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Negotiating purchase price

(15 Posts)
rebl Thu 13-Aug-09 22:02:27

We have sold to 1st time buyers and have accepted a good offer (7% below asking price which round here is good). We started negotiating on our 1st choice house which in the end all fell through because it turned out they wanted asking price (£250k) or higher which we just don't have plus the house wasn't worth it. The estate agent actually told us to walk away because we were being pushed too high for the house. Turned out the sellers were nutters and have managed to annoy all the estate agents in town and now no one will sell their house!

So we went with our 2nd choice house. On for £240k and has been on for a year. Put in offer, discover it has 3 owners, one of whom is only contactable by letter shock. So after 2 of the 3 come back and say no (not the one who needed to receive a letter) we put in our highest offer thinking that it was going to take an age going back and forth with letters! Today we've heard that 2 of the 3 say yes but one is saying no (the letter man has said yes). The one who has said no is the one who holds majority %. She says she wants asking price. Estate agent has adviced that this is unreasonable in the current market, that the asking price is a year old so it high for todays market and advises against paying it. We can't anyway, it needs too much work doing on it for us to do that.

So rang our agents to ask if we should have not accepted below asking price for ours or have we just been unlucky with the 2 places we were interested in. They say that we've just been unlucky but I'm starting to get serious concerns about this. We have 1st time buyers moving fast. We have 2 children, one of whom is disabled and a move is a logisitcal nightmare so I don't want to move twice if we can avoid it. We need a house to live in and in a better area. We don't doubt whether moving is a good idea but we are being to doubt whether we can afford to move if people are just going to demand on or above asking price unless we do the same. Making that demand would loose our buyers. I know it would so its not productive to go down that route but equally we need a house.

Have we just been unlucky with the 2 houses we've liked and been told they want asking price or higher? Or am I doing the negotiating wrong? But then we've now walked away from both and they've not come running. But equally neither have sold in the 12 - 18months they've been on.

mrspnut Thu 13-Aug-09 22:09:29

I think you've been unlucky. Prices aren't as great as some sellers think they are

Speckledeggy Thu 13-Aug-09 23:35:56

For whatever reason, they don't really want to sell.

I put my flat on the market in Feb 2008. Looking back, it was priced too highly. I did, however, drop the price by £5k. When I eventually got an offer in June I really wanted to sell. The offer was a bit on the low side but we batted prices backwards and forwards until we reached 7% below asking price. Looking back on it now I did really well.

Now we're on the other side of the fence. Have found a perfect property we love for £325k. Our gut feeling is that it's just not worth that much and the estate agent has said that they will only accept £320k. They've turned down £315k already so I can't see much point in putting in an offer although we are chain free with our mortgage agreed. They're mad. By the time they get the extra £5k the house they want to buy will have gone up by £30k!!! They have also been in the house a long time and have no worries about negative equity.

Like you, we want to move quite quickly. I would suggest you find a house you like with a vendor who is keen to negotiate or you'll be hanging around forever.

Everything happens for a reason and in a bizarre twist you may find that you haven't even found your dream house yet!

NoseyHelen Thu 13-Aug-09 23:47:18

Clearly these vendors don't have to sell now so they can hang on - and so would you if you were them!

We had our house on the market at the EA's recommended asking price. After 10 weeks we reduced it by 9% and ended up accepting an offer a further 3% lower which was blooming painful. However, we were in a great position to offer on the house we hope to buy but our offer was definitely too high and the valuation agreed but that's the way the cookie has crumbled for us - squeezed at both ends, feeling like both our buyer and vendor got a great deal. sad

rebl Fri 14-Aug-09 07:15:39

I'm sure they don't want to sell. Mrs whose said no was born in that house. Grandfather has owned it from new and still lives in with Mrs. Mr and Mrs have divorced and she can't afford to buy Mr out. Hence sale is being forced. Grandfather and Mr has said yes to our top offer, Mrs hasn't. They both know our was good and everyone needs to move on. She very clearly doesn't want to move and therefore is asking for a stupid unrealistic figure. She holds the majority % as has custody of the school age kids.

ABetaDad Fri 14-Aug-09 07:28:50

There are very few transactions going on n the housing market at the moment because sellers are refusing to drop prices but buyers just cannot borrow enough (and banks are unwilling to lend as much) to meet the asking prices sellers are insisting on.

Green shoots are a long way off in the housing market. Look at the record number of repossessions beng reported today on the news.

I overheard an estate agent and a commercial propery (offices, shops) investor talking together in a restaurant last week. The investor said he had offered to buy a commericial bulding at 50% off peak price from a bank that was repossesisng. There were no other buyers. I have a frIend who organises loanS on commercial property and he confirms the UK commercial proerty market has fallen 50% - although only forced sellers and repossessiosn are acceptng those kind of prices. Most are just hanging tight hoping desperately for recovery.

If the UK residential housing market followed the UK comercial property market it would be carnage.

rebl Fri 14-Aug-09 08:15:54

ABetaDad - That sounds dire on the commercial front. We have accepted a reduction in price thinking that others on the market were also realistic and would accept a reduction. Seems we've been unlucky to choose 2 houses who are owned by people who don't really want to move.

