Haggle tips when buying

veryangryman

Hi all,

What do you think of the following idea, best given with example.

Mr X is selling his home for 250K. Mr Y wants to buy but get a good deal. so opens with a bid of 200K. Mr X rejects the offer, refusing to budge.

In your opinion, Is Mr Y now out of the running, or could he then come in with a better offer of say 230K. Or do you think that Mr X would simply poo-poo all further offers, considering Mr Y to be a time waster.

FYI: In this example, there is only one bidder

Opinions, and if applicable, your experience are both welcome!

kmick

Why 230? Why not 210? Next time you put in an offer say to the agent - look if they rejects this offer ask them what they really wants'. Then when he comes back with 245 offer 235. Tell him the offer is for 24 hours only as you have also an offer on another property. That will concentrate the sellers mind. In this game there is no losing position for you - you hold all the power. Who cares what he/she thinks. if he rejects 235 offer 237,500 and again 24 hours. What can you afford to pay?

veryangryman

Just using the figures as an example. Im not too sure what i can afford - need to get my thinking cap on

But has anyone seen someone just go "Get lost" and not have any further dealings with potential buyer, even when they up the offer

Phaetonman

Offer 240, get accepted. Then gazump them by 25k on the day you are about to sign and blame the fact somebody gazumped you in a chain.

Smoggy

Stick your offer in at 200k, wait for the EA to come back, if they say no, say you will leave the offer with them. They may come back and offer a new price - say 220k. If they don't walk away - many more houses are on offer.

The problem with your tactic is that you lose the upper hand once you have to go back to the vendor with a higher price. Try it out a few times and see what happens.

johnnyskeleton

I'd say don't bother haggling.

Say how much you want to purchase for and if they refuse walk away. Go off and make the same offer on a similar property. You can come back to the first property in 6 months if you like, and the price may have dropped.

But if you make an offer and they say no, don't come back straight away with a higher offer - that way they will take you to the cleaners and ultimately bring you up to the price they are asking for.

Senna

kmick wrote: »

Next time you put in an offer say to the agent - look if they rejects this offer ask them what they really wants'.

Dont do that! Your offer will never be accepted if your already asking how much more they want. Its a buyers market, dont rush into upping the offer.

Put your offer in, no mater how low, if its rejected, say you will have to go back to the bank. At least then if you make a second offer, it will seem like your maximun and the seller will be more likely to take it, espically if they want a quick sale.

rockbeer

veryangryman wrote: »

But has anyone seen someone just go "Get lost" and not have any further dealings with potential buyer, even when they up the offer

Sellers want to sell. In the current market a sensible seller will give serious consideration to any reasonable offer, whether they accept it or not.

Of course some people aren't sensible. Nonetheless I think you would be a bit unlucky to come across this kind of attitude unless you seriously start messing people around.

SkepticOne

veryangryman wrote: »

Mr X is selling his home for 250K. Mr Y wants to buy but get a good deal. so opens with a bid of 200K. Mr X rejects the offer, refusing to budge.

In your opinion, Is Mr Y now out of the running

No. It is Mr X, the seller, that is out of the running unless he can reduce the price sufficiently to interest Mr Y.

In the current market it is the sellers that have got to be flexible. Mr Y, the buyer, will most likely have 5 or 6 other properties he can pick from if Mr X does not budge.

The_Conductor

Phaetonman wrote: »

Offer 240, get accepted. Then gazump them by 25k on the day you are about to sign and blame the fact somebody gazumped you in a chain.

Its called gazundering- and is very poor form. In a lot of cases you may very well get away with it- as its not worth their while going to all the trouble of putting it back on the market again (keep in mind this can be months after the initial contact). If you intend to do this DO NOT MAKE YOUR SOLICITOR AWARE IN ADVANCE.......

Shane

rockbeer

smccarrick wrote: »

Its called gazundering- and is very poor form. In a lot of cases you may very well get away with it- as its not worth their while going to all the trouble of putting it back on the market again (keep in mind this can be months after the initial contact). If you intend to do this DO NOT MAKE YOUR SOLICITOR AWARE IN ADVANCE.......

Also if you intend to do this, bear in mind THEY WILL KNOW WHERE YOU LIVE.

The_Conductor

rockbeer wrote: »

Also if you intend to do this, bear in mind THEY WILL KNOW WHERE YOU LIVE.

Lol......

Phaetonman

Its called gazundering- and is very poor form.

Sorry you are correct.

What is form? Should I be worried about what state my form is in when saving 30k?

robd

Senna wrote: »

Dont do that! Your offer will never be accepted if your already asking how much more they want. Its a buyers market, dont rush into upping the offer.

Put your offer in, no mater how low, if its rejected, say you will have to go back to the bank. At least then if you make a second offer, it will seem like your maximun and the seller will be more likely to take it, espically if they want a quick sale.

That's not correct. He should ask for the buyer to suggest a price if they decline his offer. That way what the buyer wants and what the seller wants are converging. This is basic negotiation technique.

