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House price negotiating

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Gonzague
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House price negotiating

Post by Gonzague »

As a FTB I thought I'd canvas the wisdom of FISO on this.

I have had enough of my landlord and now have a decent deposit saved for a mortgage to buy. I was wondering what % off the asking price you would recommend going in at and ultimately what is worth settling for. I think I saw that most houses get about 90% of the asking value at the mo. Would it be worth going lower and going up to 90% of the value or does it vary on each basis? I'm hoping that having no chain etc means I can haggle more off, but any tips from the wisdom of FISOers would be most helpful!

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murf
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Re: House price negotiating

Post by murf »

I think it is always worth trying to go in low.

No idea what the norm is percentage wise and it depends massively on how over-priced the house is. Always worth tapping up your estate agent for clues, he may be working for the seller but he wants a sale for his commission so it is in his interests to drop clues that will bring the 2 parties together.

I've gone in low before, been turned down flat, going in again with an extra £500 and got a deal.

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Groomyd
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Re: House price negotiating

Post by Groomyd »

If you see a place you love and just must have then go in only a little low.

If you know you'll be there for a shortish time and that there are other flats or houses similar coming onto the market in the area you want then go in low.

Ask yourself, if i lose this property will i be gutted?

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Re: House price negotiating

Post by Stick »

rite then this is my area, when i negotiate offers for my clients i generally try to get the offer accepted on the 3rd bid.

most house sales are agreed 5-7% of the asking price (higher price= more variance) so i would start off with an offer that is low enough to tempt the vendor but not too low as to insult them - as a pointer here an offer of less than 90% of asking price is likely to make the vendor and ea think u are a timewaster and make your further bids less credible (so costing more in the long run).

expect the 1st offer to be rejected
go up a little but jus below (1 or 2k) your max
goto max

this way the v feels they have got a good deal out of you and so do you. a win-win feeling helps keep sales together as well :wink:


but as groomd says, if u really like the hse and their is competition for it jus offer asking price and get it off the market, who cares about the odd 1k here and there for a hse you will be happy in

oh aand doing your mortgage with the selling agent will help you loads (shouldnt but it does to be honest)

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Re: House price negotiating

Post by Gonzague »

interesting stuff guys, especially Stick's post. Are those figures for all buyers or would FTB command any more of a discount due to lack of chain etc.

The place I have in mind is 167 but would something like 157 be accepted do you think?

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Re: House price negotiating

Post by Stick »

ftb wouldn't get any less price really, cash is cash at the end of the day.


there's no way to know really what offer will be accepted, every seller has their own price in mind. Maybe look for comparable eveidence of what other houses have sold for - look on nethouseprices.co.uk. You can use that as a reason for offering lower if there are lower prices on there

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Re: House price negotiating

Post by Gonzague »

All good info in the end Stick.

The house was 175k - reduced to 168k and got it for 160k with fixtures and fittings included, despite the vendor saying they wanted the full price at the start!

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Re: House price negotiating

Post by murf »

Gonzague wrote:All good info in the end Stick.

The house was 175k - reduced to 168k and got it for 160k with fixtures and fittings included, despite the vendor saying they wanted the full price at the start!
Sounds like a good deal :D but do you think you could have got it for 159?!!!!

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jimmy ching
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Re: House price negotiating

Post by jimmy ching »

If I buy a car, I will take somebody with me who knows about cars. If you're buying a house, you should do the same.
When I've bought a house, I've always submitted a bid with listed reasons for a reduction. All my first offers have been accepted. When selling, I have priced the house with listed reasons for it's price. All have sold for the asking price, within a week. Being realistic and honest, are extremely helpful in this game.

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Groomyd
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Re: House price negotiating

Post by Groomyd »

jimmy ching wrote: All have sold for the asking price, within a week.
Then you put it on for far too little :wink:

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Gonzague
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Re: House price negotiating

Post by Gonzague »

murf wrote:
Gonzague wrote:All good info in the end Stick.