I guess we'll wait to hear what they come back with today. We'll also arrange a couple more viewings for this weekend although we've pretty much exhausted all options. I'm tempted to find a rental through the same agent and ask to view it and put pressure on and show that we very serious about not loosing our buyers and will go into rented if we have to.

wheelsonthebus Fri 14-Aug-09 10:21:58

where we are, properties are going on average for 20k less than the asking price, and sellers are prepared to wait until they get that (of course they factor that in to the asking price)

HerHonesty Fri 14-Aug-09 10:30:33

it sounds like a bit of a nightmare scenario - three owners!! i would walk away.


commercial property has been on its downers for a long time, oversupply, lack of demand, overinvestment, additionally impacted on by the changes in the tax regime in other countries making UK investment less attractive

residential property is a completely different market and is very related to the area you are buying and selling in and the relative supply and demand. There are definite "microclimates" where things like proximity to schooling, transport are keeping prices stable. so you need to be very confident that your area is one of these areas. unfortunately most people believe they live in one of these, they are not that common.

additionally i think a lot of people think that they can buy their "dream house" at a knock down price. clearly if its your dream house its bound to be countless other people's as well which unfortunately also has an upwards effect on prices.

somewhathorrified Fri 14-Aug-09 10:47:04

Don't be disheartened. There are plenty of houses out there and it's just unfortunate that the houses you liked are owned by disillusioned fools. Chin up, walk away and go for the next one.

dinosaurus Fri 14-Aug-09 11:15:22

Hi rebl

I am in the same position as you. Sold my house for a price which reflected the drop 6 months ago in our area, ie approx 10% less than peak 2007 prices. I bought the house many years ago, so my mortgage was quite small anyway and I thought that whatever I bought should also reflect the drop. I can put down a 40 - 50% deposit and have a mortgage ready to go, but have had offers turned down on houses that are 10K less than PEAK prices. There are so many people wasting buyers' time, just putting their house on the market to see what they might get for it. Many EAs round here seem to be advising people to put their houses up for peak prices, and saying that when sellers accept a lower offer it will seem like the buyer has got a good deal!
I have therefore come to the conclusion that the sellers either can't move (due to falling into negative equity) or don't actually need to move, or are just plain greedy. Another house we were interested in did briefly consider a slightly lower offer, but said that the house they wanted wouldn't accept a lower offer, so they refused to accept ours.

Anyway, I am now renting, which isn't ideal, and prices don't seem to be moving downwards very quickly. There are a few houses selling, but, the Land Registry is showing that these are the few sellers who ARE prepared to accept lower, for eg, a house recently sold for £130 000 after being on the market for 18 months for £160 000.

I am now actually considering buying a new build in my area. Initially it didn't cross my mind to do so, but, after visiting a development in my village, I was quite surprised at how spacious the houses are AND they are on sale for very competitive prices. I can understand how some people might be constrained financially, but am getting fed up dealing with sellers who don't live in the real world!

rebl Fri 14-Aug-09 15:58:20

Dinosaurus - Sounds totally the same. I think there are alot of people who have been on hte market now for 12 - 18months so the need to move has really gone. We need to move, school application is by December so we've accepted a sensible offer.

The ea hasn't come back to us yet with the price they're prepared to sell at. I've asked for them to arrange viewings with 2 of their properties that they have for sale over the weekend. Decided its time to put press on them.

rebl Sat 15-Aug-09 21:25:55

PMSL today. The post contained the official rejection of our latest offer. Then 20mins later the phone rang, was EA. The vendor has come back with an answer to our question of what is the minimum they will accept. The answer which took 48hrs for them to come up with is "Don't know and please don't reject the offer we rejected but just don't say yes to it"!!!!!

Seriously!!!! I can't believe it. So glad we didn't just keep throwing figures at them when they don't even know what they want. The EA has told me that she's decided that she'll just negotiate on the house they want for them and come back with a figure to me when she's done it. She is under no illusion that we have no more money and everything over our last offer has to come from our buyers.

There is a glimmer of hope that we will get the house we want after all.

Went and saw another house today. It was beautifull inside and I wish I could say I liked it but it just wasn't for us. Hopefully we won't need to find another house now.

toja555 Mon 17-Aug-09 16:40:31

Here is my very recent experience briefly:
House No. 1: Max budget: 162k; asking price: 180k; our offer: 162k (rejected). Someone snapped up for more the very same day.
House No. 2: Max budget: increased to 190k, asking price: 180k, our 1st offer: 170k (rejected), our 2nd offer 175k (rejected), our 3rd offer 178k (rejected and house taken out of the market because the vendor’s offer to some other house (based on our offer) was rejected).
House No: 3: Max budget: 190k, asking price: 200k, our 1st offer: 190k, the vendor came back with his price 195k, eventually agreed on 192k. We already exchanged! We consider our vendors very lucky, because we made an offer the first day of viewing and they avoided all the hassle. However very sad that we did not think of our possibilities increase our budget earlier and lost the house No.1.

rebl Mon 17-Aug-09 18:14:56

How frustrating. I thought this was a buyers market but it doesn't seem to be does it.

We're going to give it another week and badger everyday. If we don't hear anything that we can proceed with negotiations on then our own agents will call and find out whats going on. But really we're running out of time. I wish we could find another house we like.

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