How much can you realistically Squeeze out of a Seller

ambro25

SkepticOne wrote: »

That is easy. Capital appreciation. What matter that yields were low when your property was going up by 10 to 15% a year.

Calina & Gurgle are right (yes, what I meant in my post was that I couldn't understand people were still BTL in late 2004 )

SkepticOne, I'm sure we understand one another on this, but personally I'd never go for the "2 in the bush" and, at any rate,
_ certainly not when €000,000 are on the line
_ maybe (and only) with €s I already have and can afford to lose


Re. the "people at the front", they're probably the only ones who can afford to reduce rent in line with market progression and still make €s.
That is, until FF & Co. (if they're still in charge by then and haven't had their heads cut off ) look over the parapet and expectedly come up with yet another new tax micro-regime to grab some of it (just like the FR gvt did in the early 00s )

SkepticOne

ambro25 wrote: »

SkepticOne, I'm sure we understand one another on this, but personally I'd never go for the "2 in the bush" and, at any rate,
_ certainly not when €000,000 are on the line
_ maybe (and only) with €s I already have and can afford to lose

I'm looking at it from the point of view of someone caught up in the bubble mentality.

SparkyLarks

To the OP,
1) don't get distracted by the prophets, no-one knows what will happen next. Warren Buffet repeatedly says buy when everyone else is selling and sell when everyone else is buying.

So the important questions are,
1) do you want this house
2) can you see yourself living there for 5 10 25 years?( a more important question now)
3) how much are you willing to pay?
4) How much can you afford to pay, not how much will the bank give you but how much can you pay and afford the lifestyle that you want.

AS a recent Seller, I bought my house in 2006 and sold recently to emigrate, work reasons. I had my house on the market at 325,000 I eventually got an offer for 315 and sold at that, I lost some on my house.

I heard while closng the deal of a house down the road form me, same house practicallt both 3 bed's in cul de sac's in the same estate went for 295,000 so following the logic of some posters here the purchasor should have withdrawn his offer and put in for 295,000 or less.

However I couldn;t afford to take that sort of hit as I would have needed to come up with cash to pay the bank the negative equity. So If it happened I was going to take the house off the market and rent it. I had doen my sums and it was the much better choice.

I later found out the couple selling the other house had bought it in 99 and were still making a tidy profit on the house so they could take the hit.

That said you probably did go in a little high. but over the life of a morgadge it;s not too bad.

If you are prepared to let the house go, I'd stick to your guns for a while. If they are sticking to their guns then maybe you can do a deal over the furnishings, as that is a big cost for a new home owner.

I suppose my advice is work out what is the best for you and go for it, but don;t assume every seller is the same some will drop their prices some won't. Maybe the couple here will rent the house out instead of getting 240.000 for the house

anyway best of luck

SkepticOne

SparkyLarks wrote: »

I heard while closng the deal of a house own the road form me, same house practicallt both 3 bed's in cul de sac's in the same estate went for 295,000 so following the logic of some posters here the purchasor should have withdrawn his offer and put in for 295,000 or less.

However I couldn;t afford to take that sort of hit as I would have needed to come up with cash to pay the bank the negative equity. So If it happened I was going to take the house off the market and rent it. I had doen my sums and it was the much better choice.

I later found out the couple selling the other house had bought it in 99 and were still making a tidy profit on the house so they could take the hit.

This is why the OP should have 5 or 6 similar houses in mind rather than just one. Allow those in negative equity to drop out of the bidding.

JOJOC

Hi Sparkylarks

Thats some good advice you are giving there - i am currently in the same situation as the OP, i have seen a house and would love it, the location is perfect and i could see myself living there forever.

Only thing is its on the market for 440,000 and i cant really afford that but i dont know what to bid first ie 10% less or can you give me some ideas ?

Thanks

SparkyLarks

JOJOC wrote: »

Hi Sparkylarks

Thats some good advice you are giving there - i am currently in the same situation as the OP, i have seen a house and would love it, the location is perfect and i could see myself living there forever.

