange and seemed like a lucky little boy with his sale. Anyway, like a trouper he emailed about a second viewing with my wife on the last property as the vendors have had a buyer fall through (credit crunch) and he might be able to get some more price movement but not 30%. So this is my reply to him and his reply back.

Hi xxxx,

I think from our recent chat it is pointless seeing 19 XXXX way again as the sellers price expectations are miles away from any serious buyers offers in the current buyers market. £420k is insulting in this climate. We are in such a good position we are willing to sit out for two or more years unless there are any takers who will drop at least 30% below current market price, which will only price in expected forcasted drops to the end of 2009. After that I would be taking the hit for any further drops, which I also seriously expect as with 1989-1995. I dont believe we will see rises again until 2012 so am not willing to enter the market now at reductions that are only pricing in drops from 2007 peak, which is all the sellers seem to be considering.

It is up to the sellers to negotiate the discount up the chain if they want it started by us. We have 10 other £300 - £400k+ very nice houses within 5 miles of XXXXX now to offer on, all with "motivated" buyers, and the newbuilds on top. And If we want to widen the search to general 3 and 4 bed houses, with a large chunk of forced sellers we could have 50 properties to offer on, but we are in no rush to buy just anything. Plus any that are so forced will be at Auction by Christmas anyway.

Please keep as back up offers the following, assuming we are not accepted at 30% BMV elsewhere beforehand.

14 XXXXX Way £237k

30 XXXXX Road £294k

19 XXXXX Way £304k

Like i said, this is not a grab it and run offer just for now. These are guzunder free guaranteed offers I am willing to hold until December 08, as long as 2008 stays on track for a 15% average HPI fall, which it is ahead of that target with Junes VI figures.

If any of these sellers, or the sellers further up the chains turn in "highly motivated" or "Forced" sellers and are willing to see sense, please present our offers and come back to me to check if we have bought yet. Obviously if any other potential properties come up as highly motivated, especially after possible large mortgage resets or job losses between now and Xmas, drop me a line.

I don't want to waste your time mate, I know at the moment it is very tough for you to get sales and If you could smack the vendors about legally to get them to drop 20%-30% to make sales you would, but as we are both aware they are still living in 2007 and their sentiment hasn't changed enough yet. It will.

The smart man I know drops £17k and shifts his BTL now, well done on that and good luck. Drop me a email when you complete and I will buy you a beer at the chinese restaurant after work.

M

His reply today :

Mark

Thanks for the e-mail, I understand your position and empathise completely, we've been very spoiled here on XXXXXX over the last couple of years and our vendors are as you so eloquently alude to still living in those glory years!!

It's incredibly hard not only to sell properties here at present but also instruct them to market especially when I try to maintain a straight forward honest approach and tell them things they really do not want to hear, they also haven't grasped the notion that even though their property isn't worth what they think it is this also runs true for their onward purchase and they could get a deal they were not necessarily expecting on a larger property if they negotiate hard or consider renting themselves for 6 months or so.

I will keep in touch and definately take you up on your kind offer if and when I complete...Thanks!

Kindest regards

XXXXXXX

I found this refreshing TBH.

M

Edited July 18, 2008 by markyh

[Imp]

Just don't have their crispy shreaded beef with your beer. It completely messed up my insides for a day.

[TheLastSamurai]

Hi xxxx,

I think from our recent chat it is pointless seeing 19 XXXX way again as the sellers price expectations are miles away from any serious buyers offers in the current buyers market. £420k is insulting in this climate. We are in such a good position we are willing to sit out for two or more years unless there are any takers who will drop at least 30% below current market price, which will only price in expected forcasted drops to the end of 2009. After that I would be taking the hit for any further drops, which I also seriously expect as with 1989-1995. I dont believe we will see rises again until 2012 so am not willing to enter the market now at reductions that are only pricing in drops from 2007 peak, which is all the sellers seem to be considering.

