A question about making an offer to buy.

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    A question about making an offer to buy.

    So tomorrow, my wife and I are viewing an 1950s ex-council 3 bed end terrace, that is actually 2 doors from our first BTL (around the corner) with a view to this being our second BTL. The difference compared to all the others that we have seen, is that this is advertised by an agent in the next town, and this viewing is with the vendor.

    I'm inclined to believe that it's a touch overpriced, (based on what's sold nearby recently, and how much work they needed, but also what hasn't sold, and why) but as a long term investment it would still work at the asking price.

    My wife thinks a bit more short term and thinks house prices and rents will both drop when Brexit kicks in. Given that it's been on the market just over a week, I'd imagine that they are not likely to be open to move far yet.

    Now I'd quite like to suggest a price after the viewing to the vendor, and explain my reasoning. But if I put myself in the vendor's shoes the whole thing is irrelevant.

    What's relevant is that we have a mortgage approved in principle, and we have no chain, so it all depends on how quickly and without hassle they need / want to sell.

    What's also relevant is that all the other properties we've viewed would need some work before they could be let out and looking at the pictures this is good to go (doesn't always pan out like the pictures - what software do agents use to remove the "detritus" ?)

    Anyway, thoughts as to the best way to approach it?

    Am I over thinking again ?

    #2
    I think it's a mistake to buy rentals too close together. Tenants will inevitably cotton on.

    Suppose you get £700 pcm in rent for your new place, then your other one falls vacant. Due to the market & time of year, you can only get £650.

    Tenant in your new place will feel aggrieved at paying £50 more than his neighbour, and it will ruin your relationship.

    Comment


      #3


      my approach would be go and view and discuss as little as possible with the vendor, wait til the estate agent calls you for feedback and tell them youll get back to them as youre working the numbers out on all the properties youve viewed, call them back next day with an offer around 10% under asking price and advise that youre a cash buyer and are purchasing within the next week so could they put offer to vendor and get back to you

      if they knock you back you can always increase your offer, i tend not to, i believe a cash buyer is worth at least a 10% discount on someone who has to sell a property and/or has to arrange a mortgage

      the other consideration however is that you may be happy with the cost of your mortgage v the rent chargeable in which case paying a slight premium on a property thats ready to go wouldnt be catastrophic, also are there plenty of other properties to choose from, my policy of bidding low works as theres plenty to choose from, if it was a one off id be more inclined to offer 5% under with a view to paying asking price if the vendor didnt accept

      good luck

      Comment


        #4
        Depends on where it is and what the market is like - take a look at other properties in the area and whether they are selling quickly or not. London prices for council flats have dropped a lot, houses less so. Brexit will affect some areas more, and sooner, than others but is probably discouraging many purchases right now.

        So I'd offer 10% less and say the offer is open for 7 days or less if I find another property. Definitely go through the agent, they want their cut and 10% less makes little difference to that. It may be too early but you can always go up a bit later if you want.

        Comment


          #5
          Originally posted by JK0 View Post
          I think it's a mistake to buy rentals too close together. Tenants will inevitably cotton on.

          Suppose you get £700 pcm in rent for your new place, then your other one falls vacant. Due to the market & time of year, you can only get £650.

          Tenant in your new place will feel aggrieved at paying £50 more than his neighbour, and it will ruin your relationship.
          That's interesting. You have experience of that ?

          Comment


            #6
            Originally posted by buzzard1994 View Post
            Depends on where it is and what the market is like - take a look at other properties in the area and whether they are selling quickly or not. London prices for council flats have dropped a lot, houses less so. Brexit will affect some areas more, and sooner, than others but is probably discouraging many purchases right now.

            So I'd offer 10% less and say the offer is open for 7 days or less if I find another property. Definitely go through the agent, they want their cut and 10% less makes little difference to that. It may be too early but you can always go up a bit later if you want.
            That's interesting.

            On the face of it we have set ourselves an impossible task. There's 1000 plus 3 bed houses within 10 miles in our price range, but we are focused on 2/3rds of L23, and 1/3 of L22. Which limits what comes up. It also limits the return on investment.

            Comment


              #7
              Originally posted by BROOSE View Post

              my approach would be go and view and discuss as little as possible with the vendor, wait til the estate agent calls you for feedback and tell them youll get back to them as youre working the numbers out on all the properties youve viewed, call them back next day with an offer around 10% under asking price and advise that youre a cash buyer and are purchasing within the next week so could they put offer to vendor and get back to you

              if they knock you back you can always increase your offer, i tend not to, i believe a cash buyer is worth at least a 10% discount on someone who has to sell a property and/or has to arrange a mortgage

              the other consideration however is that you may be happy with the cost of your mortgage v the rent chargeable in which case paying a slight premium on a property thats ready to go wouldnt be catastrophic, also are there plenty of other properties to choose from, my policy of bidding low works as theres plenty to choose from, if it was a one off id be more inclined to offer 5% under with a view to paying asking price if the vendor didnt accept

              good luck
              Unfortunately NOT a cash buyer but have got a Decision in principle from the lender on the other property.