Only thing is its on the market for 440,000 and i cant really afford that but i dont know what to bid first ie 10% less or can you give me some ideas ?

Thanks

Impossible to know but here are a few things to consider.
and as another poster said, you need to have 5 or 6 houses that your intrested in.

90% of the asking is the most I'd offer. If you bid 380,000 and increase to 400,000 the seller won;t be thinking oh he's come up he'ss come up to 440,000. they;ll be thinking graet got an extra 20,00 out of him marvellous

1) what are houses in the area going for? If they are going for less the seller will know this. Could be worth going to another auctioneer selling another house and finding out what will they accept. you might be able to use that to bargin.

2) how long has the house been on the market? If it;s be ther for more than a year the people will be keen to sell

3) Has the price been reduced. Take the last posted price and factor in how much house prices have gone down since then.

4) When did the sellers buy, why are they selling, an elderly couple trading down may take more of a hit for a quick sale thatn a young couple who need the space. Allso as I mentioned earlier it is more critical as to the equity they have in the house, very few will sell if it means they have to come up with a lump sum for the bank.

5) is it occupied, if not it is costing the seller to keep it. so a quick sale is valuable. If I had sold my house a year earlier I'd have saved about 10,000 in mortgage.

But the most important thing is don't buy what you can't afford, don't even entertain it. house prices will at some point in the future stabalise and increase but no-one knows when. buying what people cant afford is largly why the world economy is in trouble.


Once you calculate what you can afford, and are happy to pay,say 420,000, I'd double the difference and that i.e. 400,000 that way you have some wiggle room to come up. though if you decide that you can only afford 380,000 I might not bit 320,000. I'd go and say, look really like the house and
but I can only come up to 3800000. Take it or leave it and walk away.

Surely there is another few houses that you can find that you can afford.

If you want a more expensive house then you can afford then you need to tighten the belt save for a year and see what you can afford then. Prices are unlikely to shoot up in the next year, so now is a good time to do the wait and see. If you rent a similar house save the difference between rent and the mortadge and go again in a year

SparkyLarks

JOJOC wrote: »

Hi Sparkylarks

Thats some good advice you are giving there - i am currently in the same situation as the OP, i have seen a house and would love it, the location is perfect and i could see myself living there forever.

Only thing is its on the market for 440,000 and i cant really afford that but i dont know what to bid first ie 10% less or can you give me some ideas ?

Thanks

Impossible to know and not sure If you should listen to my advice but here are a few things to consider.
and as another poster said, you need to have 5 or 6 houses that your intrested in.

90% of the asking is the most I'd offer. If you bid 380,000 and increase to 400,000 the seller won;t be thinking oh he's come up he'ss come up to 440,000. they;ll be thinking graet got an extra 20,00 out of him marvellous

1) what are houses in the area going for? If they are going for less the seller will know this. Could be worth going to another auctioneer selling another house and finding out what will they accept. you might be able to use that to bargin.

2) how long has the house been on the market? If it;s be ther for more than a year the people will be keen to sell

3) Has the price been reduced. Take the last posted price and factor in how much house prices have gone down since then.

4) When did the sellers buy, why are they selling, an elderly couple trading down may take more of a hit for a quick sale thatn a young couple who need the space. Allso as I mentioned earlier it is more critical as to the equity they have in the house, very few will sell if it means they have to come up with a lump sum for the bank.

5) is it occupied, if not it is costing the seller to keep it. so a quick sale is valuable. If I had sold my house a year earlier I'd have saved about 10,000 in mortgage.

But the most important thing is don't buy what you can't afford, don't even entertain it. house prices will at some point in the future stabalise and increase but no-one knows when. buying what people cant afford is largly why the world economy is in trouble.


Once you calculate what you can afford, and are happy to pay,say 420,000, I'd double the difference and that i.e. 400,000 that way you have some wiggle room to come up. though if you decide that you can only afford 380,000 I might not bit 320,000. I'd go and say, look really like the house and
but I can only come up to 3800000. Take it or leave it and walk away.

Surely there is another few houses that you can find that you can afford.

