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Topic: Negotiating house prices  (Read 2804 times)

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Re: Negotiating house prices
« Reply #15 on: March 21, 2018, 02:17:33 PM »
Thanks for the points everyone, let me address some of them.

The fact that the building is listed is an issue but not too big a concern TBH. Grade II means we need approval for any external changes, but can change things inside if we want. The house was recently renovated, and both the outside and inside are in quite good condition, though there are some cosmetic changes I'd ultimately like to make on the inside. It doesn't share anything with the building next to it except a wall and the cellar, which is where we might have an issue. The house's part of the cellar is separated from a part that belongs to one of the flats only by what appears to be a wooden pallet on its side. Husband thinks that putting a more permanent barrier in might be problematic, but honestly I don't think that's pressing issue because the rest of the cellar is fine even with the temporary barrier.

It's currently a leasehold, but is being converted to a freehold. We would be buying the freehold. Zoopla estimates prices in that area anywhere from 158,000 to 210,000. I am scared of insulting the seller by going in too low, but realistically we couldn't manage more than 180,000, and that would be a stretch.

The mortgage is a concern. We should be able to come up with a deposit of 15%, though we might be able to scrape up 20%, which would get far better interest rates. But we need to talk to my in-laws to see how much they can help us out and we haven't had a chance to do that yet. We'll see them on Friday. Is it better to talk to a mortgage adviser or go straight to a bank? @jimbocz who is John Charcol?

We're currently renting so have no chain, and the seller has already found a place to move, so hopefully will be open to offers, but again I don't want to go too low and put him off. What do you guys think? Is 165,000 a reasonable place to start if we hope to end up at 175,000 or thereabouts?

On s'envolera du même quai
Les yeux dans les mêmes reflets,
Pour cette vie et celle d'après
Tu seras mon unique projet.

Je t'aimais, je t'aime, et je t'aimerai.

--Francis Cabrel


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Re: Negotiating house prices
« Reply #16 on: March 21, 2018, 02:32:29 PM »
https://www.charcol.co.uk/

It's just a company of mortgage advisors that will come to your house and sell you an expensive mortgage.  Might be handy because they will answer every question you have and may scramble to get something going quick. 
You can talk to your bank as well.  Pay attention to how the mortgage advisor gets paid and how much of the market he can offer you.  Some only sell special mortgages that pay them a commission.  Welcome to dodgy rip off land.


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Re: Negotiating house prices
« Reply #17 on: March 21, 2018, 02:34:03 PM »
I would speak with a mortgage broker in your area.  The lender will cover the fee - not you.  They'll be able to look at your full financial picture and find the best product for you.  They'll likely give you several options to look at.

Things to consider are:
How long do you want your fixed term to last?
Are you okay with a prepayment penalty (during the fixed period)?

Personally, I would highly recommend that you NOT consider interest only repayments, which some will still offer. 

I would start at £165k.  Ask the agent to explain that you are first time buyers with no chain, that you love the home and want to live there for a long time, but that your budget doesn't afford you to bid any higher, blah blah blah.   

But this is SOOO easy for me to say sitting behind my keyboard and not having a vested interest in the house.  You and your partner need to feel comfortable in whatever you decide!!


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Re: Negotiating house prices
« Reply #18 on: March 21, 2018, 02:34:27 PM »
I'd put off making an offer until you get a mortgage.  You won't be taken seriously otherwise.


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Re: Negotiating house prices
« Reply #19 on: March 21, 2018, 02:34:50 PM »
I am scared of insulting the seller by going in too low, but realistically we couldn't manage more than 180,000, and that would be a stretch.

{snip}

We're currently renting so have no chain, and the seller has already found a place to move, so hopefully will be open to offers, but again I don't want to go too low and put him off. What do you guys think? Is 165,000 a reasonable place to start if we hope to end up at 175,000 or thereabouts?

I wouldn't worry too much about insulting the seller. I think it's pretty rare for someone to say, "Not only is that not enough money, but I'm so upset that even if you now offer me the asking price I will say no out of principle!"

I think your idea of starting at 165 hoping to get to 175 max is a good one.


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Re: Negotiating house prices
« Reply #20 on: March 21, 2018, 02:37:17 PM »
If you've never looked into a mortgage, how do you know you can afford 175?  You may be able to get a lot more or a lot less.


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Re: Negotiating house prices
« Reply #21 on: March 21, 2018, 02:40:09 PM »
It's been a while, but I think a mortgage company will typically issue a letter with a general guidance that they have talked to you and you should get a mortgage for x amount unless something crazy happens.  You show that when you make an offer to be taken seriously.


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Re: Negotiating house prices
« Reply #22 on: March 21, 2018, 02:43:43 PM »
I would speak with a mortgage broker in your area.  The lender will cover the fee - not you.