It is up to the sellers to negotiate the discount up the chain if they want it started by us. We have 10 other £300 - £400k+ very nice houses within 5 miles of XXXXX now to offer on, all with "motivated" buyers, and the newbuilds on top. And If we want to widen the search to general 3 and 4 bed houses, with a large chunk of forced sellers we could have 50 properties to offer on, but we are in no rush to buy just anything. Plus any that are so forced will be at Auction by Christmas anyway.

Please keep as back up offers the following, assuming we are not accepted at 30% BMV elsewhere beforehand.

14 XXXXX Way £237k

30 XXXXX Road £294k

19 XXXXX Way £304k

Like i said, this is not a grab it and run offer just for now. These are guzunder free guaranteed offers I am willing to hold until December 08, as long as 2008 stays on track for a 15% average HPI fall, which it is ahead of that target with Junes VI figures.

If any of these sellers, or the sellers further up the chains turn in "highly motivated" or "Forced" sellers and are willing to see sense, please present our offers and come back to me to check if we have bought yet. Obviously if any other potential properties come up as highly motivated, especially after possible large mortgage resets or job losses between now and Xmas, drop me a line.

I don't want to waste your time mate, I know at the moment it is very tough for you to get sales and If you could smack the vendors about legally to get them to drop 20%-30% to make sales you would, but as we are both aware they are still living in 2007 and their sentiment hasn't changed enough yet. It will.

The smart man I know drops £17k and shifts his BTL now, well done on that and good luck. Drop me a email when you complete and I will buy you a beer at the chinese restaurant after work.

M

Your email to the EA was great MarkyH. Polite, persuasive, and showing complete confidence in your position and the market outlook.

The fact you have developed a decent relationship with what seems a reasonable agent means you will surely be in prime position when a forced sale at a reasonable price eventually does pitch up.

The best compliment I can pay is that I am saving your post so I can adopt its style come November 2008 when I will probably start to look at the market again.

Let us know when and if there starts to be more significant movement from the vendors you have described.

[markyh]

Just don't have their crispy shreaded beef with your beer. It completely messed up my insides for a day.

PMSL

[Telometer]

Now, if I were that agent, I'd be getting a client of mine to market his property at 20% over what they want, and accepting 25% off from you. You've told him exactly what percentage off his asking price you are prepared to pay.

[Nomadd]

Now, if I were that agent, I'd be getting a client of mine to market his property at 20% over what they want, and accepting 25% off from you. You've told him exactly what percentage off his asking price you are prepared to pay.

...except that we can all get actual sold prices of the Net these days. I mean, who in their right mind would believe any EA, friendly or not?

Nomadd

[AteMoose]

always agree with the buyer, nod and be friendly......

[Telometer]

...except that we can all get actual sold prices of the Net these days. I mean, who in their right mind would believe any EA, friendly or not?

Nomadd

Depends on what you're buying. Ghastly inner-city sheeple boxes are easily valued. Decent properties are not - can be like sticking a pin into a dart board.

[Lee Harvey Oswald]

These are guzunder free guaranteed offers I am willing to hold until December 08, as long as 2008 stays on track for a 15% average HPI fall, which it is ahead of that target with Junes VI figures.

M[/color]

M

I personally wouldn't leave offers open for such a length of time. What you are doing is giving the sellers a "safety net" so that, should they have no other offers, they always have yours to fall back on. There is nothing to motivate them to accept your offer, until time begins to run out (December in this case), and thus they have almost six months in which to come up with a better offer. The EA might even quote your offer as a benchmark to other prospective purchasers who are thinking of offering on the property.

However, if you were to put in an offer that is open for say 7 or 14 days, the vendor does not have the luxury of time being on his side. Thus, there is more incentive for a "motivated" vendor to accept your offer. If an offer is rejected, or expires, you can still make another offer at a later date. You might however want to make it clear to the agent/vendor that any subsequent offers might not be at the same level.

Just my thoughts, am open to hearing contrary opinions.