How do we know our maximum we can offer?

[NotJustACigar]

A house we love is on the market at £289,000 and we are going to view it today. It's been on the market for six months and has dropped in price from £299,00 recently. The EA has told us the owners are motivated because they've found a place they want to buy. However they also say another couple is booked in for a second viewing today. Of course we don't know whether there is any truth behind the second viewing couple or if its just a tactic to make us rush?!

We will offer £250k fully expecting it to be rejected. If/when it is, we will consider going slightly above the stamp duty threshold. We only have £30k down payment due to losing money on our last house sale. But we have a good income (70k combined and I have a review panel in May where I am very likely to be promoted raising out income to £80k combined). We have a mortgage agreed in principle for £250,000. We also have a relocation package from work that will pay for the survey, solicitors, moving costs etc but not the stamp duty.

I'm thinking the highest we can possibly go is £272,000 and get the stamp duty added to the mortgage. Does that sound like a crazy plan? We don't have any DCs and our car is paid for. We have overdraft facilities of 5k in case of emergencies. And we absolutely love the house.

[MrsFlorrick]

Ah just seen. Your LTV is 10%

That means if you offer £270k, your deposit needs to be £27k and your mortgage advance will be £243k.

This means that you do not have the £8k for stamp duty.

Unless you borrow cash from family as a top up or agree that the vendor pays half.

[nerdgirl72]

If you offer at £270,000 you will have £3K plus a couple of months savings by the time you complete if you are saving at that rate.

But I don't think you should count on the vendors paying half, they have no obligation to, and would be wary offering knowing you do not have the funds required.

[MrsFlorrick]

Vendors often contribute to stamp. It's not unusual at all.

I frequently see houses/flats advertised with a "vendor pays stamp" banner.

Not all vendors will. Depends on their circumstances.

[NoArmaniNoPunani]

I really think that you are massively over stretching yourselves here. Especially given your history, you are well aware that prices can go down as well as up. If you lose 25k on this one too you'll be close to or in negative equity.

[NearTheWindymill]

Isn't this about what the house is worth. If you have £250,000 to spend, perhaps look at houses that you could purchase for £250,000. You are looking at a £289,000 house that you can't afford at present. If it's only worth £250,000 offer £250,000 but accept the owners aren't likely to bite.

Extraordinary thread.

[NonnoMum]

Just forget trying to offer 250 on a house up for 280. Either look at houses under 250 or find the stamp duty quickly. Don't ask them to pay any stamp, it'd be embarrassing...

[NoArmaniNoPunani]

MrsF I would have thought that was more likely if the vendor was a company rather than an individual

[NotJustACigar]

Not sure at all what is extraordinary Near?

[NotJustACigar]

And please read the thread, we don't have just £250 to spend. I am so happy and appreciative to get real advice on whether or not this is possible, much less happy to get snap judgments from people who haven't read the thread properly.

I very much accept that this may not be possible but please leave any emotional stuff (embarrassing, extraordinary, etc) out of it. This is meant to be a thread about financial advice please. Thank you.

[EddieReadersglasses]

I don't think you are close enough to stamp duty threshold to ask vendor to pay half. You need to take stamp duty money out of your deposit and then see what you have left

[HoleyGhost]

You know your circumstances best but at 47 and 41, I can't help but wonder why you don't have more equity.

Most on this forum have to be relatively cautious due to having dc. As you don't intend to ttc, maxing out your mortgage makes more sense.

[whineaholic]

Well , here are the facts as I see them :

1. We are in a rising maket and you ar asking strangers if you can afford to buy a house you can't afford to buy. You can't .
   
   
2. You can't afford the stamp duty even if you can afford the house.
   
   
3. You haven't done your homework if you think the vendor will pay our stamp duty. A few years ago - maybe. Now? Not a chance.
   
   
4. You are overstretching yourselves at that price bracket. I would be looking at 250 max which leaves you comfortable for fees and stamp duty.

