Tips for Buying house

Fondu

Hu Guys,

I just viewed a house last Friday( i had to ring him three times to get a viewing as he kept saying he would call me back)

The asking price is 135k.
The House has been on sale for only 2 weeks.
He told me he has an offer of 108k cash.

I like the house and would like to put in a bid but i want to try and get it for the best value possible.
How much do you think i should offer?
Should i wait a few days to put in the offer?
Should i not tell him i would be offering a cash offer as that may well lead to me paying more than id have to?
My intention is to let out the house(its already let at the moment). Should i hold that info back as well?

Its my first time trying to purchase a house and i know im not giving you a lot of info but any ideas would be much appreciated.

johndaman66

I think we really need more info before we can help you and ideally a link, as otherwise we are very much in the dark.

You say the house is currently rented out. Do you know what it is being let for and have you worked out the yield at €135k or indeed any price you may be willing to settle on. Don't just take the Estate Agents word for it on the rental figure as Estate Agents are known to be well, liberal with the truth to say the least. I'd suggest you look at other house up for rent in the area on daft or local newspaper. If the rent is way out of kilt with figure EA mentioned you can probably guess they're telling porkies.

I really don't think it makes too much odds on whether you put offer in a few hours after or a few days after viewing the house. I think the main thing is that you stand firm by your offer. Be willing to bargain up to the final price you have set in your mind but don't get too emotional about the whole thing and go over that price. Only perhaps where the vendor sweetens the deal and throws appliances and some furniture in for example which may not have previously being included. Of course it goes without saying that you should not pay over the odds of what they are worth. Main point it don't show the EA that you are overly enthusiastic about it. Be clinical, business like and remain corteous throughout but know when to walk also.

Fondu wrote: »

Should i not tell him i would be offering a cash offer as that may well lead to me paying more than id have to?

Ok, I really don't like this expression at all. I automatically envisage somebody walking around with a big bag of cash trying to buy a house for some reason:) which we know does not happen in reality unless your part of a certain community of course. In the sense you mention your ultimately going to pay cash for the house anyway which is the reason I don't like the expression, just not cold hard cash. I'm sure it'll ultimately be by means of bank transfer or cheque.

What I assume you are getting at is that you will be ready to move straight away and are not in a chain to sell another house first and don't have to go through the rigors of a mortgage application process. Although not always it is broadly speaking its generally accepted that the vendor may settle for a bit less if this is the case, in this country anyway. A bird in the hand is worth 2 in the bush and all that... Might not be the case here though if landlord already has sitting tenants in the house and has rental income from them. Not sure if its intended that you would keep the same tenants but if not he may have to give them notice of the pending sale and when the property is expected to change hands, when they need to be out by etc.

Finally I believe you will have to register as a Landlord and may be liable to income tax on the rental income. You would need a certain float set aside for if and when things such as boilers/ washing machines/ cookers etc. break down. Its not like you could put these things on the long finger as you might in your own house. I'm sure you have already considered this though.

Hope my post helps even a small bit:)

Fondu

Thanks for the comment Johndaman.

The asking is 135 and i have a figure in my mind that would be a fair price for the property. I think the rental rates in the area are between 900-1000 and i would have an idea of what costs i have to include every year.

I wouldnt mind keeping the tenants as a i had a quick chat with them and think they would be honest hard working people. The EA mentioned the furniture could be included at an extra cost, however id nearly prefer to buy all my furniture so i can modernize it for future letting. If it comes free, fair enough, id keep it but i would pay anything for most the stuff.

Im Thinking of putting an offer of 109k on Tuesday and see what happens.
I was reading that giving odd numbers like 109.250 etc can put the EA off a bit but ill keep it standard for my initial offer.

mari2222

The EA is just a messenger between you and the seller, but paid by the seller. Point 1: Make your offer and ask him to let you know by "Friday" or whatever day suits you. When he rings to say its rejected, say, thanks v much, i will think about that and hang up. if you decide the next day to up your offer goto Point 1. Dont chit-chat the EA; it is just a business deal.

TheDriver

I have also noted that any house on the market for anything more than 1 second has an "offer" on it. I think sometimes its the EA putting down a marker of how low you should bid. I have found that a comment like "oh well, I was going to start a bit lower than that" can suddenly have then saying put in an offer anyways!! Its all a game and don't let them use you as a bidding war.

TheDriver

Fondu wrote: »

Hu Guys,

.
He told me he has an offer of 108k cash.

P.S. EA needs to tell those people if 108 is accepted or not. I hate EAs using offers to generate other offers......

limnam

Try and do some of your own investigations. Can you call into a neighbor of the house and see if they know how long it's been for sale for?

maybe you can find that out using tools like property bee to see what price it started out at. Do not get into a bidding war. give the EA your bid and walk away.