              Comment


                #8
                Originally posted by Logical.Lean View Post

                That's interesting. You have experience of that ?
                Yeah. A long time ago.

                Comment


                  #9
                  Originally posted by Logical.Lean View Post
                  Unfortunately NOT a cash buyer but have got a Decision in principle from the lender on the other property.
                  I'd still tell them you are a BTL buyer with no chain.
                  The mortgage approval decision will take less time than the searches anyway.

                  For most sellers (i.e. anyone who's ever sold a property previously) no chain and a funded buyer is pretty appealing.
                  If you're extra lucky and the property being sold is part of a deceased person's estate or the seller has found their next property it's almost too good to be true for them.
                  They almost expect the price to be lower because the other upsides are so good.

                  Tell them you''ll complete as fast as their conveyancer will allow.
                  When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                  Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                  Comment


                    #10
                    sorry for the confusion, jpkeates sums it up succinctly , i would view your position as on par with a cash buyer

                    Comment

                    Latest Activity

                    Collapse

                    • Reply to SDLT and purchase reservation fees
                      by combo75
                      I don't know, my head is spinning.

                      I have just been to look at a 4 bed Student let terraced house, currently let out £1850pcm.

                      The current landlord is diabolical and the students are complaining about the state of the place. It needs quite a bit of updating but it's not a...
                      02-07-2020, 18:27 PM
                    • SDLT and purchase reservation fees
                      by ritfor
                      Hello folks,

                      For second homes:

                      Purchasing a property for 33k. Reservation fee 6k. Total 39k = No SDLT.
                      Purchasing a property for 35k. Reservation fee 6k. Total 41k = 3% SDLT.

                      This is correct isn't it?

                      Thanks.
                      20-06-2020, 12:03 PM
                    • Reply to SDLT and purchase reservation fees
                      by BTL investor
                      You could be right, the truth is that nobody knows what’s going to happen that’s why the experts are predicting different outcomes but I struggle to see how me purchasing a property today for £200,000 with £7,500 of stamp duty and receiving a pre-tax and pre-expenses rental income of around £10,000...
                      02-07-2020, 11:41 AM
                    • Reply to SDLT and purchase reservation fees
                      by BTL investor
                      combo75 I don’t see the attack on landlords coming to an end anytime soon, both labour and conservative governments have spent the last 3 or 4 decades funding free homes to asylum seekers, single mothers and pretty much anyone that doesn’t want to go to work to buy their own home or pay their own...
                      02-07-2020, 11:11 AM
                    • Renovation Loan for a Right To Manage Company
                      by AlleyRTM
                      Hello,

                      I am a director of a Right To manage company, and we need extensive renovations to our roof, and other parts of the building.

                      Does anyone know of a way to gather the funds to pay for this, like a loan or grant?

                      Is it possible for an RTM company to take...
                      30-06-2020, 04:39 AM
                    • Reply to Renovation Loan for a Right To Manage Company
                      by loanarranger
                      Good point hech123, I would add that even if a bank were prepared to lend as unlikely as it is , why on earth would the Directors be prepared to give their Personal Guarantees forsuch borrowings. I fear that the liability rests in seeking a surcharge for the respective leaseholders to fund the costs...
                      02-07-2020, 09:32 AM
                    • Reply to Renovation Loan for a Right To Manage Company
                      by hech123
                      I would imagine not. You should get it from the leaseholders, it is there responsibility. You may get a loan at high rates if there is any value in the Freehold if you own that but if you are just a RTM company with no assets then getting a loan would be extremely difficult . Really you should have...
                      02-07-2020, 08:37 AM
                    • Reply to SDLT and purchase reservation fees
                      by hech123
                      I very much doubt the market is going to have a correction downwards, I am really not even sure why any experts are predicting this. Large house price falls usually fall exponential growth in houses making them very unaffordable. Add to this that banks are well capitalised and looking to expand lending....
                      02-07-2020, 08:32 AM
                    • Reply to SDLT and purchase reservation fees
                      by combo75
                      Hi BTL, I am in the same position as you and I am sitting on quite a bit of money for deposits. But I am not willing to pay £16-22K in SDLT towards buying a property.

                      I have noticed that a lot of property seen in my area is coming down but not by enough.The furlough scheme is keeping...
                      02-07-2020, 08:25 AM
                    • Reply to SDLT and purchase reservation fees
                      by ritfor
                      Apologies Gordon, I should have said that the property would be in need of refurbishment....
                      01-07-2020, 17:31 PM
                    Working...
                    X