If you want a more expensive house then you can afford then you need to tighten the belt save for a year and see what you can afford then. Prices are unlikely to shoot up in the next year, so now is a good time to do the wait and see. If you rent a similar house save the difference between rent and the mortadge and go again in a year

p.s. you nevber know what will happen. I bought a house that I said I can live here for ever, only to end up selling it to move to america.

Good luck anyway

monkeytronics

Agreed a price of 242k!

The_Conductor

Congratulations Monkeytronic- hope you're happy with your new home.

monkeytronics

smccarrick wrote: »

Congratulations Monkeytronic- hope you're happy with your new home.

Thanks,

Yeah I am very happy. looked at bout 10 altogether and this one just felt like the one.

Booking deposit paid and vendor is looking for a quick sale.

As a matter of interest, how long does it take between this stage and actually getting the keys to move in?

adam.number2

Congrats Monkey. Glad you did not succumb to the 'bid 20% less than asking' lunacy. You'd still be wandering around looking at houses in three years time. ..You might even be posting on internet forums telling people how smart you are that you had looked at lots of places...

As for the closing time, it really depends, but if both you and the seller want it to happen quickly you could move in within a month. Be sure to get your house insurance/life insurance sorted. Bank wont let you draw down without them in place and it can take a little while to get all the forms etc filled out and processed.

Good luck with your new home.

The_Conductor

monkeytronics wrote: »

As a matter of interest, how long does it take between this stage and actually getting the keys to move in?

It really depends on what sort of order the paperwork is in, the two solicitors liaising with one another and bank details. In general it might take a minimum of 6-8 weeks, but if anything at all is out of the ordinary it can be prolonged beyond this. I would guess you'll be fully moved in within 2 months.

jetski

adam, are you selling a house by any chance?

adam.number2

jetski wrote: »

adam, are you selling a house by any chance?

No. Neither am I a buyer, or for your next question, a vested interest.

But I hate to see the same misguided erroneous advice been dished out by people who pretend they know, but in reality haven't a clue.

BTW, vested interests aren't just banks, estate agents and solicitors. Vested interests also include people who are considering buying in the next few years.

SimpleSam06

adam.number2 wrote: »

BTW, vested interests aren't just banks, estate agents and solicitors. Vested interests also include people who are considering buying in the next few years.

Eh VIs are traditionally referred to around here as those groups who want to keep prices high and climbing. People considering buying in the next few years have vested interests, but are not vested interests, so to speak.

astrofool

If you're shorting stocks, then you have a vested interest in that stock, same with people who want to buy cheap housing.

I'd agree however that VI has usually referred to those who have been pushing the prices up when mentioned in print, but thats just semantics, a VI is a VI And don't think those on the other side won't be as ruthless in how they push their interest (nor should they be, Estate Agents, and others that bought into the hype don't deserve sympathy). But the drop is going to affect a lot of "innocent" bystanders negatively, just as it did on the way up.

johnnyskeleton

adam.number2 wrote: »

But I hate to see the same misguided erroneous advice been dished out by people who pretend they know, but in reality haven't a clue.

To be fair, absolutely nobody knows how the property market is going to go. Some people say up, some say down, some say it will stay the same. There is nothing misguided or erroneous for someone to say "I think that prices will drop because X, Y and Z" or "I think that prices will rise because A, B and C".

I think it's beyond dispute that the property market is slow at the moment, and there are more properties for sale than people who are prepared to buy them at current prices. So suggesting that someone put in an offer under the asking price would appear to be reasonably sound advice based on how the market is at the moment.

In fact, the OP did ask for less than the asking price, and although he then increased his offer, he still purchased the house below the asking price. So asking for a reduction on the asking price worked well for him.

BTW, people who are considering buying the next few years have a vested interest in property prices stabilising at some stage.

adam.number2

johnnyskeleton wrote: »

To be fair, absolutely nobody knows how the property market is going to go. Some people say up, some say down, some say it will stay the same. There is nothing misguided or erroneous for someone to say "I think that prices will drop because X, Y and Z" or "I think that prices will rise because A, B and C".