Fondu

Just to give you an update lads. I put in an offer of 109 on Tuesday. EA left a voicemail on my phone that the bidding currently stands at 112. What do ye think i should do lads?

delthedriver

Fondu wrote: »

Just to give you an update lads. I put in an offer of 109 on Tuesday. EA left a voicemail on my phone that the bidding currently stands at 112. What do ye think i should do lads?

Are there any other houses for sale in the area? I think the EA is playing a game
With you. Is there anything special about this particular house ?Are there really other bidders ? Do you believe the EA?

dtipp

Fondu wrote: »

Just to give you an update lads. I put in an offer of 109 on Tuesday. EA left a voicemail on my phone that the bidding currently stands at 112. What do ye think i should do lads?

Completely depends on whether you are prepared to simply walk away from the property or not.

There's a chance the EA is just playing games - but it's impossible to tell for sure.

When I bought my house (years ago), I put an offer on the house that was 16,000 less than what I was told the bid stood at. And I said I wanted every stick of furniture in the house. The EA rang several times to try and negotiate, I said no way, and the offer stood until Friday at 3pm. They then rang and said they'd take the offer, but no furniture as it was already sold. I said no way. They rang at 3pm on Friday and said they'd take the offer.

The thing was . . . I was fully prepared to walk away. It was a lovely house but I wanted a bargain (at least, it was a bargain back then!).

You have to ask yourself, can you do the same.
If you can, tell the EA the offer of 109 is your final offer and give him a reasonable date (less than a week is fine) for the seller to make up their mind.

Best of luck.

limnam

I would advise the EA you have found another house that you're very interesed in and need to move very quickly on.

Advise him your offer of 109 stands for 10 working days and advise him you will be notifying the owner of the house of the same offer in-case he's been clever they won't to lose out either.

I would follow through with that with a registered letter to the owner of the address, again you could find out from a local their name and write it directly to them notifying them of the offer made.

Do your best to find out when this came on the market and at what price.

Galego

Would an EA be so stupid to put off a potential buyer for the sick of 10 eur (or little more)?

With these small figures and the fact that EA s are not selling much at the moment, my experience with them is that they are always rushing the seller to close the sale with whatever the highest offer they have.

delthedriver

Galego wrote: »

Would an EA be so stupid to put off a potential buyer for the sick of 10 eur (or little more)?

With these small figures and the fact that EA s are not selling much at the moment, my experience with them is that they are always rushing the seller to close the sale with whatever the highest offer they have.

Fair point.
However EA's had a charmed existence during the boom, indeed they helped enormously in pumping up the property balloon until burst.
Do leopards lose their spots?
Be under no illusion EA's are little more than puppeteers who know how and when to pull the strings.
Despite the professional bull**** , the only interest they have in the deal is neither the sellers nor buyers!
So depending on how hungry they are €10 may be a deal clincher, however I am sure they will do their best to talk the price up further. I guess imaginary punters are calling the EA right now with further bids...............

Op best advice really is make a judgment call. Submit your best and final offer and be prepared to walk away. If it is the house you really want , perhaps a little more realism between €109k and €135k. Remember the old saying, the value of a property is what someone is prepared to pay for it.

How much is the property worth to you?

limnam

Galego wrote: »

Would an EA be so stupid to put off a potential buyer for the sick of 10 eur (or little more)?

With these small figures and the fact that EA s are not selling much at the moment, my experience with them is that they are always rushing the seller to close the sale with whatever the highest offer they have.

A lot of the EA's that are around now know no other way to do their job than the way they did previously so there is a large number of them who really don't know what they're doing.

It can be hard to figure it out that's why i sugggest finding out more information. I have contacted EA's on houses that were on the market for over two years and suddenly buyers come out of every hole and yet it's still on the market.

So you have EA's who don't know how to do their job. You have EA's that don't know any market except a good one and don't know how to adjust. You have EA's that do what they think the buyer wants. You have buyers that don't know what they want to do.

It's a minefield.

Leverarchfile

Above all else, make sure you get a really really good detailed survey done.
Money very well spent.
You can use the faults they find to negotiate price.

delthedriver

Leverarchfile wrote: »

Above all else, make sure you get a really really good detailed survey done.
Money very well spent.
You can use the faults they find to negotiate price.

Very good advice.

A full structural survey is a must.

There are properties built during the boom with structural issues or built on flood plains.............

Fondu

Update: Called EA today to put in an offer of 113k, was told straight away that an offer came in todat of 115k mortage approval. He mentioned that if there is a 1 or 2k difference between mortgage approval and cash, they would go for cash. It sounded a little strange to me and cant tell if hes pulling a fast one over me. Im going to put in my final offer tomorrow. I dont want to risk much more money so ill see what he says.

