Calling All - What to offer on a House?
Discussion
Cut a long story short, Seen a house I really want to buy, it needs a good amount of modernisation, i.e new pluming, replacement of electrics, double glazed windows and the decor is some what 'dated'. There is a train line which runs along the back of the garden, which I’m not really bothered about, but could be used as a bargaining tool?? Its a small 2 bed semi up for 200k with some good original features, it isn’t the biggest place but a good starter home size. I was thinking take off 15% of listed price as a first offer, is this reasonable? what would you do? or what have you done in similar circumstances regarding putting in an offer.
Cheers
Cheers
I'd find out what a similar house in good condition would go for first, (not asking price, actual sale price) then calculate what the works would cost,
give yourself a 15% margin for error on the works cost and then start your offer 10%-15% below that and be prepared to move up to what you really want to pay.
eg if a house in good condition sold for £220k and the works would cost £30k, then work on around £35k which would mean the house should cost around £185k so offer around £155-£165k using the evidence of your calculations as justification. you wont get the first offer accepted but you will be starting a conversation.
This gives you a good basis for knowing whether the house is worth it to you and what you'll be prepared to go to before walking away.
Also emphasise the situation you're in, i.e. cash buyer, no chain, mortgage sorted etc and as long as you dont fall for agent doublespeak (there is ALWAYS another person looking at it that will offer more than you....oh really?) you should be fine.
give yourself a 15% margin for error on the works cost and then start your offer 10%-15% below that and be prepared to move up to what you really want to pay.
eg if a house in good condition sold for £220k and the works would cost £30k, then work on around £35k which would mean the house should cost around £185k so offer around £155-£165k using the evidence of your calculations as justification. you wont get the first offer accepted but you will be starting a conversation.
This gives you a good basis for knowing whether the house is worth it to you and what you'll be prepared to go to before walking away.
Also emphasise the situation you're in, i.e. cash buyer, no chain, mortgage sorted etc and as long as you dont fall for agent doublespeak (there is ALWAYS another person looking at it that will offer more than you....oh really?) you should be fine.
I wouldn't say the railway line was a bargaining tool at all. As, along with the extent of refurbishment needed, should have been taken into account in the valuation. That said, it doesn't necessarily mean that it has been.
I'd check the average selling prices of properties along the street / area that back onto the railway line. If they sold for £210k in the last 6-months then this property is over valued. If they sold for 300k then the value would be realistic.
All that said, a property is only worth what someone is prepared to pay.
It all depends what you're wanting to do with the property? Live in it as a home, rent it out for income, or develop it.
I'd check the average selling prices of properties along the street / area that back onto the railway line. If they sold for £210k in the last 6-months then this property is over valued. If they sold for 300k then the value would be realistic.
All that said, a property is only worth what someone is prepared to pay.
It all depends what you're wanting to do with the property? Live in it as a home, rent it out for income, or develop it.
Cut through all of that and you get two fundamental factors:
1) How much do YOU value the property at. How much will YOU make by buying it, or if you live there what is the value to you.
2) How much will THEY value the property over the cash in their hand.
All the other things like a train line, plumbing or anything else are just part of those two things. The bottom line is the only true value of the house is the one where your offer meets with their acceptance, which will have more to do with their financial situation than anything else.
Telling them about their train track has no interest to them, but if you have cash and a quick definite sale, that would certainly interest them.
1) How much do YOU value the property at. How much will YOU make by buying it, or if you live there what is the value to you.
2) How much will THEY value the property over the cash in their hand.
All the other things like a train line, plumbing or anything else are just part of those two things. The bottom line is the only true value of the house is the one where your offer meets with their acceptance, which will have more to do with their financial situation than anything else.
Telling them about their train track has no interest to them, but if you have cash and a quick definite sale, that would certainly interest them.
JustinP1 said:
Cut through all of that and you get two fundamental factors:
1) How much do YOU value the property at. How much will YOU make by buying it, or if you live there what is the value to you.
2) How much will THEY value the property over the cash in their hand.
All the other things like a train line, plumbing or anything else are just part of those two things. The bottom line is the only true value of the house is the one where your offer meets with their acceptance, which will have more to do with their financial situation than anything else.
Telling them about their train track has no interest to them, but if you have cash and a quick definite sale, that would certainly interest them.
+11) How much do YOU value the property at. How much will YOU make by buying it, or if you live there what is the value to you.
2) How much will THEY value the property over the cash in their hand.
All the other things like a train line, plumbing or anything else are just part of those two things. The bottom line is the only true value of the house is the one where your offer meets with their acceptance, which will have more to do with their financial situation than anything else.
Telling them about their train track has no interest to them, but if you have cash and a quick definite sale, that would certainly interest them.
We recently bought a property listed at 209K. We viewed several times, met with the owners, assessed their position (one month before xmas), and put together a letter directly to the owners (ignoring the agent). We simply stated that we have 155K available to buy the house, and that we would buy immediately at that price. If the price was higher, we would require a mortgage, and that if we could get one, it might take some time. Within 48 hours our offer was accepted, and contracts exchanged within a two weeks. Maybe I should have gone in lower, but as i was prepared to pay 175K, we happy with the deal.
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