A question about making an offer to buy.

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  • Logical.Lean
    started a topic A question about making an offer to buy.

    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 ?

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

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  • jpkeates
    replied
    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.

    Leave a comment:


  • JK0
    replied
    Originally posted by Logical.Lean View Post

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

    Leave a comment:


  • Logical.Lean
    replied
    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.

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  • Logical.Lean
    replied
    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.

    Leave a comment:


  • Logical.Lean
    replied
    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 ?

    Leave a comment:


  • buzzard1994
    replied
    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.

    Leave a comment:


  • BROOSE
    replied


    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

    Leave a comment:


  • JK0
    replied
    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.

    Leave a comment:

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