Negotiating Advice

[kellyb220982]

We viewed a property twice and then decided not to pursue as it is on a street with a bad name in the area and we felt it was overpriced at £115k based on nearby sold prices and the work needed (new kitchen, plastering/redecoration/carpets throughout, renovation of an outhouse accessed by/attached to back door, work to garden front/back and creating off road parking etc etc). The EA has now been in touch saying the vendor liked us and is willing to knock £10k off the asking price for us only. When we meet him at the viewing he explained it had been a rental since he bought it in 2007 for £99k, he bought it cash and is one of 4 rentals he owns but the only one in this area and he's decided to let it go.
Me and the DH are now considering taking it on to renovate, keep couple of years and hopefully make a bit of money (not guaranteed I know) so we have a bigger deposit for our forever home (house prices in the area for what we really want is out of reach at the minute and I feel we are wasting money on rent), the mortgage would be a lot less than our rent so we could afford the work and save and my husband can do most of the work himself so thinking £5-6k to do a good job and hopefully get the £115k in 2-3 years. The problem is we can't agree on a price to offer to start with. The cynic in me makes me think there has been little interest and he wants it gone quickly - on market nearly 3 months. He knows we can move quickly and need to (6 months pregnant) so I'm thinking be really cheeky and start at £95k and work up to £100k max if we really have to, my husband doesn't want to be rude or turn the vendor off so wants to start at £100k and go to £102.5k. We have also discussed offering £100k and leaving that on the table as final but again I'm not sure that's not too high and should we be bold.
The house opposite sold for £114k in Dec but only needed basic decorating doing, had a drive/garage, a conservatory and views onto a grassed/tree area. The house next door sold in Nov for £118k and has a private drive, immaculate inside, extensive gardens on 3 sides, a summer house.
Any advice?!?

[willconcern]

If he was making money renting it, he wouldn't be knocking the price down to nearly what he paid for it.... I woukdn't touch this with a barge pole!

[kellyb220982]

Thanks willconcern - he told us it's because it's not near where he lives or his other properties. He told us quite a bit about himself and it's all swaying me to go low and stand my ground if I'm honest.

He was early 60s retired 10 years ago after being a director at a well known drinks company, now helps finance his daughters beauty business and has links to Man City apparently?!? Also drove a very big, very new BMW X Series car.

In fairness despite the street name it is actually a little cul-de-sac of 4 houses and a road runs between the cul-de-sac and the actual street of the same name where all the 'dodgy' houses are. Kinda frustrating they didn't call it something else in fairness.

[Charlieiscool]

I think you are underestimating the cost of the work involved, even doing it yourselves. However, if it will be cheaper to be there than renting then it has to be worth moving so that you will be secure in your own place when the baby comes. I think £100K is OK given what you say about the houses nearby and he is reducing from the asking price of £115K. You could try an offer below that, say £95K and if it is refused you can raise it as it is just a business transaction. If you think another buyer might beat you to it by offering the £100K then you could lose the house by haggling and I don't really buy the idea that he'll cut the price for you only. It is hard to advise you without local knowledge. If you think you'd be happy in the house for the next few years then go for it, don't stay in rental where you could be given notice at any time. Good luck.

[Obeliskherder]

The seller sounds like a skilled salesperson. I reckon the chances of him being offended by a cheeky offer are very small, whatever he says in response. Don't get flattered into anything, don't pay too much, make sure it's really the right house for you, and be prepared to walk away.

I think if a profit could be turned by a refurb, the seller would have done it already. It can be hard to do especially in this price bracket - new kitchen, carpets, and bathroom might well cost more to install than they add to the value. And if you are looking to move on soon, you'd also need to make enough profit to cover the extra cost of buying and selling (£thousands) before you see a penny of actual profit in your pocket. And doing it all round a baby is really tough. Tread carefully.

[Charlieiscool]

I think a landlord might well want a quick sale and wouldn't necessarily want to do a refurb or continue to rent if he wants the money he has invested in the house back to use elsewhere.
He might be happy to accept the money he paid for it as the house would have been paying him more in rent than a bank would pay If he'd left the money in a bank. The capital gain might not be as important as quick access to the funds.

[whois]

If he was making money renting it, he wouldn't be knocking the price down to nearly what he paid for it.... I woukdn't touch this with a barge pole!

Not true. I sold a my house for less than we initially paid as the market had moved downwards. I had been making a good rental return but the property was far away so hard to manage and I wanted to repurpose the capital.