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Original poster

Anybody else LOATHE our house buying system? We are mid negotiations and it is awful...

27 replies

SamVimesIsMyHero · 14/03/2009 08:27

We have seen a house with lots of potential. The owner is a single older lady. The house needs alot of money spending on it so we reflected that in our first offer.

She rejected that offer and we asked her to give us a figure for the lowest she would accept, unfortunately it is still about £20,000 more than we want to pay. We've put in an offer £15,000 more than our first one (but still £30,000) less than her lowest acceptable figure - now we are waiting to hear back again.

The house has been on the Market for 18 months at least and she is keen to sell. The trouble is, each step everyone is saying 'that's my lowest/highest figure' and you don't know if they really mean it. ARGH I hate this!!

If you have made it this far thanks . Any opinions/experiences welcome! One question, if you were asked to give the lowest figure you would accept, would you give the real one?!

OP posts:
lalalonglegs · 14/03/2009 11:47

Oh, you haven't even had the offer accepted yet, I thought you must be complaining about conveyancing system and lack of certainty to exchange. Not sure how else you can do it unless an auction where owner puts in lowest price they could possibly accept and hopes that people will bid up against that which is basically what happens in Scotland and (during boom years at least) everyone ended up paying 25-35% above guide without knowing if they had bid £1 over the nearest bid or £100,000 over.

If she's keen to sell, she's not doing a very good job of it; house needs loads of work, been on the market 18 months... If I were keen to sell I would price realistically so, yes, I would give the correct price but lots of people do see house buying as a particularly gruelling game of chess.

All I can say is play up your positives (You are aware of the work that property needs and are still keen to proceed; you can proceed quickly - if this is the true - and so on); stick to your offer and don't back yourself into a corner and be gladitorial. Tell her/the agent: "We can only go up to £xxx. We really like the house. We are looking at others but please feel free to come back to us at any point if you/your client reconsider(s) the offer."

ABetaDad · 14/03/2009 11:53

Older sellers are stil in denial. We have run up aganst this problem on several occassions and they typically get very offended when you tell them that you will not meet their asking price.

Older sellers do not have a clue how much a house costs to renovate as they have usually not done any work for years. Part of the problem is they are looking to use the house as their retirement nest egg so accepting a lower offer from you will put a hole in their retirement plans. This is especially the case if they have already done some equity release borrowing against the house and they need to pay that back.

What I would say is that in the last 18 months house prices have fallen 25% from the peak asking price so that is the range you should be looking at.

Sorrento · 14/03/2009 17:23

You've just given away £15,000 x 3 that you'll repay in interest, you've just handed her that for nothing, find another house.

nooka · 14/03/2009 17:47

Of course not! That is a very unfair thing to ask (and expect to get a truthful answer). The price the house is on the market for is the price that they want, and someone has told them they can get. Anything below that will seem like a discount, even if their expectations are unrealistic. If you were in their shoes you would be hoping for as much as possible I'm sure, and trying to drive up the price in the same way you wish to drive it down for purchase.

I do agree that haggling is difficult though. Perhaps it is because in the UK we are not used to it? If it was more of a norm perhaps it would be easier.

Basically you have to decide how much you are prepared to pay, and how you would feel if you didn't buy the place. In order to haggle effectively you have to be prepared to walk away. So leave the offer with her and go and look at other places. Maybe she will accept, or maybe she will be hanging on for months and months to come in the hope of what she thinks it's worth. Nothing you can do about that.

Nabster · 14/03/2009 17:50

I think you should offer how much you want to pay for the house and then wait. She isn't going to tell you the lowest she will take as she will want the most she can get.

verylapsedrunner · 14/03/2009 18:53

mmm, difficult one. We are in same situation as your seller. I should state now that we are not old (well not very!) and in a time warp. However we would like to move in order to upscale but not at the expense of "giving away" our current house. It owes us nothing (no mortgage etc), your older seller may be in the same situation i.e wants to sell but has no mortgage so not "desperate"? I know that's not helpful to you but it might provide an insight to the sellers point of view. We gave our "lowest acceptable price" to our estate agent only to be under presure to lower it again, so it works both ways. I should add that at this point we may simply remove the property from the market, renovate & sit tight. I really want to move but at the end of the day we could sit tight if the market forces us.

verylapsedrunner · 14/03/2009 18:57

I should add that we are not "in denial" it's just that we have to decide at which point in the market (price) that the house is worth more to us to hang on to than to sell.

nooka · 14/03/2009 19:41

That's true for everyone isn't it? House prices have never really reflected value (ie cost) so it's a judgement call all round I think.

Tinker · 14/03/2009 19:49

"You've just given away £15,000 x 3 that you'll repay in interest, you've just handed her that for nothing, find another house."