The house was 175k - reduced to 168k and got it for 160k with fixtures and fittings included, despite the vendor saying they wanted the full price at the start!
Sounds like a good deal :D but do you think you could have got it for 159?!!!!
i'd tried 158 but reached the limit at 160!! good job too, since the next day it was house of the week in the local free rag with a 1/2 page entry :lol:

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Stick
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Re: House price negotiating

Post by Stick »

Gonzague wrote:All good info in the end Stick.

The house was 175k - reduced to 168k and got it for 160k with fixtures and fittings included, despite the vendor saying they wanted the full price at the start!
jus caught up with this, glad all went well for you

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Re: House price negotiating

Post by Nedved »

Stick wrote:
Gonzague wrote:All good info in the end Stick.

The house was 175k - reduced to 168k and got it for 160k with fixtures and fittings included, despite the vendor saying they wanted the full price at the start!
jus caught up with this, glad all went well for you
Stick you really know your stuff mate, impressed. I have a feeling we may work for the same company :idea:

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Re: House price negotiating

Post by Darbyand »

Any further thoughts on this 4 years down the line? Different economic circumstances make any difference or the 5-10% rule still holds sway?

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Re: House price negotiating

Post by Ashers »

Morning Gonzague,

Working in that industry the best advice I can give is to know your market and know the property.

If you're buying an older property, make sure you have a list of snags that need doing to the property (windows, heating, damp issues, plastering, etc) and use this information when offering a lower price. Look at other properties in the area and what they have sold for before making your offer as well.

If you're buying a new build, speak to the builder and see what you can get thrown in for free and look at what the property will be worth after being built. You normally make around 10% the day these go on the market.

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Re: House price negotiating

Post by Darbyand »

The OP is from four years ago. Bumped it as it's relevant to me now.

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Re: House price negotiating

Post by Bunners »

I think circumstances dictate actually.

Weve just offered somewhere at asking price, we know its prob a few £k over what we would usually pay but we wanted this house and there was an awful lot of interest in it.......

A lot does depend on if you are viewing it as a home to live in or an investment that you want to see max £ return for your money imo

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Re: House price negotiating

Post by Darbyand »

Some context

Second viewing today on a property we like. Been on the market since August 2013, and in that time has dropped 10K...but now states "offers in the region of" asking price. There are several identical properties in the neighbourhood which have sold for far less and whilst this one has had a few decent modifications (extension) it's also got an ancient kitchen, bathroom and boiler which will need replacing in medium term. It's also decorated in a very idiosyncratic way and whilst I'm sure it's their pride and joy, the estate agent has told us that has put a lot of people off.

My guess is they've got a figure in mind which is unrealistic hence why it's been on so long...but who knows...maybe they've not had (m)any offers and are just waiting for something half decent. Tempted to go in very low but mindful of Stick's advice it can put some vendors off.

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Re: House price negotiating

Post by Archy »

In a competitive market you'd never get 10% off but it seems no-one wants to buy this place at the price they're asking so you're not competing with anyone.

In such a situation I would start off very low. Don't let the estate agent know you're willing to go higher but if they reject the offer go in with a slightly higher one. There's nothing stopping you making multiple offers. Set the bar low to begin with and then it will feel like a result for the vendor when you cough up a few k more.

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Re: House price negotiating

Post by murf »

Are you ooop north?

Price rises and demand have spread out quite a bit from London now. Here in norf Essex everything is being snapped up almost instantly, especially family homes. Saw a For Sale sign in our road last week, looked up the price and raised my eyebrows (more than I thought my house was worth and ours is far better!). Had a Sold sign up less than a week later. Think Cambridge is now the fastest rising area so the spread is moving outwards.

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Re: House price negotiating

Post by WilBert »

My advice, for what it's worth, I'm not an expert and every circumstance requires a different approach. Don't blame me if you adopt my car salesman strategy and you loose the house :wink:

Firstly this is business, think that way. If the property's been on over a year what are the chances it will go in the next day or so? What's your relationship with the estate agent like? Have you asked them the lowest they would be willing to accept? They might not tell you but you might get hints. Tell the estate agents some porkers - i.e. you've got a second viewing on three other properties in the next few days.