Ah but that wasn't what was being said. The advice that was given was 'offer +20% less than the asking', not that the market would drop x, y or z. We can say that it was wrong, because we can see an outcome. The OP, now has a home. Have any of the advisors secured a purchase (themselves, not a 'friend') with their 20% off the top advice? Or have they just viewed lots of houses...

SkepticOne

If the goal is to secure this particular at whatever cost then going 20% below the asking price may not be the correct approach in certain circumstances. What if the seller bought at the top of the market with a 100% mortgage and literally can't sell at anything substantial below the asking price? The OP by agreeing to only a very minor reduction has succeeded where perhaps a more hard ball approach would have failed. In this respect I think adam.number2 is correct.

The_Conductor

adam.number2 wrote:

Have any of the advisors secured a purchase (themselves, not a 'friend') with their 20% off the top advice? Or have they just viewed lots of houses...

If you're referring to me- I have been offered two different properties at 24% and 32% below their stickered prices. While I would be happy with either- there is another property which has been vacant for almost a year, that I am trying to get instead (bigger garden, better location). (Note: of all the properties I viewed- I would hazard a guess that over 30-40% of it is currently vacant, and half of that for over 6 months). The main thing stopping me from signing on the dotted line is my job- I'm one of those pesky civil servants who are being decentralised, and my department are refusing to give me an exact date. I've very little interest in a daily 5 hour commute- so I'm going to stay put until the other factors iron themselves out. As a cash buyer however- 2 estate agents and 1 developer did advise me that their clients would willingly give me a much bigger discount (one staff member for one of the estate agents also let it slip that they haven't sold anything at all in over 3 weeks). There are no FTBs looking at the sort of properties I'd be going for (and nor am I financing them with my day job.......), so its possible that the sort of discounts being offered on secondhand properties may not have filtered down to the new market just yet- but they are falling nonetheless.

SimpleSam06

adam.number2 wrote: »

The advice that was given was 'offer +20% less than the asking', not that the market would drop x, y or z. We can say that it was wrong, because we can see an outcome.

Your line of thinking is erroneous here. We can't see that it was wrong because it wasn't tried. If it had been tried and failed, then we could say definitively that it was wrong. As it is, the buyers accepted a higher offer, this is no surprise.

It proves nothing.

monkeytronics

smccarrick wrote: »

If you're referring to me- I have been offered two different properties at 24% and 32% below their stickered prices. While I would be happy with either- there is another property which has been vacant for almost a year, that I am trying to get instead (bigger garden, better location). (Note: of all the properties I viewed- I would hazard a guess that over 30-40% of it is currently vacant, and half of that for over 6 months). The main thing stopping me from signing on the dotted line is my job- I'm one of those pesky civil servants who are being decentralised, and my department are refusing to give me an exact date. I've very little interest in a daily 5 hour commute- so I'm going to stay put until the other factors iron themselves out. As a cash buyer however- 2 estate agents and 1 developer did advise me that their clients would willingly give me a much bigger discount (one staff member for one of the estate agents also let it slip that they haven't sold anything at all in over 3 weeks). There are no FTBs looking at the sort of properties I'd be going for (and nor am I financing them with my day job.......), so its possible that the sort of discounts being offered on secondhand properties may not have filtered down to the new market just yet- but they are falling nonetheless.

Hey thats interesting. I'm a civil servant in Dublin in a decentralising department. (due to move to wexford in February) - Born and bred in Dublin but have decided to move with the Dept. I'm 24, change of scenery someting diffrent would be nice.... Kinda scary too though. Helped by the fact that my GF is in the Dept and from Wexford - tho we've only been together 5 months!

