"Is that your best and final offer?" - how to respond?

[PingusMistress]

We made a cheeky low offer that was rejected, and the estate agent asked us to come back with our best and final offer. There are no other interested parties that we know of. We don't want to pay more than we have to, obviously, but we don't want to shut the door on further negotiations. Tempted to put in another low-ish number and pretend that it is final (although I'm rubbish at lying!). What is the best tactic?

No so @FabulousSophie? You are wrong: plenty of posts I've made where I've said I think the poster's house is overpriced or stated how/when I believe a potential purchaser can get the house for less than the asking price. I sold my own house at less than asking two years ago and as we were able to get our onward purchase for less than we anticipated. I was happy to accept a bird in the hand!

I try to reply to each post that prompts me to respond on its merits and a lot of that depends on how a poster puts themself and their rationale across. I try to read between the lines and think how a particular negotiating tactic/argument might be received.

wowfudge I am on the side of the buyer. The market in London is now falling rapidly, and outside London it is at peak prices (on current trends due to start falling later in the year). I would hate to think buyers at current prices are very likely to lose money if they need to sell again within the next few years (due to unemployment, illness etc). I understand, banks and mortgage surveyors are also taking this view, because if the bank needs to sell a house in a hurry, it does not want to take a loss.

I don't think in such black and white terms. People can be buyers and sellers in all sorts of different circumstances and at different life stages. Those are your views and you are entitled to them. I don't always side with any particular group when it comes to buying and selling property.

Out of interest @FabulousSophie - are you based in London?

wowfudge I used to live in London. I sold my flat for £950,000 in Oct 2015, which was around the peak. Given recent sales, I would now be lucky to get £700,000 to £750,000 for it. The couple who bought my flat are now sitting on a loss of at least £200,000. I would like to help buyers here potentially avoid making a very expensive error.

That's market forces though - are you really saying you would have sold for less because that's what it boils down to?

Depends where you are OP.

Good areas of Manchester, Sheffield, Leeds - prices are rising, the sellers are not unreasonable.

London or the south - it’s a falling market, and likely to continue. I’d stand firm, you might get a better house cheaper in a couple of months

I don't understand 'the outside needs landscaping' as justification for a lower offer. Houses are already priced according to the state they are in! When we sold our first house we had one couple make a low offer 'because the kitchen needed extending'. Erm, if it had a bigger kitchen the asking price would've been higher . They subsequently put a higher offer in, which we refused as it was clear they was going to be pain-in-the-arse buyers. We accepted someone else's slightly lower offer instead, because from chatting to him he seemed like (and turned out to be) a decent, straight down the line kind of bloke.

I agree it depends on the market, but don't underestimate people's unwillingness to deal with people who seem like they just want to screw them over. They will absolutely cut off their noses to spite their face in this situation.

wowfudge I was lucky that I sold whilst the market was at peak strength to a seller who offered my asking price the day it went up for sale. If I had known the market was about to take a tumble, I would have accepted a lower offer. At the time, I did not know it was the peak, but in retrospect that was pretty obvious. Incidentally, at the time, there were much worse flats for sale at much higher prices, so I wasn't being greedy.

I think the key thing is that most people still buy a house or flat as a home. If you want to treat property as an investment, you have to play the long game, which is what most experienced investors and developers do. Unfortunately an extended period of continuously rising prices encourages those people who probably really shouldn't to invest in property thinking they are going to make a lot of money fairly easily in a shortish period of time.

I never understand the Mumsnet offence at low offers or high asking prices. The whole point is that there isn't a fixed price, it's not like buying a carton of milk in your corner store where the price is X and you either pay it or you don't.

If a seller has priced the house at, say, £200,000, it takes no more effort to say "no thank you" to an offer of £150,000 than it does to an offer of £195,000. In fact, arguably the latter would take more time and handwringing.

An offer is about exchanging information. It says "I would like to buy this house, at this price". It's actually more useful to the seller than the buyer not bidding at all. While today they might want to hold out for £200,000, next week something could change - a job offer that means a more immediate move, the house of their dreams comes on the market, a loss in income - and they know that if necessary Buyer A would buy the house for £150,000. That's surely more useful than Buyer A saying they can't afford £200,000 and never being heard from again.

