FTB Property Offer.......help!!

[frizz2kuk]

Hi everyone,

I am looking for some advice on buying my very first property.
Myself and my partner have saved up and have a nice sized deposit available, we are in rented accom with a rolling contract so only need a months notice and we have an agreement in principle from our mortgage provider (we just need to do the application)
Anyway, we have looked at a few 3 bedroom properties recently all in the same price range, from about £140000-£145000. This seems to be the average price of what we are hoping to get.
We then saw a property that was on the market for offers over £139950. We really liked the property as unlike the others we had seen, it had partially converted the garage into an office which means we wouldn't have to use a bedroom as an office, leaving us with 3 bedrooms as bedrooms. All the others we had seen did not have this so are essentially 2 bedrooms for us.
We made an offer this morning at £132000 to test the water and give some negotiation room. We knew this would be declined but were prepared for that. They rejected it not long after saying it was much lower than they hoped.
Then later this afternoon after much discussion and thought we went up to £135000.
The estate agent seemed very happy that this was a price that would enable them to get the house they were looking at.
About an hour later the agent called back with bad news. The property that the sellers were looking to put an offer on had had an offer accepted this morning. To outbid the other buyers they would need us to pay £139950.
We think that the property is worth this much but we don't feel like we should be doing all the compromising and the sellers should be giving a bit too.
We also don't want to end up in a situation where we are funding their bidding war.
Are we getting into a dangerous situation where we are unlikely to get this property?
Should we wait a while before making another offer?
Should we make an offer tomorrow of £138000 saying that this is pushing our budget? Then if they refuse that say we need to go away and look at other properties and also our finances to re-evaluate our position?

My partners parents think we are moving to quickly but we really like the property and will still have plenty of savings to make changes. Also we haven't seen anything else for less than this that comes close. All others that are £140-145000 seem much smaller.
Are we just not offering the full amount because we want to feel like we have got a bargain?

Any help would be great.
Thanks

[Dougie_tps]

Hi

I agree with you that you shouldn't really be doing all the compromising, it is (as I'm sure you're aware) after all a buyers market. How much do you really want this house? If you paid full asking price, would you regret it afterwards? Negotiation is about trying to satisfy both parties, so if you are driven to paying full price is there anything you could ask them to leave in the house for you (carpets and curtains)?

There isn't a magic formula for property valuation, it's an art not a science. So one valuers opinion might be different to another's. It's not a crime to purchase a property at full (or close to full) price but it's all about what YOU are willing to pay for it.

[The Hooded Claw]

The above poster is correct, how bad do you want the house?

The extra money may amount to an extra £30 p/m on your mortgage

A house is indeed only worth what you are willing to pay

Good Luck

THC

[frizz2kuk]

Thanks for the advice, it has helped me to really evaluate what we are prepared to do for the house.
We have spent a lot of time chatting and trying to decide what we think is best to do. I have spent some time looking at other houses that are out there and nothing comes close.
After a lot of thought we are thinking of offering £138000 and saying that is our final offer. If they can't give a little bit then they must be pushing their own budget too much.
Hopefully this will allow them to make an offer on the property they want but I have a feeling that they will get outbid anyway and we will be left without the house.
I think I would rather make a final offer and then let fate decide.

Thanks again

[Dougie_tps]

A little trick to make sure the other party fully understands that you are making a final offer is to put forward an irregular figure. For example, this might be £137,850 or £138,200, obviously the figure is your decision alone to make. It might not actually be the absolute maximum you can stretch to, but it gives the other party the impression that it is.

[Dan S]

Hi Frizz2kuk

It sounds like you're in a very frustrating situation. There's an exciting and dull version of the answer to your question...

Alright, the exciting one first! Do whatever it takes to buy it if this truly is the property of your dreams. Being pushed up in price is always frustrating, but you'll always regret it if you don't end up living there. That's not to say you should live outside your budget, but definitely don't worry about the extra amount. In a sellers market you'd be competing with far more than just one other party.

Ok, now to the boring answer! Forget about this one and move on. If you enter a bidding war and let emotion take over, you could end up paying way more than you need to.

What's the right answer? Well, that boils down to one thing...how long have you been looking? If it's not very long then im afraid your partner's parents are right...you're jumping in a little soon. You need to get a real idea of what constitutes value for money in the area you're looking in.

In terms of negotiations, take a look at 'THE ART OF NEGOTIATING: MAKING AN OFFER' section of our Property Hunting Section to get some extra ideas and tips.

I hope everything works out for you in the end.

All the best

Dan S

[juliettelixora]

both parties should agree on the terms that no one will be on the downside. Since practically no one want's to be in a place of a bad negotiation and end up having the unfair decision. Take time to deal and keep in touch with each other.

[kaminikethi1]

Welcome to the rollercoaster of house buying Now hold on tight, and don't panic. If you haven't already done so, contact your solicitor and let them know the details of the property and the estate agent who will be contacting them. The estate agent will have asked you for the details of your solicitor, if they have not already done so.

[New Homes Expert]

You must have thought the house was worth the money when you went to see it.
You are looking for a bargain and could end up losing the home.
Offer the asking price and not a penny more.
The vendors said "offers over £139,950 so you had a cheek offering £132,000 in the first place.

At under £140,000 many many FTB will be able to afford it and if I was the vendor I wouldnt let you have now at any price.

[Dougie_tps]

Originally Posted by New Homes Expert

At under £140,000 many many FTB will be able to afford it and if I was the vendor I wouldnt let you have now at any price.

Not necessarily, it depends on the local market in general doesn't it? £140,000 might be beyond the means of many FTBs in that particular area. Plus, for the vendor to intentionally NOT sell to Frizz2kuk would be cutting off their nose to spite their face in the current climate. Just my opinion...