Putting in an Offer on a house

[adrianallen99]

I live in Scotland and my wife wants to put an offer in on a house.

It has been on the market for nearly 4 months and had no offers, the price seems reasonable. My wife decided to ask the estate agent selling the house how much they expect to get for the property and they said they expect to get 20-25% over the asking price.

Based on this completely biased advice my wife now wants to put an offer in at 20% the asking price. Personally I think just offer the asking price and if they reject it, we can always offer more.
My wife can't seem to understand the logic of putting in an offer that may well get rejected and would rather pay over the odds.

If there was a few offers, it would be different as you don't know what the other offers are, so you have to put in what you are prepared to pay, but there is no other offers.

Do you play it safe and just offer an amount you know they will accept, or offer less based on the amount of interest in the property?

 

[JonnyT]

I would offer 10% less than the asking price. Of course the agent is always going to say more...

If it goes to sealed bids then maybe it would make a premium else bid low.

JonnyT

 

[chump]

Adrian,
It's quite surprising how people will often refuse to go the negotiation route. Could be they just don't like the prospect of a refusal , I don't know.
However , in the particular situation that you have outlined I would not hesitate to start low and work up if neccessary always bearing in mind what your cut off point is. Be prepared to do this repeatedly if need be.
You will help your case if you can also support your offer positively. That is, are you chain free and able to proceed immediately ? In other words are you able to bring anything else to the table that would be persuasive in making the seller accept your offer ? You really have to put yourself in the sellers shoes and imagine what would you be thinking in this same situation if the positions were reversed.
Re the agents 'guideline' . In Scotland as you probably know 'offers in excess' means this is the norm for doing business and his 'guideline' acknowledges that. However , absolutely anything is really only worth what the market will pay at a point in time. From what you say the market for the last 4 months have voted with their feet and decided the agents 'guideline' is not acceptable so set your own guideline
Good Luck

 

[fxmarkets]

well, being a former agent in a previuos life, first advice , do not disclose to the agent your financial situation. they are charged with obtaining the best "Deal" for their customer, the vendor. Slightly different in scotland with offers going over the asking price, and sometimes these are closed. F'in stupid if you ask me but....... , now you can be English about these things, I would arrange to go and have another good look, and talk to the owners, if they are around, ask them their plans, suss out timetables, any pressures. subtlely of course

they might be welcoming , tea etc, sometimes they may disclose how they feel about the valuation, how long have they lived there? sitting on how much equity? 60-100K ? less than 5K ? all may effect their willingness or need maybe to be flexable, quick sale wanted, ask them the owners directly, why they think it hasnt sold in 4 months? generally how they feel the markets looking to them. see what they say again they might have plans that need to get moving...

if it hasnt gone to a closing date, which I assume it hasnt, then you need to suss out if they actually are very intent on moving, or seeing what offers may come in etc.

initially if you sense they want to move, and feel the bid up from here price is Fair as it is, offer not too far off asking price, work need doing on the place? 10% maybe if you feel the price is fair.....

At the end of the day its worth what you are prepared to pay for it.... if its dream home for you both.

offer asking price, play it, thats totally all we have cash wise... etc.... via the agent that one.... leave it with them for a few days..... if they reject, nudge up in 2 steps, 3k odd, play it you are being skinted at this price always. the agent might want to make a sale. if the markets flat.

good hunting.

 

[Trader333]

In my view the same thinking that applies to Ebay should be used in this case and it is this:

Decide what the true market value is and then determine the maximum that you are prepared to pay for the house and offer that but consideration should be given to the fact that no-one has offered anything and ignore completely any hype put forward by estate agents. They will be on commission and so the higher the price the more they will get.


Paul

 

[fxmarkets]

Yeah agree trader 333 except, i dealt with a lot of people who do not have a clue about, prices, can we offerr, dare we offer etc etc, plus some vendors, ask money totally not right for the market based on their beliefs, fair enough.... to a point...

when working as an agent we'd get 10% of commissions typically, but they are charged at obtaining the best for the sellers, the purchasers have to play their own hand, without peeing off the agent and hopefully be friendly with the sellers so that they want to in some cases sell to mr/s jones because they are nice couple, some will even go the otherway and state im not selling to them..... more than money being considered in some situations.

scotland to its not uncommon for some properties to have a silly open price, 6/7 people all get surveys, paid for, send in sealed closed offers, and they can go for double sometimes, thats why i think its silly, 6 people may of paid out upto 1k for valuations/surveys, bung an offer in 20% over and it goe's 100% over. why they just dont have open offers, is beyond me,

and i think if the vendors are friendly, etc, then in scotland, ask the agent to see if the sellers will accept verbal offer of X, without it going to closing date, (reason, youve been mucked about and shelled out 2k already on surveys which didnt conclude, understandable because thats what can happen) upon this being accepted of course subject to survey, which you can do , then you can get the official letters going.

 

[chump]

FX,
It's even funnier when the Scottish system with all of it's bugs and warts has been cited as the reason underlying this overwhelming need to commence with sellers packs next year..seriously if there is a brain to be found in govt ..please tell me where it is so I can frame it for posterity...hell I'll even prostrate myself before it 4 times a day and form a new religion !

 

[Mayfly]

Hi Adrian,

I may be wrong about this, but I think you’ll find that an offer is legal binding in Scotland and that they’ll also expect you to put down a fairly hefty deposit – say, 10 percent or better of whatever you’re proposing to pay (which I guess could easily be in excess of several hundred thousand) – and which you’ll forfeit immediately if you renege on the deal - and so my advise is that you should get some professional advice PDQ?