Norwesterner

Fondu wrote: »

Update: Called EA today to put in an offer of 113k, was told straight away that an offer came in todat of 115k mortage approval. He mentioned that if there is a 1 or 2k difference between mortgage approval and cash, they would go for cash. It sounded a little strange to me and cant tell if hes pulling a fast one over me. Im going to put in my final offer tomorrow. I dont want to risk much more money so ill see what he says.

Fuggetaboutit!
I'll give you some advice.
Wait and don't rush.
There will be a mountain of BTL's about to hit the market.
I decided 3 years ago to put my savings into a long term account and buy in Q3 2013.
I may have been a bit out in my predictions, and now see 2014 as the right time.

delthedriver

Fondu wrote: »

Update: Called EA today to put in an offer of 113k, was told straight away that an offer came in todat of 115k mortage approval. He mentioned that if there is a 1 or 2k difference between mortgage approval and cash, they would go for cash. It sounded a little strange to me and cant tell if hes pulling a fast one over me. Im going to put in my final offer tomorrow. I dont want to risk much more money so ill see what he says.

Don't waste any more time with this EA, let him starve this week!:)

Galego

Fondu wrote: »

Update: Called EA today to put in an offer of 113k, was told straight away that an offer came in todat of 115k mortage approval. He mentioned that if there is a 1 or 2k difference between mortgage approval and cash, they would go for cash. It sounded a little strange to me and cant tell if hes pulling a fast one over me. Im going to put in my final offer tomorrow. I dont want to risk much more money so ill see what he says.

That is absolutely rubbish from the EA. If I was the seller I would want to get the highest price for my house. Why would I care how the buyer finances that purchase?

quad_red

Galego wrote: »

That is absolutely rubbish from the EA. If I was the seller I would want to get the highest price for my house. Why would I care how the buyer finances that purchase?

We lost out on a house two months for this reason. Three bidders involved, all keen. Price going up everyday day and 5k under the asking it was suddenly taken off the market because a cash buyer came in. Spoke to EA and indicated we would go higher but EA said vendor immediately accepted 100% cash offer and property was off the market.

Galego

quad_red wrote: »

We lost out on a house two months for this reason. Three bidders involved, all keen. Price going up everyday day and 5k under the asking it was suddenly taken off the market because a cash buyer came in. Spoke to EA and indicated we would go higher but EA said vendor immediately accepted 100% cash offer and property was off the market.

If anyone is ever able to tell me why a cash buyer has priority over a mortgage approved buyer, maybe that day I will change my opinion but till then it makes absolutely no sense!

A mortgage approved buyer can pay the seller almost as quick as a cash buyer. If all paper work is well in place a bank takes literally 3 weeks to issue the cheque.

Would I refuse 2k, 3k, 5k, 10K for the sick of waiting 2-3 weeks extra? I wouldnt think so.

quad_red

Galego wrote: »

If anyone is ever able to tell me why a cash buyer has priority over a mortgage approved buyer, maybe that day I will change my opinion but till then it makes absolutely no sense!
.

I'm not saying it makes sense, only it definitely happens cos it happened to us!

EA (Sherry Fitz) said it was cos so many buyers still had problems with banks even if they were already mortgage approved.

dtipp

Fondu wrote: »

Update: Called EA today to put in an offer of 113k, was told straight away that an offer came in todat of 115k mortage approval. He mentioned that if there is a 1 or 2k difference between mortgage approval and cash, they would go for cash. It sounded a little strange to me and cant tell if hes pulling a fast one over me. Im going to put in my final offer tomorrow. I dont want to risk much more money so ill see what he says.

If it was me, under no circumstances would I make a call to the EA.

Wait from them to ring you, and when they do ask at least twice to remind you which house they're talking about :-)

It absolutely all depends on how much the house is worth to you, and how much you want it. But this is squeeky bum time, so if you are prepared to walk away, then make sure the EA knows that.

Best of luck.

dtipp

Galego wrote: »

If anyone is ever able to tell me why a cash buyer has priority over a mortgage approved buyer, maybe that day I will change my opinion but till then it makes absolutely no sense!

It's the difference of being offered cash for something and being offered a cheque.

Sure, the money is probably in the bank, but cash is cash is cash - there's much more certainty with speed of settlement.

R0C

Fondu wrote: »

Update: Called EA today to put in an offer of 113k, was told straight away that an offer came in todat of 115k mortage approval. He mentioned that if there is a 1 or 2k difference between mortgage approval and cash, they would go for cash. It sounded a little strange to me and cant tell if hes pulling a fast one over me. Im going to put in my final offer tomorrow. I dont want to risk much more money so ill see what he says.