In a fair market the price would converge at the 50:50, i.e. €225k for the example given. It's a buyers market though, so with good skills below €220 should be possible. This assumes that seller is rational and actually wants to sell rather than get wait for an offer of their perceived price.

Good things to do is ask loads and loads and loads of why questions of the EA? Why? Because this gives you facts that you can negotiate with. Why is the seller selling? If you find out they bought another house and closing is dependent then you have TIME which is the biggest influencer in a negotiation. Get as much info as you can on prices for comparable properties in the area and how long the property has been on the market.

Keep your options open by considering many properties. At least 5 anyway. Take your TIME. Get everything in place on your side. Get rid of a property if you own one to remove you from a chain buying situation. Get mortgage approved. Then you can tell the EA you're mortgage approved and ready to go and not in a chain. THIS IS A BIG DEAL. Always be interested in the property you want to buy but let them know you are considering others. Don't say the property is crap or not as good as another one etc. as you'll just rub the EA the wrong way. Get the EA on your side as much as reasonably possible but always remember they work for the seller. Don't appear aggressive.

When you come to make an offer make it and leave it. I'd wouldn't be afraid to offer 80% of asking price on a property at the moment. If they say it's too low, which they nearly always do, then say well they'll have to put to the vendor. If they still come back and say no then ask that the vendor come back with a suggested price (lower than 250k). Ideally you want them to come back with a suggested price of 230k. Use the story about the bank not giving you enough money in the current market to justify lower price if you have to. Never say what your earn or what they actual max you can borrow is. Never deal with the EA or a related mortgage broker firm as gives them your info.

In the scenario you outlined you might make a further bid of 210k, then 215k then 217.5k as a final offer. You might eventually settle on 220k of 225k. Everything is open to negotiation until contracts are signed. Be careful, on making sure that curtains and fitted appliances are included if you want them.

Remember it's a buyers market and house buying is a purchase where you are not going to do business with the vendor again so you can afford to be aggressive, very aggressive in the current market. Don't fall in live with the one property or you will pay top price.

Manone

I'm curious how many people have closed out on deals at 80% below the asking that wasn't something sold off plan in desparation by property developers.

What are the precentage discounts being achieved?

johnnyskeleton

robd wrote: »

That's not correct. He should ask for the buyer to suggest a price if they decline his offer. That way what the buyer wants and what the seller wants are converging. This is basic negotiation technique.

In a fair market the price would converge at the 50:50, i.e. €225k for the example given. It's a buyers market though, so with good skills below €220 should be possible. This assumes that seller is rational and actually wants to sell rather than get wait for an offer of their perceived price.

While this is the stereotype of negotiation, I don't think it is a very good approach to take. State what you are willing to pay, and be very unwilling to budge. If you make a low offer and then ask the seller what they want, the seller knows that they can rack you up to their asking price. Don't haggle - that's what people do in French markets. Remember that most purchasors are inexperienced in negotiation and estate agents are experts, so by haggling you are playing into their hands. Instead, make an offer which you are prepared to purchase at and that is also a reasonable offer, and stick to it. If they refuse move on, or at least let them know that your offer stands for a certain period.

robd wrote: »

Good things to do is ask loads and loads and loads of why questions of the EA? Why? Because this gives you facts that you can negotiate with. Why is the seller selling? If you find out they bought another house and closing is dependent then you have TIME which is the biggest influencer in a negotiation. Get as much info as you can on prices for comparable properties in the area and how long the property has been on the market.

I'd agree with this, but you're likely to get a lot of lies re: the vendor's reasons for sale. The EA might say that they are moving up the property ladder when in reality they are selling because the bank is sending threatening letters.

The best thing about asking lots of questions is that it shows that you are interested in the property and not a time waster.

Senna

robd wrote: »

That's not correct. He should ask for the buyer to suggest a price if they decline his offer.

Why would you do that?? whats the point in putting in an offer and saying at the same time 'but we'll pay more'??

robd wrote: »

That way what the buyer wants and what the seller wants are converging. This is basic negotiation technique.

Its a buyers markets, the buyer shouldn't give a feck what the seller wants. The seller wants the asking price, but the seller will only get what someones willing to pay. Everyone who bought at the peak were getting as much money as possible squeezed out of them. The tables have turned in the favour of the buyer, so be ruthless.

JOJOC

Hi Guys

Just checking, im interested in purchasing a house but the seller is not using an EA what do you suggest I do in that case - i.e should i just put in an offer and stick to that?

Cheers

Jo King

JOJOC wrote: »

Hi Guys

Just checking, im interested in purchasing a house but the seller is not using an EA what do you suggest I do in that case - i.e should i just put in an offer and stick to that?

Cheers

Unless the asking price is very reasonable I would forget about it. You are most likely dealing with a complete idiot who will waste your time.

SparkyLarks

as a recent seller , and a buyer a bit befre that,

you ar not out of the running afte making a low offer, if you keep comming up though the seller will hang on t see if you will come up any more.

