First time buyer needing some advice!

C2008FC

hi all
went to view a house today - really interested but not sure of the course of action to be taken
is the asking price what they want?? what would be a reasonable offer eg 15% below the asking price /// is this cheeky ?

please if you recently bought / sold houses give some advice or any hidden costs or things to look out for

look forward to replies thanks /

Bobeagleburger

30% below asking price would be more like it

Alias G

Or if your in a position do to so, consider renting another year or so. You'll likely save a considerable amount.

C2008FC

thanks for that - been successful with it recently ?
€375k aksing price was going to offer circa €320 would you recommend €260k??

Wizard007

Go for it and see what happens. If the estate agent is on the ball he'll come back to you if / when there is a counter bid straight away.

The_Conductor

C2008FC wrote: »

hi all
went to view a house today - really interested but not sure of the course of action to be taken
is the asking price what they want?? what would be a reasonable offer eg 15% below the asking price /// is this cheeky ?

please if you recently bought / sold houses give some advice or any hidden costs or things to look out for

look forward to replies thanks /

Word of warning- do not assume that you will get 80% of what you're willing to pay for the property as a mortgage. The Bank will give you 80% of what they consider to be the mortage value of the property. These days this is 15-20% below the price their valuers are putting on property.

On what basis are the sellers seeking 350k for the property? (for arguments sake). Have their been similar sales in the locale recently? How did they go? Prices are continuing to fall, on an ongoing basis- you need to be very very careful......

Murtinho

Dont bid a cent over 30% below AP. Do that, it'll most likely be rejected, say thank you and put the phone down.
Wait 2 weeks before your next move.

You'll thank us later.

Senna

If you were going to buy a big plasma screen tv this week and the price is 1000e, but someone tells you that there will be a sale next week and it will be only 600e. Would you buy it this week for 1000e? Of course you wouldn't, but;
On the scale of buying a house, this is exactly what your doing, prices WILL continue to drop for the next year and more.
House prices were falling long before this current recession, and even if by some miracle we do come out of this mess next year the fall of house prices will continue until they reach a sustainable level and we're nowhere near that.

osurdivol

I put in an offer of 300K on a 400K house two weeks ago. The asking price was previously 435K. This particular development is almost completely lying idle but the builder doesn't want to face reality. I was rejected but plan on making the same offer in 3 months and every 3 months after that and I expect he'll take it eventually and be glad of it. You would be making a big mistake offering just 15% below AP in the present climate, bare minimum should be 20% but more likely 25-30%.

gollyitsolly

I am on my fourth house. Apart from price my priorities are.......
1.Location,beside transport.
2.South facing. Get A COMPASS!
3.Cul de sac. Sells quicker.
4.Big side entrance or garden. For extension or extra house.
5. NO MANAGEMENT COMPANY.

silverharp

osurdivol wrote: »

I put in an offer of 300K on a 400K house two weeks ago. The asking price was previously 435K. This particular development is almost completely lying idle but the builder doesn't want to face reality. I was rejected but plan on making the same offer in 3 months and every 3 months after that and I expect he'll take it eventually and be glad of it. You would be making a big mistake offering just 15% below AP in the present climate, bare minimum should be 20% but more likely 25-30%.

a slightly off topic point but is it not dangerous buying in a dev. that is not sold out? also it would be worth paying a premium to buy in a mature area, the last thing you want is to buy in a dev. built in the last couple of years when the whole estate could fall into negetive equity, and again end up with empty house or heavily discounted sales?

ellejay

listen to the posters here, the most valuable peice of advice i got was "if you're not embarrassed by your offer - it's too high"

So taking that advice, I liked a house that was 365 put offer in for 300, the EA laughed and told me it was a joke not an offer, mortified!!!

3/4 weeks later he phoned me back asking was offer still on table, told him it had dropped to 280.

I didn't go through with sale but very glad now as prices dropping all the time.

Personally, I'm renting and continuing to save hard, not even veiwing til sep/oct.

so bargain hard, very hard.
can't reiterate that enough.

Mugatu

While it is all well and good offering 30% below the asking price just remember if it is a 2nd hand house it is quite possible the seller can not go that low even if they wanted to. House prices have been cut quite significantly since the peak and selling 30% below would put the seller into massive negative equity and remove any reason for them to sell.