The EA is without a doubt playing games.

I've been in a similar situation.

There was a lovely house in my locality on the market for 4 years when I expressed interest in it in 2010.

Like you, I had the 'cash', I could buy it immediately without mortgage, paperwork, dealing with bank delays.

It had been listed at 270k originally and by the time I became interested in 2010 it was down to 150k.

I contacted the EA, viewed it, of course he told me there was someone else interested who had just viewed it the previous day and would be making an offer before the end of the week. This seemed a little odd given the property was on the market so many years already.

I found the EA to be extremely pushy and this put me off a bit. I made only one positive comment during my entire viewing, I pointed out (to my partner) a high ceiling in an outbuilding which was suitable for my line of work and the EA overheard and instantly latched onto this reminding me "but don't forget that high ceiling and how useful that would be for you!" in several subsequent phone calls.

Several days later I made an offer of 120k and he laughed at me telling me they had another offer just a few minutes earlier of the asking price from the person who viewed the day before me.

No problem, I have many other properties to view, I told him.

Few hours later, he calls me back, the other offer had fallen through but my offer was so laughably low he couldn't possibly pass it on to the seller.

This was the first time I had ever made an offer on a property and I've learned a lot since (i would not do this now) but I increased my offer by 5k to 125k.

This was rejected within the hour as another new bidder was now making an offer of 155k to secure the property and if I didn't act very fast I would lose out on that high ceiling.

I found this very suspicious though I had no previous experience of house buying, but I decided to back off and ignored several of his calls. He hounded me throughout the next week with voicemails, firstly informing me there was yet another person who had viewed that day and was going to make an offer - i was now entering a 'bidding war' - i answered his next call to tell him my offer stands but i would not be going higher and i would be cancelling this offer by that afternoon. Within half an hour he called to tell me my offer had been accepted as the other bidders couldn't get mortgage sorted quickly enough due to the recession, extra paperwork and checks etc. He was able to provide endless personal details about each of these bidders who got interested the same week as me.

I decided to proceed at 125k as the house was very suitable to me and went to bring the EA my deposit. As soon as this stage occurred, the first bidder who had pulled out was back on the scene and was offering the asking price, 150k.

At this point I backed off completely and decided to have no more to do with this EA or house.

He hounded me again with calls, texts and voicemails telling me if I could come within 2k of the other bidder they would go with me as I was offering cash and there would be delays with paperwork/banking from the other bidder who had mortgage approval.

I told him I was done, no longer interested in this property and now making an offer elsewhere.

He continued to call me several more times for over a week to confirm I definitely wasn't interested and I had to warn him to stop hounding me.

The house remained unsold until March 2013 when it was purchased for 80k (which was extremely cheap for the house in question).

By this time I learned the original owners were in dire straights financially (they had built another house in 2005 and needed to sell their original house) and unable to understand why everyone who expressed interest to the point of making an offer had pulled out at the last minute.
The EA placed all of the blame on the banks saying they were changing their minds about mortgage approval at the last minute.

I'm more experienced with EAs and houses since then and have learned that these are all standard EA tricks and though this guy was the most extreme of them, it's very important to be able to walk away and not get caught up in phantom bidding wars.
There will almost always be someone else interested the very day you view the property. There will always be someone else about to make a higher offer the same week as you.

If everyone walked away, maybe these EAs would learn their lesson.

Sorry for the long personal story but maybe it can open someone's eyes to how far these EAs will go.

Fondu

Update:
The EA came back to me today saying that the other bidder has put in an offer of 123.

My offer was 118.

Not sure what i will do. Its reached the max i would pay for it now tbh. Its an investment property so i will not become emotionally attached to it.

delthedriver

Fondu wrote: »

Update:
The EA came back to me today saying that the other bidder has put in an offer of 123.

My offer was 118.

Not sure what i will do. Its reached the max i would pay for it now tbh. Its an investment property so i will not become emotionally attached to it.

Walk away! Plenty more opportunities out there. EA is just playing games.

R0C

delthedriver wrote: »

Walk away! Plenty more opportunities out there. EA is just playing games.

What do you want to bet the other bidder will suddenly pull out/have a change of heart within an hour of the EA hearing OP is no longer interested...?

Galego

Fondu wrote: »

Its an investment property so i will not become emotionally attached to it.

If this is an investment then which is the rental yield if it went for 125k?

Less than 5-6% then personally I wouldnt bother with it.

ted1

Galego wrote: »

That is absolutely rubbish from the EA. If I was the seller I would want to get the highest price for my house. Why would I care how the buyer finances that purchase?

Because more sales fall through that rely on a mortgage as oppose to those with cash. Also cash sales close faster