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?

Of course you can do what you want but estate agents do over price to please the seller, and then encourage negotiation to find a balance between the sellers and buyers goals. You may not choose to do this but many others do because buying and selling is about the best interests for two parties.

I don’t believe a Estate Agents do that any more. I really don’t.
You look at new builds, walk in you’re told it’s 363,0 and36 pence and that is what it’s going to cost you
Can you get a mortgage and a deposit together for that yes or no?
And that has trickled down onto the older stock.
Trying to be clever and implement strategies from the 70s is going to lose the original poster of the house. Does she want it? Can she afford it? Those are the only questions.

Family member has just bought a premium new build, SE Home Counties. Price reduced 25k vs advertised.

My comments are about general pricing strategies and tactics. If OP wants to secure this house of course offer asking, 10k isn’t worth the risk of missing out in this case

You are one seller... not the market.

@OnTheJourneyOnwards you shouldn’t have told the EA your top budget but you know that.

I would try increasing by 5k and give a reason like you would only go to your top budget if a house was perfect and this one will need …. think of something even it’s a lie. If the garden is low maintenance maybe it’s on the small side so you could say you ideally wanted a bigger garden.

Also mention to the EA you have the option of buying your rental instead. You want the EA to fear losing the deal then they will try to convince the sellers to accept your offer.

Agreed - the market is different everywhere. We’ve always negotiated on the properties we’ve bought and had buyers do the same to us. It’s accepted practice where we live in the South East.

Agree with you.

also as that pp said, it’s a supply and demand market; then er…demand needs to be there. There will be no demand if you’re overpriced in the eyes of market and buyers.

Just this week a estate agent told me the seller would accept 15k less than it was on the market for

Well, given that the Estate Agent are meant to act for the seller, not the buyer that’s pretty Ridiculous of them, do they actually understand what their job is ?

@Noelshighflyingturds the house has been on the market over eight months and they are really keen to sell, I got the impression they would rather have it sold at that price than not sold at all

Couple of thoughts:-
Are you so sure your landlord would sell?
Renovations cost more than you think.
Rental costs will generally increase with inflation but mortgage repayments will ultimately reduce.
Expect finances to be a bit tighter in the first couple of years but it will then get easier and a lot easier.

All of which may be true in which case why haven’t they dropped the price?
But the Estate Agent still shouldn’t be in parting that information. Their job is to achieve the best possible price for the seller. It’s the seller paying them not the buyer.

This!

Get the perfect one. No brainer.

The most important thing is, is the house value for money. It’s it’s a perfect house don’t expect to get it cheap. Is it £10k of a £500k house or £10k of a £150k house. There is a huge difference.

Go for a longer mortgage which will lower the monthly costs. When you come to remortgage, shorten the term each time and you’ll get pay rises too. After about 4-5 years it won’t feel so burdensome.

Buy the house you love - you always find the money for mortgage. At least it’s not money down the drain like renting.

Offer the asking and buy the house you love.

This with bells on.

Because sellers instruct their EA.

Dropping the price means people might come in under so say they drop 10% that now becomes asking and people might then ask another 10% off which is still normal/standard which would make 20% under. Yes you can say no but some people don't like to bother, they might just stay at list and tell the EA they are willing to accept 10% under.

At 8 months getting a sale in the seller range is the goal not trying to squeeze every last penny at the risk of a sale.

Also EA don't get paid if it doesn't sell, they 'work' for their own pay check. After 8 months of work I know I would want my check. There no other job where you would expect people to do nearly a years work for before you pay them and you possibly might not even pay them.

The one you love and don’t have to do up. No contest.

You’d be mad not to go for the first house.

OP go for the one you love for all the reasons the others have said ie. You don’t know if landlord will sell , renovations are expensive and that £150 a month will be gone very quickly .

Don’t listen to the poster telling you that you should have offered asking price as that is what happens now. It might in their world but for a lot of us the reality is very different, and I have bought fairly recently as in 2 years ago and paid 10% under asking price. The housing market is not one big market and varies a lot area to area. Here anything needing work as a rule sticks as people are worried about the cost of renovation and the picture with fully renovated property is mixed with some going quickly and others sticking for no apparent reason. My mate 15 mins drive says nothing by him is going at the moment.

Nothing wrong with offering under asking price and sensible not to in my opinion . But as you know now you did make a mistake telling the agent your budget but that can’t be helped now. I think you have to decide how you feel if you lose the property. If absolutely gutted then it might be sensible to pay full asking.

Alternative is you go back and offer 5K more and say something along the lines of your mortgage broker has advised that mortgage rates are fairly fluid at the moment and that a number of lenders have been increasing rates this week and therefore would be sensible to reduce your top budget by 5k, advice you feel you need to follow hence the offer. Say that you understand that this is not what the buyer is looking for but as a first time buyer you don’t have a chain and if they accept you will work to whatever time line they require (if that is a possibfir you).

Stop messing around and offer the asking price to secure the house if you want it. 10k is a drop in the ocean over a 25 year mortgage. Good luck!