With dropping interest rates and banks willing to strike a deal with people to keep them in the house don't expect houses to just plummet as some people will tell you.

Sellers will just take the house off the market. Wouldn't you?

http://www.irishtimes.com/newspaper/property/2009/0212/1233867932643.html

In saying that, if it’s a developer then by all means go for 30%. I'm sure some of them have to sell at whatever price they would get.

Small Change

This is a sensible point. There is a big differential at the moment in terms of pricing by different sellers / EAs, some far more realistic than others.

A general guideline like "only offer a maximum of 75% of the asking price" is next to useless.
You need to assess how much you think the property is worth and compare this to the asking price before you start talking percentages

EDIT: Also, lol at the Times article....“in the middle sector of the market – between €600,000 and €1.5m!!"

bangersandmash

Mugatu wrote: »

While it is all well and good offering 30% below the asking price just remember if it is a 2nd hand house it is quite possible the seller can not go that low even if they wanted to. House prices have been cut quite significantly since the peak and selling 30% below would put the seller into massive negative equity and remove any reason for them to sell.

I've seen this line trotted out here before. The general consensus is that asking prices are at 2005 levels in most parts of Ireland. The vast majority of second hand properties in Ireland were bought long before then. Negative equity is an issue for those who bought close to the peak with high LTV.

Mugatu wrote: »

With dropping interest rates and banks willing to strike a deal with people to keep them in the house don't expect houses to just plummet as some people will tell you.

Interest rates aren't going to fall much further and they're certainly not going to stay at current rates in the medium term.

OP there's no single answer to your question. This kind of thread reminds me of "how much should I give at a wedding?" threads. The kind of offer you should make depends entirely on your own circumstances and how you believe the property is priced relative to the market - now and in the future.

ZYX

In response to the OP it is impossible for anyone here to tell you what to offer. The seller may have put an artificially high price on house with the expectation of dropping it, or, the asking price may be a low, very realistic price. Simple statements such as offer 30% less are quite frankly silly without knowing anything about the house.

gurramok

Mugatu wrote: »

While it is all well and good offering 30% below the asking price just remember if it is a 2nd hand house it is quite possible the seller can not go that low even if they wanted to. House prices have been cut quite significantly since the peak and selling 30% below would put the seller into massive negative equity and remove any reason for them to sell.

Not all sellers are in the same boat. Some sellers are not in negative equity or already own their house outright and couldn't care at what price they sell hence prices will still keep dropping.

It all depends on the seller and what situation they are in. Each seller is in a different unique position.

ellejay

Mugatu wrote: »

While it is all well and good offering 30% below the asking price just remember if it is a 2nd hand house it is quite possible the seller can not go that low even if they wanted to. House prices have been cut quite significantly since the peak and selling 30% below would put the seller into massive negative equity and remove any reason for them to sell.

With dropping interest rates and banks willing to strike a deal with people to keep them in the house don't expect houses to just plummet as some people will tell you.

Sellers will just take the house off the market. Wouldn't you?

http://www.irishtimes.com/newspaper/property/2009/0212/1233867932643.html

In saying that, if it’s a developer then by all means go for 30%. I'm sure some of them have to sell at whatever price they would get.

I'm not so sure I agree there with you, from my experience and area's I'm looking in, about 90% of the houses are secondhand.

If the houses aren't selling, they're being put up for rent, also at inflated prices, they're not being rented out either as people are staying put.

So the vendour is left with an empty house. So where are they living?
In my experience, the vendours have already bought a bigger shinier house on the backbone of the smaller house they're trying to sell.

Because they're mortgaged up to the hilt, they're reluctant to sell at the current/lower price. Vendours can only sustain this for a limited time.
Ok - the banks are giving a little slack, but to owner occupiers.
Vendours will have to sell and drop their prices accordingly.

Factor into that, banks aren't lending mortgages/loans/credit as easily, therefore smaller number of peolpe have funds to buy.

Factor into that also, people are worried about their jobs and are reluctant to buy houses, even they have credit/mortgage approval.

So in my humble opinion it's a smaller market the vendours are selling to, so they'll just have to lower their prices if they want to sell.