[NotJustACigar]

Mrs Florrick your posts make a lot of sense to me. I think we are short around 5k. We could save that in three months. Therefore we will just have to either hope that the house doesn't sell right away to give us a bit more time to save up, or offer now, save £2-4k between now and exchange (depending on how long that takes) and pay the rest with our overdraft. The latter sounds a bit risky though.

[whineaholic]

5. You haven't even seen teh house so it's all a moot point anyway. You may hate it.

[mrsnec]

Good luck op, I think if you don't ask you don't get. I would work on the principal that the other buyers are ea tactics. I think offer low I hope you don't mind me saying but you could be stretching yourselves if you go to that limit maybe somewhere in the middle is more doable.

[Knackeredmum13]

Despite estate agents adverts to the contrary it's actually not allowed for the vendor to pay your stamp duty.

[whineaholic]

In such a rising market you can try offering 270 on a 290 house but I can't see them biting. Houses are selling very quickly at the moment for near asking or asking.

[NoArmaniNoPunani]

And please read the thread, we don't have just £250 to spend.

Did you read MrsFlorrick's post above with the sums? Even 270 will be a stretch and that's 19k under the asking price.

[NotJustACigar]

Wine a lot of what you say makes sense. Thanks. Though I don't really see a problem with asking for advice on this from strangers on the Internet - think that's kinda the point of mumsnet. And we aren't all born being house buying geniuses. I have only done it once before in a different country.

Holey yes we should have more deposit at our ages. I've been through a few of the reasons why we don't but there are more.

[NotJustACigar]

NoArmani yes as I have said MrsF's posts and sums make a lot of sense to me. I knew it was a real stretch as £270 and she confirmed that but that isn't the same as us only having £250 to spend total.

[NotJustACigar]

Also wine we are in the northwest if it matters. Prices are rising but much more slowly than down south.

[KarenBrockman]

Interest rates are going to rise, stick to a house you can buy under the £250k 3% stamp duty level.

[NotJustACigar]

I definitely understand the appeal of sticking at £250. The thing is the difference in quality of the house between £250 and say £270 is quite extraordinary due to this stamp duty threshold. It seems more sensible to us to try for a forever home we would love than to settle for something we aren't wild about just to save a small fraction of the total price. Therefor I think we will try waiting a few months to save more.

Thank you very much everyone who has responded.

[MrsFlorrick]

Don't get too hung up on a house. There are always always always other houses!!!!

Honestly if you can save another £5k in two months, do it!
It's a world of difference in your particular budget/situation.

You won't regret NOT buying a particular house however you could easily regret buying a particular house.

Unless your search area is extremely rural and its rare that property comes to the market, then hold your fire.

It also seems that house is slightly out of budget just now. But if you saved up for 3 months then it wouldn't be.

So save all you can for 3 months and get back into the market.

If you feel very strongly that you absolutely must have this house, then go in with a offer you can afford. Ie £260k or similar (not £270k as I think you're short the stamp duty money).

The vendor has already reduced. So that means either he is v keen to sell ASAP or he is already at the very bottom of what he can accept. The only way to find out is to make an offer.

Also. You love a house that's outside your budget. This is very common. It's the old, "if only we had another 10%". You probably love this out of budget house because it is better than other you've seen because it IS out of budget.

Your tactics currently is a reduced offer and cross your fingers for a desperate vendor in a hurry or back off and reassess what you can afford and save like a maniac for a couple of months.

[HarderToKidnap]

I think rather than offer x and ask them to pay half the stamp, offer 4k less. It just looks better to them. I would also factor in that even the quickest house move takes around 2 months from offer to completion and you could quietly stretch that to 3, as well as use overdrafts and shirt term loans from family.

I also think there is nothing wring with stretching yourself. Buy the best house you can afford. You have tonnes of flex in your budget so can cope with interest rises, which aren't happening yet anyway.

So, I would take the whole 30 as a deposit and rely that I could save or borrow the stamp duty. So top budget 280 which leaves you 2k agetr completion, and save the other 5 during the buying process.

Xx