If you figure out what you can afford and what you want to pay for the house then bid that, or below.

if it is rejected asking what would the seller be willing to accept is good to see if the is possibility of movement, if ty say x is the price and that is waht we want I wouldn;t up the offer .

Iwould put in the offer, and wait till a counter is made, might not be an offer as such will probably the EA saying you come up buy another 10,000 might be able to get them to accept that

remembe the sellers bottom price will depend on their own individual circumstances and a pointed out before that is why ou need to have a few properties you are willing to bid on. One selle might be able to go lower than the rest.

robd

Senna wrote: »

Why would you do that?? whats the point in putting in an offer and saying at the same time 'but we'll pay more'??



Its a buyers markets, the buyer shouldn't give a feck what the seller wants. The seller wants the asking price, but the seller will only get what someones willing to pay. Everyone who bought at the peak were getting as much money as possible squeezed out of them. The tables have turned in the favour of the buyer, so be ruthless.

It's not about caring what the seller wants, that's not the meaning in what I said. It's about getting the seller to feel that they have done the best they can. It's basic psychology really. They won't agree to the sale if they feel it's a bad deal but they may agree if they get some upside on what they feel is a bad deal. Reality is that everyone in Ireland thinks their house is worth way more than it actually is in the current market. The buyer has the tough task of changing their herded thinking. Unfortunately, you can't buy a place if the seller doesn't agree to sell it to you.

There's a thread here http://www.boards.ie/vbulletin/showthread.php?t=2055289229 where things played out in the typical manner. In my opinion the buyer went in way to high with his first offer. He prob should have gone in at 230 (although I being aggressive would have tried around 200 (80% mark) to start with). The seller had dropped from 270 to 250. He offered 239, they said no way. He got the place for 242. His family had felt if he offered 239 he would get it for 244. Anyway he's happy, the seller is happy. Deal done.

adam.number2

robd wrote: »

There's a thread here http://www.boards.ie/vbulletin/showthread.php?t=2055289229 where things played out in the typical manner. In my opinion the buyer went in way to high with his first offer. He prob should have gone in at 230 (although I being aggressive would have tried around 200 (80% mark) to start with). The seller had dropped from 270 to 250. He offered 239, they said no way. He got the place for 242. His family had felt if he offered 239 he would get it for 244. Anyway he's happy, the seller is happy. Deal done.

While I agree with you in general, in this particular case, if the buyer had gone in with an offer of 80%, or 200, as you suggest, there is a good chance that the sellers would simply have dismissed him as a time waster and engaged no further with him. If on the small chance that they didn't dismiss him out of hand, he would have had to increase his offer by so much, that they would consider him a soft touch and he could well have ended up paying the full 250. As it played out, I'd say he handled it rather well. He got quite a sizeble discount and is happy with his new home.

BTW, I am in no way connected with any of the parties, or any vested interest.

The_Conductor

adam.number2 wrote: »

As it played out, I'd say he handled it rather well. He got quite a sizeble discount and is happy with his new home.

BTW, I am in no way connected with any of the parties, or any vested interest.

He got a 3.2% discount on the asking price. In the current market- I would have imagined a much larger discount on the asking price- you may recollect I suggested offering 215-220, with the intention of conceding up to 230 through bargaining. That would have netted the buyer another 12k- and would in my opinion have also been an acceptable outcome for the seller.

Re: you and vested interest- what connection do you have? Its just strange the way you're going on about vested interests?

adam.number2

smccarrick wrote: »

Re: you and vested interest- what connection do you have? Its just strange the way you're going on about vested interests?

Just because in the thread which was linked, the assertion was made that I was selling a house and so had some sort of an interest. I do not.

If the OP had followed your advice Shane, he would either have ended up paying 250, or not succeeded in buying his house. Surely your own experiences would show you that ;-)

JOJOC

Jo King

Am i being really naive here when i ask why you think the people that selling their house without an EA would be wasting my time - i just taught they might want to save a couple of quid ?? I am a FTB so im new to all of this!
Now I do agree with u that the house is overpriced but isnt everything in Dublin these days ??

Cheers

johnnyskeleton

adam.number2 wrote: »

If the OP had followed your advice Shane, he would either have ended up paying 250, or not succeeded in buying his house. Surely your own experiences would show you that ;-)

Or is it not possible that he would have bought it for 230k? None of us have any idea nor can we do anything other than offer our view.

johnnyskeleton

JOJOC wrote: »

Am i being really naive here when i ask why you think the people that selling their house without an EA would be wasting my time - i just taught they might want to save a couple of quid ?? I am a FTB so im new to all of this!

If they are trying to save a few quid, they are certainly not going to look at the reality of their house being overvalued or that they have to either sell at a loss or hold out in the hope that the market picks up again.

Also, if you start off looking for a dramatic reduction in the price, an estate agent will look at that professionally and coldly, while a person selling their own home might take it personally.