Which house to buy? First time buyer angst 😬

[OnTheJourneyOnwards]

We seem to have found the ‘perfect’ house for us. Not a single thing wrong with it, could just move in. All renovated about 5/6 years ago - new kitchen, new bathroom, new downstairs loo. Even the gardens front and back are nicely done (and low maintenance). Let’s just say my husband and I LOVE it 😍

But… it’s top of our budget. We’d be paying almost £1000 a month mortgage and our rent is less than that. Mostly because our clueless landlord hasn’t put our rent up in years (thankfully).

We technically could pay that much. But it doesn’t leave much disposable income.

However, we love it and think living there would make us feel happy.

The other option is to approach our landlord (who is 90) and ask to buy our rental house. It’s probably worth £20-30K less than the house we love… but it’s in need of some renovations. New downstairs loo, a mould/damp problem, a new upstairs bathroom, replastering the stairs and upstairs hallway…

We don’t know which to go for.

If we bought our rental we’d be paying about £850 mortgage.

But we don’t have savings to do renovations.

So what’s the best option here?

We put an offer on the dream house of £10K less than asking price… immediately rejected 😭

What now?

Increase your offer if you can afford it. Does the house look to be priced fairly compared to others locally? If you have the money offer asking.

We have one kid, and can’t have more (a deliberate choice), and I’m self employed so that I can do 100% of school drop offs and pick ups without paying for childcare. So our childcare cost is zero.

Also, I told the estate agent our max budget (rookie error I guess) so she says they want the asking price and no less.

Our deposit is a gift from parents, and they are adamant that it has to be all for deposit. I asked about using it even for a new boiler as many houses we saw had terrible old heating systems. But they won’t even consider it. It’s all money for the investment in the house.

Push to the highest you can go, we have done this in both cases with the houses we loved and have never regretted it and I believe they were worth the price. As other people have said, renovations are expensive and a headache!

That’s really bad advice in the current economic climate particularly if they might want to move again in the next 10 years or so.

Well, of course it was rejected.
For the extra £10,000 you Muppet

The works to the rental will cost 20-30k.

We just added a down stairs bathroom, cost 15k (had to move kitchen which meant back to brick in that room and new wiring).

Then £4k for new extension roof, £1k for painting/decorating (all done DIY but need paint, fillers, supplies etc...) and £500 for carpets (fitted DIY). £500 for other assorted little bits.

That about as minimal a renovation as you can do £21k and we haven't tackled the damp issue yet (which will be another 2k and we are lucky the damp issue is fairly minimal, only 1 room and no mould issue).

£10k is a standard reduction on a house, most houses have £10k or 10% built into the asking so they can do reductions or take lower offers. Nothing remotely stupid about it as an opening offer.

Is it heck.
My house will be going on the market for the Price that I want to achieve for it no pissing about that’s the Price take it or leave it like buying a can of beans off the shelf. It’s been that way for the last 10 years.

You have an extremely outdated view of the current property market.

Have a look at average initial advertised price vs average sale price data and you’ll soon see.

10k under asking is an exceptionally good offer unless the initial price has intentionally been set low. 10% is more typical.

Mortgage diff of 150, not huge and renovations will cost a lot of time and money. Go with the perfect one

I think you’ll find it’s you. That’s got the outdated view.
There isn’t any negotiation it’s take it or leave it.
And that’s why her below 10 K offer has been rejected 🤦‍♀️

Agree that it’s you that’s wrong; do you have any recent experience of buying?

Op, if it’s such a perfect house, there is a risk someone else will come along and offer market price or over.

Whether you accept this or not, the strategy employed by Estate Agents is not to Price things over 10% and then drop them 10%
It’s a waste of everybody’s time, that just because it was previously done that way it does not mean it needs to be done going forward.
My house when I am ready to put it on the market will be for the exact pounds and pence that I will accept to sell it.
If somebody would like to buy it, they may.

If they would not, they don’t have to.
It’s incredibly simplistic and as I say the reason why her 10 grand below asking Price has been rejected, it’s not good enough. They want more money for it.
Whether anybody will be willing to pay that or not, will be a different matter.
But in that case, the house just doesn’t get sold.
Nobody dies

Just to give you an idea of how stressful renovations can be, as a single mum with two young kids I was left without a bathroom (I only had the one) for six weeks while getting a new bathroom put in by a major chain UK DIY store. It took them over six months to fully finish it.

just because you don't like it doesn't change it.

Imagine thinking your views control an entire market lol.

As I said that’s a very outdated view. The market today bears no resemblance to what it was even a few years ago.

Property is no longer an appreciating asset. That changes everything.

The problem many people have is that they can’t accept that prices have stalled and in many cases fallen. This leads to EA over valuation to gain business which inevitably leads to reduced sale prices.

Very typical for a house on for 700k to sell for little over 600k. That would never have happened in an appreciating price market but those days are long gone.

Nonsense. About 3 years ago we had an offer 8% off the listed price accepted - and that was in London so far more than £10k off. It has happened to many people I know. Obviously some people achieve asking price and sometimes more, but you are simply wrong to suggest that this is how the housing market works. If it did, why are houses so often reduced in price? Why is sold price so often less than the listed price?

OP - nothing wrong with you having made an offer, but it obviously hasn’t worked. Since you have told the estate agent you can pay asking price, I’m afraid they may have shared that with the sellers. If you love the house and it is affordable, perhaps offer asking price and secure it if you can. It will likely be more affordable long term than buying and doing up your current rented property. Good luck.

I know you can offer under and people do.

But when I see THE house. I don’t mess around. I go in over, highest and final every time.

You atleast have to go in asking now. And it’s tricky because now it does look cheeky to go over.

You can also add other conditions to sake to tempt them. But I wouldn’t recommend for first time buyer unless you have experience or expertise (like offering subject to NO survey)

Get the turn key property. You either have a huge deposit or don't live in the SE. I'm one of the boomers I keep reading about on here,that bought a house for peanuts on one wage (actually I had several jobs, and a now ex H) we bought an expensive council house in 1985, mortgage rate was 16% and just under £1k a month. Apart from that one, we've always bought doer uppers,(ugly divorce, house repossession) that's the only way we could afford to buy,DH does all the renovations himself, with the exception of double glazing and driveway. I had no kitchen for 4 months, then a couple of years later,no bathroom for 4 months. 10 years ago it cost £5 for the materials, alone.

Ex council house, NOT expensive, that was the phone!!

But it quite clearly is controlling the market because it’s supply and demand and fundamentally the supply has to be there.
And as the seller, I’m the supplier of whatever the goods might be
Hence her offer has been rejected. We have real life real time experience.