Initial Offers on houses

ssbob

So beginning the search for our second home, bought an affordable home in 2007 but since then we have outgrown the house and would like to move to a bigger house outside the city. We don't plan on selling our house but are hoping to take on a second mortgage.

My question is around offers, we are interested in a house which is priced around €260k and has recently dropped from €275k to this value. If you go in too low-ball(€175k say), is there a downside to this?

zulfikarMD

ssbob wrote: »

So beginning the search for our second home, bought an affordable home in 2007 but since then we have outgrown the house and would like to move to a bigger house outside the city. We don't plan on selling our house but are hoping to take on a second mortgage.

My question is around offers, we are interested in a house which is priced around €260k and has recently dropped from €275k to this value. If you go in too low-ball(€175k say), is there a downside to this?

I guess all depends on locationof the house, current state/condition of the house, sellers/EA's willingness to negotiate. I personally dont see anything wrong with making any offer. worst they can say is NO!

Kosseegan

ssbob wrote: »

So beginning the search for our second home, bought an affordable home in 2007 but since then we have outgrown the house and would like to move to a bigger house outside the city. We don't plan on selling our house but are hoping to take on a second mortgage.

How are you going to pay the first mortgage? The chances of a bank advancing a second mortgage are slim to none at the present time.

Man007

Kosseegan wrote: »

How are you going to pay the first mortgage? The chances of a bank advancing a second mortgage are slim to none at the present time.

How can you say that without knowing anything about their financial situation the bank will give a mortage if they think they can afford it

you don't know his salary so how can you comment

Kosseegan

Man007 wrote: »

How can you say that without knowing anything about their financial situation the bank will give a mortage if they think they can afford it

you don't know his salary so how can you comment

I asked him how he was going to pay for it, so i don't know what his salary is. The banks are very reluctant to back second houses at the moment, no matter what the salary. The banks want to reduce their exposure to property so the fact that someone can afford a loan does not mean a bank will lend. The existing bank would have to consent to the house being let or become unoccupied. A range of issues arise in either situation. The o/p is wasting his time making offers until this is sorted. Given that he bought an affordable 5 years ago and the tone of the question leads me to suspect that he hasn't canvassed the issue of a second mortgage with a bank.

ssbob

Kosseegan wrote: »

How are you going to pay the first mortgage? The chances of a bank advancing a second mortgage are slim to none at the present time.

Kosseegan wrote: »

I asked him how he was going to pay for it, so i don't know what his salary is. The banks are very reluctant to back second houses at the moment, no matter what the salary. The banks want to reduce their exposure to property so the fact that someone can afford a loan does not mean a bank will lend. The existing bank would have to consent to the house being let or become unoccupied. A range of issues arise in either situation. The o/p is wasting his time making offers until this is sorted. Given that he bought an affordable 5 years ago and the tone of the question leads me to suspect that he hasn't canvassed the issue of a second mortgage with a bank.

Thanks for your comments, I have been given approval in principal for a second mortgage based on attaining no rental income from our affordable house. We(local residents association) are engaged in negotitions with the council to drop the clause in the affordable contract that forbids us from renting the house as a whole. We can however rent 1 room which is strange................

I am lucky to say that we have no debt other than our mortgage which repayments are small enough compared to our salaries, my wife is a public sector worker and I work for a large US Multinational on a permanent contract.

Any more comments on the offers part of my query................

Idbatterim

Any more comments on the offers part of my query................

there are just so many variables... do you want to link to the house?

how long has it been on the market? how desperate or not is the seller? where is it? I think everyone just makes the assumption that ALL houses are not priced to sell which isnt the case.

ssbob

Idbatterim wrote: »

Any more comments on the offers part of my query................ there are just so many variables... do you want to link to the house?

how long has it been on the market? how desperate or not is the seller? where is it? I think everyone just makes the assumption that ALL houses are not priced to sell which isnt the case.

I don't want to link the house but this one has gone from €290k to €275k to €260k in the last 6-8months, not sure how long before that it was on the market. Previous owners have built a new house on the same road so the house is empty currently, I assume they are paying 2 mortgages.

Just want to get a feel for, if I was to offer say €170k-€180k as an initial offer would that affect further negotiations?

Idbatterim

Just want to get a feel for, if I was to offer say €170k-€180k as an initial offer would that affect further negotiations?

I wouldn't see any harm in it, worst case they may think you are a bit of a time waster, alternatively, they might come back with a counter offer however. Its all hypothetical. What kind of property and what area, those are the 2 huge factors?