They haven't handed the seller that though have they? They've handed the seller 15,000 plus any interest she may make

LynetteScavo · 14/03/2009 19:55

handed her £15k, but only after taking £45k away.

nooka · 14/03/2009 19:56

Well in truth they haven't handed the seller anything at all. They just might pay £15k more than they had hoped. Or not as the case may be.

lalalonglegs · 14/03/2009 19:56

Sorrento - even if she was paying 6% interest at the moment - which would not be a very competitive rate - she would only end up paying 1.5 times the amount back over 25 year life of an average mortgage. I believe that the 3 x the amount borrowed statistic was calculated in the early 1990s when interest rates were, of course, much higher. You would be unlikely to pay 3 x the amount borrowed back in interest payments unless inflation went spiralling out of control for several years.

Tinker · 14/03/2009 19:57

Yes, of course, not handed her anything at all yet.

LynetteScavo · 14/03/2009 20:22

Exactly

Sorrento · 14/03/2009 20:57

Well no because for every penny you borrow you pay back 3 in compounded interest, the day people work out how the banking system works there will be rioting in the streets.
I keep trying but you don't make it easy do you

Original poster
SamVimesIsMyHero · 14/03/2009 21:18

LOL sorrento! I have noticed you on lots if property threads and you are very aggressive - can't think of a better word - about the property market at the moment. We knew our first offer was too low so we expected to go up a bit, we have left our second offer with her to think over. I guess it's down to how much she wants to sell, she doesn't need the cash from her to be able to move apparently. I would think it's better to sell now to a good buyer (we can move quite quickly) than to wait 6 months and then sell for the same price we are offering now! Anyway I will just have to wait and see. Thanks for the replies

OP posts:
Original poster
SamVimesIsMyHero · 14/03/2009 21:26

VLR- thanks for your insight. I feel quite uncomfortable about hard negotiating with an older person on their own although I don't think our offer is unfair. I am 99% sure though that she is very keen to move, staying and renovating isn't an option. Anyway I hope you get the price you want !

OP posts:
Hatesponge · 14/03/2009 21:30

SV - I entirely sympathise, I hate the whole idea of negotiating, wish I could pay someone to do it for me....or alternatively to tell me whats the minimum the vendors will accept, so I know in advance whether or not I'm wasting my time

Hope she takes your second offer, or at least comes back with an acceptable compromise

Sorrento · 14/03/2009 21:31

I wish you luck, I'm trying to save as many of you from yourselves as possible lol
Seriously people with children need to claw something back from this market because our kids are going to be shafted, so if you can save a few grand to ease their journey then so much the better.

Sorrento · 14/03/2009 21:32

Maybe that's my next business venture, how much would you be willing to pay for somebody to do the negotiating for you ?

lalalonglegs · 14/03/2009 22:13

Sorrento - Could you please explain to me how you reached your 3x figure because I do understand compound interest and your claim doesn't add up to me. I have run the figures at 6% and, as mentioned earlier, get 1.5 x on interest-only mortgage, considerably less on a repayment one where obviously your interest payments decrease as you pay off the principal amount.

Sorrento · 14/03/2009 22:21

TBH I got the figures from my mortgage advisor, so if you say they are 1.5 then I have no reason to doubt you either, however she did also state that 75% of the mortgage business she's writing is interest only anyway.
So they are hoping inflation will erode the debt rather than paying off the principle.
Even if it's only 1.5 at the moment it's still a heck of a lot of money that needs to be given consideration too when increasing offers IMO. And interest rates are unusually low right now so I guess there's only way they are heading.

Hatesponge · 14/03/2009 22:41

sorrento - am so dreading phoning the agent i would be happy to pay someone to negotiate for me....perhaps it should be based on a percentage of the discount achieved on the sale price?! anything to avoid doing it myself.

You would never think I'd bought 2 houses prior to this (of which: 1st house got price reduced by the grand sum of £2,000. Second house - offered full asking price........this should explain how bad I am at negotiation, and why I hate it!!)

lalalonglegs · 15/03/2009 08:25

Morons Some people will hope that inflation erodes the debt but most people will be taking out an investment plan such as an endowment policy to tackle it - at the moment that could be quite a sensible thing to do as the stock market is so low and bound to pick up in the long term.

Incidentally, if you have a mortgage advisor who is giving you figures that are at least 15 years out of date, I would suggest finding a new one .

ABetaDad · 15/03/2009 08:59

Hatesponge - neogotiation over price is simple. You make an offer the buyer decides to take your offer or not. Try not to make it a personal thing. It is just a market.

The more offers you make on more properties the more you will get used to it. The thing to remember is that it is not the only house in the world and from what you say you are probably the only buyer the old lady has right now. In those circumstances there is no reason at all to raise your offer. She just has to decide whether she wants to take your offer or perhaps wait for a long time for another.

The agent here is probably worried the old lady is going to sack him/her after this long on the market if he/she does not get you to pay up.

I suggest you go and see other houses and make lots of offers so you can tell the agent that you are considering other places. That will put pressure on him/her to negotiate the old lady down on your behalf.

Good luck.

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