It's a negotiation, so negotiate. Take the emotion out of it.

wowfudge It is not a case of looking at a house as an investment or not, it is a case of being financially sensible. A buyer should always consider that they may not have the luxury of living in a home for many years. Unfortunate events frequently happen, and a buyer would be foolish not to factor that possibility into their offer. For instance, any buyer could be made unemployed or fall sick, and therefore have to sell at a loss when the market is low. Considering the upward price trend is on the turn, it could be catastrophically unwise to be blind to that possibility.

I think it really depends how much you want the house, but i would ask what the lowest offer your sellers will accept is. I know that when we sold, we had a lowest price in mind, and when we made a second offer on the house we bought, the vendors actually replied by telling us what the lowest offer they would accept was.

I don’t know where you are, but I know there are several houses for sale in our village, and the sellers are getting tied with cheeky offers. Our neighbours, for example, had several offers, but they were all around 10% below asking price, and they had already dropped the asking price. Typically, houses here only sell for 1-2% below asking price. (Our neighbours did sell within that margin, it just took a while).

Equimum I don't know where the expression 'cheeky offers' comes from. If those prevailing offers are the only offers on the table, it is sellers who are being 'cheeky', by refusing to accept the prevailing reality of what buyers are prepared to pay.

@FabSophie I agree!

It has a double meaning as does "time wasters" and "unmotivated or not serious" buyers. It goes both ways. Vendors can also be described as these things when they are living in a cloud and not accepting the market reality. For example, recently we offered a realistic price for a flat in London using Land registry sold prices data, the vendor wants 10% on top of that, even though there is no evidence for this price being achieved anywhere near the area and the flat has been on the market for 5 months without a single offer. In this situation; who's wasting whose time?

It is so frustrating as a buyer to wade through all of these houses that are "for sale", but you know that they aren't because the vendors will never accept an offer based on the current market reality for whatever reason.

I think if you are serious about selling now and prepared to accept a reasonable offer, do it. Otherwise, wait until after Brexit / or however long it takes / when the pendulum swings back into the buyers market territory.

FabSophie - Apologies, I didn't realise you were being sarcastic. I'm usually quite adept at spotting sarcasm or irony but you got me there!

Whether something is a "cheeky" offer or not depends on lots of factors. 13 years ago we put in what might be considered a cheeky offer on a house. Vendor got all huffy and offended. We walked away and ended up buying something else, no problem.

Then 3 months after our original offer the vendor's estate agent got in touch to ask if the offer was still on the table. The vendors had not been pricing realistically and no other offers had been forthcoming. So our offer wasn't, in fact, cheeky at all! By getting huffy about our supposed cheekiness, they lost a sale.

Given that over HALF the houses brought to market subsequently get withdrawn after failing to achieve a sale, I suspect there are considerably more deluded, unrealistic, time wasting ''sellers'' compared to deluded, unrealistic time wasting buyers.

fabsophie, I do agree with you to some extent. I think what is happening local to me, though, is that people are hearing about dropping prices, coming from other areas, and offering significantly lower than the prices which already factor in a reduction in the market over the past year. Our neighbours, for example, initially marketed at £550, reduced to £525 and started getting offers of £450-475 from people with little idea of the local market. What is actually happening locally, is that people are getting their revised prices, as long as they are prepared to wait a while.

jemihap I think you are spot on. Rightmove is currently awash with adverts placed by time-wasting sellers. They are so annoying because I need to waste such a lot of time trawling through their delusional listings to get to the realistic ones.

Equimum, are there enough local sellers around your area to buy all the houses? Or have outsiders traditionally made up a large proportion of sales?

Equimum sorry I mean local buyers, not local sellers.

Just an update in case anyone is interested - we had an offer accepted (yay!) at 8.5% below asking price. Having been through it, my advice would be not to give your absolute best and final offer when asked, as the EA will always try and push you a bit more so keep something in reserve.

Congratulations OP! Hope everything goes smoothly.