how to negotiate(17 Posts)
I have found a bungalow that is a complete renovation. Been on the market two years. Three offers fallen through for various reasons and now being advertised as cash/low loan to value buyers.
Vendor bought for £160k (£30k under asking price) in 2014 and now.selling for £185k. Having seen the original pictures and the bungalow, all they have done is carpet and paint. The place is in more disrepair than when they bought it. Roof tiles, back boiler, not replacing garage door glass etc...
How do i negotiate this? I don't think its worth £185k but am aware that they will want to sell for more than they paid. I love it. Also, the lower i am accepted the easier a low loan to value mortgage would be for me. I am definitely not a.cash buyer. Depending on survey i would have to make do and mend while I save for works to be done.
Thank you for helping.
Have you checked whether you'd get a mortgage, some banks won't offer them if the house is in a bad state?
Hi IFailed, I am waiting for a call back with my FA to find it.
Good luck. Once you've got the money, I'd be assertive, tell them you are a serious buyer, you have the money and you also have a very good idea what it will cost to bring the property back up to a liveable state. Hence your offer is £160k, take or leave it. If they do accept you will be looking to complete asap. If they've got any sense, they'll either accept, or ask for a few 1000s more, I wouldn't go over 165. Always be prepared to walk away.
3 sales fallen through? Looking for a cash( or small loan buyer) ?
Non- standard construction?
First thing you need to do is pinpoint why this house is going to be so low valued for mortgage purposes.And it's likely to be much bigger stuff than a broken window, or needs a new boiler. You'll no doubt find out on survey, but that costs you.
Press the EA / seller for that info.
Issues with a house doesn't necessarily mean it's not worth buying. But it's difficult if the seller's living in cloud cuckoo land about its value.
How does their price compare to local properties without issues?
Thank you for your replies. One survey suggested it needed underpinning, two surveys didn't. I need to ask what type of survey they had.... Price wise it is higher than presentable 3 bed semis in a less desirable road (EA language not mine), but lower than that of naice bungalows in a more desirable road. It's the only bungalow on it's street. Everyone just keeps banging on about its potential...but i think its way over priced. Do you ask £25k more just for owning something for two years and not doing anything to it? Seems cheeky and grabby to me! Still waiting for FA. Thanks everyone x
- Firstly, we're in a falling market.
- Secondly the only work they have done in the last 2 and a bit years sounds cosmetic. No maintenance has been done by the sounds of it.
Both of the above points mean that they cannot seriously expect to sell for more than they bought. The way I would be highlighting this to them, is to ask exactly what they have done in 2.5 years to add £25K of value, given all of the major works that need to be completed.
They won't be able justify it; carpets and paint mean nothing given the works that you need to do, so the only way they can expect £25K profit is in a rising market - which is not the case right now. They need to be realistic about their asking price and I suspect that a refusal to accept this is what is preventing them from selling.
Finally, I would be asking the EA very specific questions about exactly why each of the three previous sales has fallen through - and if the EA can't answer that then they need to find out from the vendors. Make it clear that any offer from you is contingent upon full and accurate information from them. I suspect that it's not as straightforward as they would have you think.
Oh and if there has been a survey that suggests underpinning is required, I'd be getting a structural engineer in to look at it, to confirm whether subsidence is an issue. The fact that two other surveys haven't mentioned it doesn't mean anything - those surveyors might not have noticed it.
If it is subsidence then I wouldn't touch the place with a bargepole.
I thought that might be the place. Gutted...will investigate further
I'd also be concerned about what the current owners have done with it. They don't sound very experienced TBH. If it's a bungalow that's not been touched for 30-40 years, then it's highly likely the plumbing and wiring will need work. The fact that they have painted and put new carpets down screams that they don't know what they are doing - otherwise why on earth would you waste that time and money on a property that needs gutting and renovating?
I'm always wary of properties which are being sold by 'enthusiastic DIYers'. I'd put my money on this being purchased as a doer-upper, by people who haven't got a clue of what needs doing. Only to find out that the work is outside of their skill-set and requires professional trades - for which they don't have the money. Hence slapping some paint on the walls and carpet down, in the hope they can sell it on and get rid of an expensive mistake. The work isn't the issue - it's the potential bodge-jobs that they've 'fixed' or tried to cover up whilst they have been in there.
If you have plenty of cash as a contingency, can get the property for the right price and you have lots of experience then go for it. Otherwise, walk away.
am aware that they will want to sell for more than they paid.
That's their problem, not yours.
Decide how much the finished house is worth to you, knock off how much it will cost to get into that finished state (get reliable, realistic estimates!) plus a few thousand extra (to compensate you for the angst of project management) and that's your price. Offer them 'best and final' and be prepared to walk away.
How much they paid for it three years ago is irrelevant. They have been trying to sell for two years - they are not in a strong position to barter.
Only suitable to cash or low loan to value buyers mean that when it was surveyed the mortgage companies did not value it anywhere near the offer/price wanted - sounds like the current owner wants to get out and be cost neutral having lost buying and selling costs - not your concern. Do some thorough research - ask around to get the real story - neighbours will know - before committing to expensive surveyors and structral engineers
I wouldn't touch it with a bargepole tbh. They're crazy with their asking price. I would be looking to pay no more than 25k less than they paid for it personally!
If you have the budget to completely renovate and underpin it, why not just buy a house worth 100k more? Serious question. Is it on a fantastic plot or something?
Someone beat me to it! Oh well. Thanks for all the advice
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