In the meantime, here are a couple of useful websites that I think will be helpful to you: http://www.nethouseprices.com/ and http://www.ourproperty.co.uk/ although IMO the land registry’s own website is probably more definitive: http://www.landreg.gov.uk/propertyprice/interactive/ppr_ualbs.asp

HTH

Cheers

Mayfly

 

[timsk]

It has been on the market for nearly 4 months and had no offers, the price seems reasonable. My wife decided to ask the estate agent selling the house how much they expect to get for the property and they said they expect to get 20-25% over the asking price.

Adrian,
Reading between the lines and as an ex-agent myself, I suspect that the vendor's agent is responding to some strong buying signals from your wife. The more you want the house, the more you'll end up paying. If you're seen to back off and appear less interested, the agent will be less bullish. These signals will then be relayed to the vendors who, in turn, will worry that they are being unrealistic about the true value of the property and be more inclined to accept a lower offer. I agree with the general sentiments expressed by others: start low and see how you go; you can always raise your offer. Your wife could return to the agent and use you as a foil. "I've discussed it with my husband and he has some concerns" - which you have! Good luck.
Tim.

 

[fxmarkets]

Hi Adrian,

I may be wrong about this, but I think you’ll find that an offer is legal binding in Scotland and that they’ll also expect you to put down a fairly hefty deposit – say, 10 percent or better of whatever you’re proposing to pay (which I guess could easily be in excess of several hundred thousand) – and which you’ll forfeit immediately if you renege on the deal - and so my advise is that you should get some professional advice PDQ?

In the meantime, here are a couple of useful websites that I think will be helpful to you: http://www.nethouseprices.com/ and http://www.ourproperty.co.uk/ although IMO the land registry’s own website is probably more definitive: http://www.landreg.gov.uk/propertyprice/interactive/ppr_ualbs.asp

HTH

Cheers

Mayfly

not a verbal offer, you can do like the english, verbal offer accepted, then get the solicitor to send through the formal legal offer once your verbals been accepted./agreed to in principle.

then even that written binding offer can still be subject to surveys etc...... clauses, conditions, etc, etc.

 

[fxmarkets]

FX,
It's even funnier when the Scottish system with all of it's bugs and warts has been cited as the reason underlying this overwhelming need to commence with sellers packs next year..seriously if there is a brain to be found in govt ..please tell me where it is so I can frame it for posterity...hell I'll even prostrate myself before it 4 times a day and form a new religion !

I thought the english system was o.k. main headache was solicitors, keeping their thumbs up their A**es for too long, lol.

 

[adrianallen99]

Thanks for your comments.

Up here the estate agents try all sorts of things to try and convince people the market is still strong and that loads of people will be interested in every house. Okay a few houses get multiple bids and go to a closing date, but many are on the market for months at the moment. Ive noticed they will remove houses from their lists to make it look like there are less available than there really is. Also they put houses on the market and increase the price when there is no interest, to give the impression house prices are still going up.

People seemed to be either fooled easily or are hanging on the the hope that their house will rise another 20-30%

The reality is many people have bought land and rundown buildings that aren't worth anywhere near what they paid. There was a piece of land with a old mill on it forsale up here, the person wanted £70k for it. The reality was that planning had been declined and it was effectively worthless.

 

[dc2000]

Hi Adrian
Is it not the Norm in Scotland for the offer to go in above the stated asking price rather than in England where itis the norm to offer under that price?

One thing I would say is if your first offer is rejected and you go back with a second tell them " that you make this offer on the basis that the house is taken off the market and no further viewings are given"

 

[adrianallen99]

Hi Adrian
Is it not the Norm in Scotland for the offer to go in above the stated asking price rather than in England where itis the norm to offer under that price?

One thing I would say is if your first offer is rejected and you go back with a second tell them " that you make this offer on the basis that the house is taken off the market and no further viewings are given"

In scotland it tends to be 'offers over' or 'fixed price', but just because it says that, doesn't mean you can't offer below. Also if they accept an offer then they are bound by it, so they couldn't then accept an offer from someone else.

 

[timsk]

One thing I would say is if your first offer is rejected and you go back with a second tell them " that you make this offer on the basis that the house is taken off the market and no further viewings are given"

Anything is worth trying, but I'd be surprised if they agreed to this. The agents that I worked for in Devon steered the middle ground so that both vendor and applicant were happy. When an offer was received and accepted by the vendor, the agents continued to market the property and conduct viewings, making all subsequent applicants aware that they were viewing a 'sold' property. If anyone else wanted to buy the property, then the agents put them onto a reserve list and were contacted in the event that the sale fell through and invited fresh offers. Vendors were happy as they had a back up if the initial sale went pear shaped and the original applicants were happy because they no longer feared being gazumped. I haven't bought or sold a property for a few years now, but I believe this approach is commonplace in the south.
Tim.

 

[adrianallen99]

In case anyone is interested, I didn't put an offer in on this house in the end. It has now sold after being on the market for 8-9 months and it sold for it asking price.

The reason I didn't purchase it was because I found out they were selling all the land around it to build on and the house (which was a 3 bedroom cottage) was going to be surrounded by 3 new houses. Also the vendor lied about the boundaries, originally he showed me they were a decent distance away from the house, but when I got these confirmed it turned out the new houses were going to be built just 3 metres away on both sides. Also I found out that a new housing evelopment is being build over the road, which I personally felt would ruin the area and the reason I liked it in the first place.