I figured why wait till I know exactly when I am moving - hate waiting for 3rd parties to decide my life so went looking at properties found one I like and now sale agreed. Sure its all good. I'll have somewhere to spend weekends until I move full time I suppose

The_Conductor

Its the not knowing thats the problem- it could be in 6 weeks time (quite possible) or in 6 years time (when the complete the building they ultimately hope to use- possible, but improbable). As they have already cleared half of the building we're in, in Kildare Street, its likely to be sooner rather than later- but with a new Minister god only knows whats going to happen.......

horsechesnut

Congrats Monkey!
I'm in the house buying boat at the moment and I'm wondering if there are any kindly "sellers" out there who can share with me how much they accepted Vs the asking price (particularlly in Dublin hinterland/Meath)
(Don't trust EA as far as I can throw them - recently had one twice show me round what I gather now was an already a sale agreed house!! What time wasters!)

Anyway - just looking for some advice on how much below the asking price people have actually accepted recently.
Thanks:o

monkeytronics

Hey was just wondering what you would expect to pay for a survey of the house and a valuation.

I have emailed a few companies, one has come back to me with €620 seems excessive (maybe not).

Thanks

Monkeytronics

sadie9

Structural survey with an engineering firm should be around the 400 euro mark excl VAT. I know it's fierce expensive. I'm in the Midlands and couldn't find anything cheaper. Just keep phoning around I suppose. A valuation for the mortgage lender will cost around 130 euro (think it's a set price?). They usually supply you with a list of people valuers (auctioneers) in your area who do valuations.

CALI

Like Horsechesnut I would love to know how much houses are actually selling for. How much below the asking price?

The_Conductor

CALI wrote: »

Like Horsechesnut I would love to know how much houses are actually selling for. How much below the asking price?

Its a picture of two halves. New properties have in the main been reduced by ~ 20% or so (sometimes more), and in most cases now feature greatly enhanced add-ons (including cars in several estates). Where the reductions are seen as having introduced value into the market, relative to FTBs reduced borrowing capacity, things are selling, albeit slowly.

The second hand market on the other hand is a totally different kettle of fish. Most sellers are not willing to countenance that the value of their property is so much less than it was 18-24 months ago. Asking prices are falling- most notably on high end properties (E.g. new properties at Carlton Estate in Maynooth which were quoted at 1.3m a year ago are now 900k (and are selling at 900k).

Lower down the secondhand market properties which were 700k a year ago and have been reduced to 630k are now being offered by estate agents at 570k (and still not selling). Sellers seem to think that its entirely reasonable to expect this sort of money for bathrooms in very average condition- and kitchens that will probably have to be torn out, in a poor state of decor. One estate agent I was talking to admitted he was embarrassed by the state that several "high-end" properties are in. One seller I was talking to said that all the additions which were sold to them as "adding value" to their property (a hideous sun room, decking and cobbling) they have been informed most people who are interested in their property intend to tear up.......

The US houseprice index was released on Tuesday- it showed a national decrease in prices over there of 14.8% in the year to end March 08. While interest rates may be a bit higher over here- we have roughly identical affordability issues- combined with an inflation rate double theirs and severe affordable issues on most daily goods (particularly groceries and fuel).

If you look at the peak of the market- now considered to have been August/Sept '06- real house prices have fallen in the region of 20-25% here. If you check daftwatch and some of the other monitoring sites- you will see many individual examples of properties now well over 20% lower amvs than when they first entered the market- and a shocking amount of property on the market for well over 12 months. Estate Agents are employing tricks to try to hide the lengths of time properties have been on the market- and in many cases vacant (the vacancy issue appears to be getting more pronounced particularly in many midland towns- the first thing you notice when viewing a property being how icy cold it is in there- the usual excuse being- well it has been vacant for 10/12/14 months (whatever)).

If a seller is intelligent about selling and prices accordingly- his/her amv will be considerably below other property in the area, and he/she will obviously not be in a position to negotiate in the same manner as other sellers. But then again- he/she will probably dispose of their property quickly.

So- in short- it all depends...... Is it old, is it new? How long has it been on the market? How desireable is it? How is it priced relative to properties its going against in the market place? Is the area its in, considered to be in trouble (look at Portlaoise with an 88% increase in unemployment claims in the past 12 months for example). You need to look at the bigger picture than simply pull a figure out of the sky and say that you are offering 20% lower than the amv- in some cases you'd be laughed out of the office, in other cases they'd snap your hand off you...........