Negotiating purchase price for house

ParkRunner

Hi,

I have noticed a lot of 3 bed houses have become more affordable recently and am interested in purchasing one. One house in particular was advertised for €250k. The house in question does need a bit of work but the location is reasonably good which caught my interest. I rang the estate agent after viewing the property and he said an offer had come in for €210k but I dont believe him and I said I wouldnt be in a position to offer more than €200k for it. The house is still advertised for sale and I am thinking of ringing the agent in the near future and putting in a formal offer of €200k.

Just wondering if anyone has had any experience of this, being told an offer has come in and you then offer a lower price? With the property market as it is, I wouldnt be too disheartened if this one passed me by with interest rates dropping and prices too (although mortgages are becoming harder to get) but it would be useful to have a bit of experience at negotiating the price.

gally74

is the house occupied?

if so, id drop buy and ask the vendor directly

ParkRunner

It's an executor sale, so i presume the previous occupier is deceased.

zeus faber

If he had an offer at 210K why didnt he take it? We are heading into a difficult year for the banks so if you hold your powder a few months at least and see what the lie of the land is. I would just let the agent know you are interested and touch base every now and again to let your interest be known,but be in no rush

MysticalSoul

Get a friend to ring up about the same property wondering if an offer has been put in, and if so, what it is.

jdivision

standard practice for them to say it these days. somebody said recently that your first bid should be one you're embarressed by because it's so low. That's the right tactic these days

Senna

I'd be weary of buying houses that need work done to them, i've know of a cases were the banks valuation has come in considerable lower than the purchase price, seen the house needs some work done. The fella purchasing it thought he was getting a huge discount (advert at €210k purchases for €155k) but the bank would only give 92% of 155k, leaving him with a nearly 50k shortfall.

gally74

1 you need to be quite serious with the estate agent,
2, get him out there and watch the body langange,
3, when you put an offer on, put a time limit on it, i.e. the offer will stand for 48 hrs. or till clode of buisness on friday etc.

p

ParkRunner

Thanks for the tips, I drove past the property again today and the for sale sign has been taken down although it is still advertised on daft. I will probably ring him this week or get a friend to ring and find out what the situation is. Just out of interest, at what stage do the banks value a property? I presume it would be after an architects report has been obtained?

Cantab.

Offer €200k and €5k less per week thereafter.

Also drop a letter in to the house explaining that you've left a bid of €200k with the EA and that you're looking forward to hearing from them.

Also, buy a book on negotiation skills. Might cost you a tenner, but you could save yourself 10 grand.

Colonel Sanders

EF wrote: »

I have noticed a lot of 3 bed houses have become more affordable recently and am interested in purchasing one.

Play hardball. The fact that 'a lot' are now more affordable means you should not tie yourself to one property.

Also 'more affordable' does not imply good value. Work out how much your monthly mortgage payments would be, compare to the cost of renting. If there is a significant difference in favour of renting then why buy now?

ParkRunner

The cost of mortgage repayments is not too far off the cost of renting with the current purchase prices and interest rates taken into account. Since I first obtained mortgage approval also, while the amount I would be approved for has increased, the percentage of the purchase price I would get has dropped. If this continues the amount of savings will not cover a deposit unless there is a substantial drop in the actual purchase price.

Also Ive noticed that while a lot of 3-bed properties are becoming more afforable a lot also seem to be not on the market at all. It will be interesting to see if the developers will be able to afford to keep these off the market until the market recovers (if ever) as they are reducing the supply available. A lot of the empties too that people keep talking about are in the BMW region and wont ever be much demand for these

Hennybug

EF i wouldn't worry too much about getting the deposit sorted if you can get a decent amount on the mortgage. Most sellers are so delighted to get a sale at all that they're prepared to accept a nominal deposit.