Ftb - how much to increase offer by?

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We’re totally inexperienced and not sure how to negotiate. What would people do in this situation?

Flat is in a lovely area but needs completely gutting. New EVERYTHING- kitchen, bathroom, windows, front door, floors etc. It was on for 399k and we went in with a first offer of 360 - expecting it to be rejected. Vendor has come back with 380. 380 is our limit but would like to haggle a bit.

I think we should offer to split the difference and offer 370. DH thinks maybe work up slowly and offer 365.

It’s been on the market since June and has had four offers from developers that vendor has turned down. I don’t want to lose the flat by haggling too much. What should we do?

I’d go for 370 - it looks like more of a concession but still leaves you plenty of room before you hit 380.

Thanks - that’s what I was thinking initially.

But then last night in bed, I started thinking - what if jumping up that much looks like we have way more and he could keep pushing us up?

£365 would be my next bid

If the vendor has firmly said he wants £380,000 then don't irritate him by offering £365,000. The fact that it needs a lot of renovation work is completely irrelevant unless you can prove that similar sized flats in the same location but which don't need any upgrading works are on the market at comparable asking prices? The vast majority of vendors will take the condition of the property into account when setting their asking price.

I'd be very surprised if you could get it for £365k given the seller has come back with £380k. Is that your limit but still leaves you room do to the work you'd like to do? Also is that work to make the place to your tastes or because everything is falling apart?

You need to think how the seller might react to what you offer and say. You may be lucky to get it for £370k but it's more likely to be around £375k.

Good point. Similar flats in the same area are on for around £425. Not sure which way to play it. Don’t want to irritate him but is it usual to go in slowly and work up to a middle ground? Or would we not seem like a serious buyer?

Really didn’t expect 360 to be accepted - it was more just to test the water. He’s been previously offered variations of 340 by three other people who wouldn’t move up from that.

It’s not been renovated since the 80’s. An elderly couple rented it and in the last few years, they sadly developed dementia and the vendor didn’t get access back for 18 months after they died.

Btw don't go straight to £370k, I'd go slightly below as it then looks as though as though it's about what you can afford rather than a game to pay less.

@wowfudge that’s what I was wondering. How to make an offer that doesn’t give away our limit immediately but also doesn’t look like game playing.

It’s worth saying I have ZERO poker face and would probably just offer him anything to get it

I’d go with the lower amount too. I’ve just had an offer accepted by only going up another 2k! Admitted they came back initially and said no. I said, ‘ah well, that’s me out then’. 24 hours later they’d changed their minds.

What did your surveyor value the property at?
What price are comparable properties going for in the area? Is it overpriced?
In my area, although the market has slowed down, it would be highly unusual for a property to be unsold since June - so would most likely be overpriced or have huge structural issues.
However, it took my friend 9 months to sell her property (average 2 bed family home) In a different part of the Uk, which she was told was fairly normal for her area.

With our current house, we paid a bit more than we wanted to compared to similar properties as the vendors were divorcing and splitting the equity 50/50. They both needed a certain amount and were holding out till they got it. We paid the asking price in the end. Pretty much most properties in my area go for the asking price anyway. This property was at the very upper end of selling range.
On zoopla you can look up your street and see what neighbouring properties have sold for.

So much of property buying is having to make head or heart decisions.

Just say your absolute maximum is 370 and be prepared to walk away. I bet they go for it especially if you are FTB and ready to proceed.

I think some vendors lose patience with buyers who are "just testing the waters" or trying to second guess them. He's told you the price he wants. There's no fixed way to go about this, no science to it, no matter what Kirstie and Phil would have you believe. He's obviously priced it at just under £400,000 for a reason.

@Waterlemon - the OP's surveyor won't have been anywhere near the place (in England and Wales) as the survey is done once a sale price has been agreed. It's usually the mortgage provider's surveyor who does the valuation.

I think we’re leaning towards 370 but wavering that perhaps just under. 368? I don’t want to play games but recognise it is a bit of a game. I would be happy to meet in the middle somewhere around 370-something.

I'd go back and say you've thought about it and looked at your renovation budget and you could go up to £368, in a bid to try to meet him in the middle (actually say that) and see what the seller has to say. If they say no then either the EA will tell you he's said £380 is the lowest he'll take or possibly tell you it needs to be closer to £380k, in which case you can say you don't want to waste anyone's time, what will he accept?

Ime it's always better to give a rationale for your counter offer.

Don't ever go up in £5k increments, it looks like you have plenty of money and are just haggling. Your next offer should be more considered, and something like £366,500 so it looks like you are pushing yourself to the max. Also don't underestimate the cost of having to do everything to a property. Are the similar properties at £425k of the same standard or finished?

I'd say you'll meet him in the middle at £370K and this is your final bid. Then leave on the table. It would be surprising if he didn't accept it.

If your survey and /or mortgage offer comes in at a lower price you can go back to him with a reduced offer. Seems like he's not attracted by £340K in cash from developers!

The other properties are Finished and done up. We went for 370 and will continue as you suggest Snapped. We’re in London and this is a really good price. I don’t want to mess about, really. 380 is our max so will do the detailed, considered offers if we continue negotiating.

Id offer £368. 365 given how much they've come down isn't much of an offer and £370 feels like showing your hand too much. If you go for a non round number they may think you're up close to your limit, that your limits more £370-375.

I'd go back and say you've thought about it and looked at your renovation budget and you could go up to £368, in a bid to try to meet him in the middle (actually say that) and see what the seller has to say. If they say no then either the EA will tell you he's said £380 is the lowest he'll take or possibly tell you it needs to be closer to £380k, in which case you can say you don't want to waste anyone's time, what will he accept?

I think this is excellent advice - and about giving a rationale for your offer. It shows you’re serious and interested, but not a pushover.

Don’t forget, you’re in a strong position. You and the vendor each have something the other wants, but I’d guess that there are fewer FTB’s than FTB properties for sale.

Oops, missed your update.

If similar flats are priced at £425k he’s obviously factored in the disrepair?

We settled on £375 so really happy. Thanks for everyone’s advice - it was so helpful steering which way we handled it!

Now just have to get the mortgage application done - I really daren't hope until we actually have it. I’m 39 and this is literally the first time I’ve ever been in a position to buy. Apart from children, it’s all I wanted as an adult and just never been able to do it!