If the vendour is in a position to sustain high level mortgage, he's not going to deal anyway, so wait til something in same area crops up.

Mugatu

gurramok wrote: »

Not all sellers are in the same boat. Some sellers are not in negative equity or already own their house outright and couldn't care at what price they sell hence prices will still keep dropping.

It all depends on the seller and what situation they are in. Each seller is in a different unique position.

I totally agree. There are plenty of people out there that have equity in their homes, but at the same time there are plenty that don't. Saying the rule of thumb is 30% below just doesn't make sense.

mathie

ellejay wrote: »

So the vendour is left with an empty house. So where are they living?
In my experience, the vendours have already bought a bigger shinier house on the backbone of the smaller house they're trying to sell.

Because they're mortgaged up to the hilt, they're reluctant to sell at the current/lower price. Vendours can only sustain this for a limited time.
Ok - the banks are giving a little slack, but to owner occupiers.
Vendours will have to sell and drop their prices accordingly.

I find it hard to believe that a lot of people have bought a new place recently on the back of the epxected sale of their old house.

Would banks approve such a loan?

ellejay

I find it hard to believe that a lot of people have bought a new place recently on the back of the epxected sale of their old house.

Would banks approve such a loan?



Not now they wouldn't, but banks were most cerainly approving second mortgages on the apparant equity of the home.

Sesshoumaru

Mugatu wrote: »

I totally agree. There are plenty of people out there that have equity in their homes, but at the same time there are plenty that don't. Saying the rule of thumb is 30% below just doesn't make sense.

You don't know till you try and later you can't haggle the price down from an initial higher offer.

ntlbell

gurramok wrote: »

Not all sellers are in the same boat. Some sellers are not in negative equity or already own their house outright and couldn't care at what price they sell hence prices will still keep dropping.

It all depends on the seller and what situation they are in. Each seller is in a different unique position.

+1

You should try and find out as much as you can about the sellers.

it's not as hard as you might think, call into neighbors of theirs ask them some questions about the neighborhood tell them your thinking of buying around the area, compliment their lovely garden and watch them sing....

You'll be surprised what information you can find out about the seller

people love to talk

ntlbell

Mugatu wrote: »

I totally agree. There are plenty of people out there that have equity in their homes, but at the same time there are plenty that don't. Saying the rule of thumb is 30% below just doesn't make sense.

it doesn't really matter their problems are not your problems.

but knowing what problems they might have or don't have will help in which line of attack you choose

The_Conductor

Sesshoumaru wrote: »

You don't know till you try and later you can't haggle the price down from an initial higher offer.

Sure you can- its known as 'gazundering' (as opposed to gazumping). Its not moral or ethical to go back on your word- but its your money at the end of the day.

Duckjob

As other posters pointed out nobody can really say x% below asking is reasonable without knowing how reasonable the asking price was in the first place. Some sellers are more realistic in their expectations than others.

So much depends on the property itself and its history. If you post up a link to daft.ie for it you might get more valuable suggestions.

Assuming you have not already done so, if it is on daft.ie, install PropertyBee (on Firefox) and you can see its full history:
- When it went on sale on daft.ie
- how long it has been up
- how much if any the asking price has moved already.

If a property has been on sale 12 mths and the asking has not dropped then the seller is the one being cheeky in clinging to a price that is clearly out of step with the realities of the market.

bobbiw

C2008FC wrote: »

hi all
went to view a house today - really interested but not sure of the course of action to be taken
is the asking price what they want?? what would be a reasonable offer eg 15% below the asking price /// is this cheeky ?

please if you recently bought / sold houses give some advice or any hidden costs or things to look out for

look forward to replies thanks /

Prices are going to fall for the next few years, if you buy today you need to know that your home will devalue by another huge amount. It will take 10 years before prices are at todays level.

The_Conductor

bobbiw wrote: »

Prices are going to fall for the next few years, if you buy today you need to know that your home will devalue by another huge amount. It will take 10 years before prices are at todays level.

Historically- property cycles are actually between 15 and 22 years in length (with a few very notable exceptions- such as the Japanese market- where residential property is now at levels seen in the 60's and commercial in the early 70s).