Buying a place

[BoredBloke]

As a rough guide, how much under the asking price is generally the norm when it comes to making an offer?

I know there are a multitude of factors, but as a rule of thumb would you say 5%, 10%??

[Lockhouse]

As a rough guide, how much under the asking price is generally the norm when it comes to making an offer?

I know there are a multitude of factors, but as a rule of thumb would you say 5%, 10%??

Depends on the property. Decide what it's worth to you, offer below that until either they say yes or you reach the maximum you're prepared to offer.

Researching actual selling prices for nearby properties always helps.

[rambaugh]

As a rough guide, how much under the asking price is generally the norm when it comes to making an offer?

I know there are a multitude of factors, but as a rule of thumb would you say 5%, 10%??

Probably 30% as a rough guide. Remember once you make an initial offer it will represent your floor price (in other words it will be difficult to go down from that price). So my advice would be to give yourself a lot of room to negotiate.

[BoredBloke]

I'm looking to buy a place down near Canary Wharf. I'm sick of hotels and the costs of renting means that I'd hand over £15k for a year to a landlord. I've seen places advertised in Greenwich Millennium Village that are up for £240k for a 1 bed flat. We have about £150k of equity in our house and its on a tracker at 0.5% above the base rate on a flexible mortgage. I figured I could wip £50k out of it and still keep a healthy loan to value ratio and use 45k as a deposit and 5k to furnish it. Then when I don't need it I'd rent it out!

[rootsnall]

Depends if your seeking the dream home or just any old pad. If you aren't that fussy then look for empty properties and even better an empty repossesion, and even better still an empty repossession that has been knocking around for a few months. Then you think of a cheeky figure that won't hopefully make them laugh and then knock a few grand of that. You'll get rejected but then sit and wait and hopefully they'll come back. At the other extreme and its a high demand property in a decent market then you are stuffed.

[BoredBloke]

Didn't think of that. Do you know of any sites that deal with repo houses?

[Lockhouse]

I'm looking to buy a place down near Canary Wharf. I'm sick of hotels and the costs of renting means that I'd hand over £15k for a year to a landlord. I've seen places advertised in Greenwich Millennium Village that are up for £240k for a 1 bed flat. We have about £150k of equity in our house and its on a tracker at 0.5% above the base rate on a flexible mortgage. I figured I could wip £50k out of it and still keep a healthy loan to value ratio and use 45k as a deposit and 5k to furnish it. Then when I don't need it I'd rent it out!

IMVHO that's too low a deposit for a BTL mortgage\second property (assuming 50K on a 240k property). If you can get finance you'll get shafted for interest rates.

[northernladuk]

The agent we took on advised we advertise at 10% more if we can wait but we cut down to the next level below on the price ranges on Rightmove so about 8%.

His comments were the people think it is a buyers market with all this doom and gloom so buys are looking for discounts thinking sellers are desperate. The reality is that all the sellers are sticking 10% on to give the buyer his bargain and the world carries on happy. No one will offer asking price at the moment so bump it up.

Funny thing is that we put an offer in a property from the same agent that had a lot of interest and so on but taking what the agent said to us about our house we put in 15% less, after a quick chat vendor accepted 10% less.... the amount the agent told us to put on Not much of a bargain but was nice to know what was happening rather than falling for the usual sob stories.

[Martin@AS Financial]

I'm looking to buy a place down near Canary Wharf. I'm sick of hotels and the costs of renting means that I'd hand over £15k for a year to a landlord. I've seen places advertised in Greenwich Millennium Village that are up for £240k for a 1 bed flat. We have about £150k of equity in our house and its on a tracker at 0.5% above the base rate on a flexible mortgage. I figured I could wip £50k out of it and still keep a healthy loan to value ratio and use 45k as a deposit and 5k to furnish it. Then when I don't need it I'd rent it out!

I believe Greenwich Millenium Village is a new development. If so, this can work to your benefit. Developers often need to sell their existing stock before they can move on to their next project therefore, they should be willing to listen to offers. When working out your affordability, take into account the service charge as this can be quite high. New build however is often difficult to to gauge a price on but try using websites such as mouseprice to do your research on the sold prices of similar properties in the area.

From a mortgage point of view, lenders are still nervous of new build therefore many restrict the loan to value. Realistically, you will need a minimum of 20% deposit to make the purchase as a 2nd home.

[BoredBloke]

IMVHO that's too low a deposit for a BTL mortgage\second property (assuming 50K on a 240k property). If you can get finance you'll get shafted for interest rates.

Agreed if the purchase price is 240, but if you get 10% knocked off, then 240 becomes 216. If I put 45k down that means I'd owe 171 or 79% of the total cost. If I could get more knocked off then this value improves.

Our house is currently tracking at .99% Its worth about £250k and we owe 100k. Its a flexible mortgange meaning that we are supposed to be able to take money out against the house if we want and the tracker percentage (+.50%) is a lifetime one.

I'd take more out of our house but the wife is not keen