If the vendors are showing you around - the second viewing is not to show them how much in love with the place you are but also to subtly point out the failings and how much you'll need to spend to get it up to scratch. Ask if you can lift carpets in places, feel a damp wall with your hand etc.

Ask for some time alone in rooms, this should involve some subtle chin scratching or shaking heads at different points, if going with your partner, work out who's going to be good cop bad cop. Have some low key "heated discussions" between you in some rooms. This gives the impression that one of you loves it more than the other so one will have to convince the other. This makes a low opening offer more understandable. Ask some questions about circumstances, why they are selling, have you refused offers before, what do you mean about when you say offers in the region of.

If the property is near a stamp duty threshold then ask if you could buy some of the fixings separately to bring your offer under 125k/250k. i.e. the house is offers around 265k you could buy 3 sets of fitted wardrobes and a cooker neither of you want for 5k as a separate deal to bring it under 250k saving you a tidy sum in stamp duty. All highly illegal of course.

That said it also depends on the vendors if they are likely to extremely offended by a low offer and will not negotiate the Estate Agent should make that clear. If you are also convinced this is your home for life you might want a totally positive experience to start things off then go with the higher offer. What's 2k over 25 years mortgage?

I take it you've checked zoopla/rightmove and the land registry for sold prices in the street/area?

Good luck.

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Re: House price negotiating

Post by Darbyand »

Yes we're in the north (Central Lancs) and whilst some properties are being snapped up - ours went for £5k more than I'd have taken(!) in 2 weeks - this one is lingering, strengthening the impression it's over-priced.

And yes, we have combed the sold prices very carefully. Doing that on Rightmove you can see the properties as they were advertised at the time of sale too which is handy.

One piece of good advice (from Jimmy Ching) I think is to put it in writing with reasons, when you think about it it's a bit weird you ring an estate agent and name a figure and they just pass it on. I'll be doing the former.

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Re: House price negotiating

Post by murf »

Darbyand wrote:One piece of good advice (from Jimmy Ching) I think is to put it in writing with reasons, when you think about it it's a bit weird you ring an estate agent and name a figure and they just pass it on. I'll be doing the former.
They do it so they are in control - and so they (think they) can keep the seller sweet and get a deal. Something in writing from you might put their backs up????????

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Re: House price negotiating

Post by WilBert »

Some interesting tidbits here, some I agree with others I don't. Backs up a lot of the advice said here.
http://www.telegraph.co.uk/property/pro ... agent.html" onclick="window.open(this.href);return false;

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Re: House price negotiating

Post by Darbyand »

murf wrote:
Darbyand wrote:One piece of good advice (from Jimmy Ching) I think is to put it in writing with reasons, when you think about it it's a bit weird you ring an estate agent and name a figure and they just pass it on. I'll be doing the former.
They do it so they are in control - and so they (think they) can keep the seller sweet and get a deal. Something in writing from you might put their backs up????????
The same agent sold ours so if they can get us to buy one of their's, double good news for them I reckon.

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Re: House price negotiating

Post by Archy »

Good point from Murf - I'm not sure a seller is going to be too happy about seeing all the flaws in their home pointed out in writing.

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Re: House price negotiating

Post by DrBunker »

WilBert wrote:Some interesting tidbits here, some I agree with others I don't. Backs up a lot of the advice said here.
http://www.telegraph.co.uk/property/pro ... agent.html" onclick="window.open(this.href);return false;
From that link and in relation to the discussion:
By all means, offer less than the asking price… but make sure you give good reasons why. Cite the damp patch in the ceiling, the avocado-coloured bathroom suite that you’ll have to replace, plus the fact the asking price is higher than the amount for which houses in the same street have been selling recently (again, the value of doing your homework). Don’t put in a low bid just because you think it’s the done thing.

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