What if we don't end up getting a mortgage, though? Would we have to pay the broker's fee then?

If you've never looked into a mortgage, how do you know you can afford 175?  You may be able to get a lot more or a lot less.

We've done a lot of mortgage calculators and comparisons online, we just haven't spoken to anyone. They've estimated we could borrow 180-190k. With a 20% deposit, the payments would be around what we're paying now in rent.

Obviously, we're going at this all wrong, because we hadn't been planning to buy anything and only started seriously considering it because this is the only place we've seen that's big enough to suit us but also reasonably affordable. I'm not sure when we'll be able to speak to someone about the mortgage.

Also, does it matter that the listing says "offers over 175,000"? We'd still be ok offering less than that?
On s'envolera du même quai
Les yeux dans les mêmes reflets,
Pour cette vie et celle d'après
Tu seras mon unique projet.

Je t'aimais, je t'aime, et je t'aimerai.

--Francis Cabrel


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Re: Negotiating house prices
« Reply #23 on: March 21, 2018, 02:52:52 PM »
What if we don't end up getting a mortgage, though? Would we have to pay the broker's fee then?

We've done a lot of mortgage calculators and comparisons online, we just haven't spoken to anyone. They've estimated we could borrow 180-190k. With a 20% deposit, the payments would be around what we're paying now in rent.

Obviously, we're going at this all wrong, because we hadn't been planning to buy anything and only started seriously considering it because this is the only place we've seen that's big enough to suit us but also reasonably affordable. I'm not sure when we'll be able to speak to someone about the mortgage.

Also, does it matter that the listing says "offers over 175,000"? We'd still be ok offering less than that?

No, you are not responsible for the fee.  They don't get paid unless the mortgage happens.  It's a risk they take as the fee from the mortgage company is usually quite good (about £1,000).  They will inevitably have some sales that fall through and have assumed that risk.

I literally only have one example but a friend just purchased a home in Scotland in January and she paid less than the "offers over" number.  Hopefully phatbeetle will chime in soon and let us know if her experience has been any different.  It may be that the home was bought by an investor and they renovated and they aren't going to entertain any offers below their £175k list...  but they'll tell you that.  They aren't going to just ghost on you.  :)  Basically, you don't know until you try.


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Re: Negotiating house prices
« Reply #24 on: March 21, 2018, 04:11:04 PM »
No, you are not responsible for the fee.  They don't get paid unless the mortgage happens.  It's a risk they take as the fee from the mortgage company is usually quite good (about £1,000).  They will inevitably have some sales that fall through and have assumed that risk.

So does that mean that they act as a sort of advocate? If so it seems better to go to them than direct to a bank.
On s'envolera du même quai
Les yeux dans les mêmes reflets,
Pour cette vie et celle d'après
Tu seras mon unique projet.

Je t'aimais, je t'aime, et je t'aimerai.

--Francis Cabrel


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Re: Negotiating house prices
« Reply #25 on: March 21, 2018, 04:15:02 PM »
So does that mean that they act as a sort of advocate? If so it seems better to go to them than direct to a bank.

Exactly.  I honestly don't know why anyone would choose NOT to work with a broker (unless they were able to get a better rate directly, but I suspect this would rarely happen).  Basically they are a personal shopper - they shop around for you!


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Re: Negotiating house prices
« Reply #26 on: March 21, 2018, 04:17:44 PM »
What that means is that they get paid by convincing you to take out the mortgage that gives them the most commission.  Even if it's not the best deal for you.
I  believe there are mortgage brokers that will find the best deal for you because they work for you.  You have to pay them when you take a mortgage they recommend


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Re: Negotiating house prices
« Reply #27 on: March 21, 2018, 04:23:27 PM »
It's been a while since I've been involved with choosing a mortgage so I'll defer to KFDANCER.  No matter what Historyenne, do your homework.  Whenever there's tens of thousands of pounds flying around being spent by the inexperienced, be sure that the vultures will be circling to rip you off in perfectly legal ways.

BTW, how much will it cost to buy that freehold?  Can't be cheap.


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Re: Negotiating house prices
« Reply #28 on: March 21, 2018, 04:25:14 PM »
What that means is that they get paid by convincing you to take out the mortgage that gives them the most commission.  Even if it's not the best deal for you.
I  believe there are mortgage brokers that will find the best deal for you because they work for you.  You have to pay them when you take a mortgage they recommend

This has NOT been my experience.  My broker has found me much better products than Google ever could.   :D  And I did not pay her out of my pocket.


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Re: Negotiating house prices
« Reply #29 on: March 21, 2018, 04:30:25 PM »
And I did not pay her DIRECTLY and TRANSPARENTLY out of my pocket.
FTFY
Your broker is not mother Theresa, you are paying her. You just don't know how much.


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