when do i up my offer?

Discussion in 'Mortgages and buying and selling homes' started by joeyd, 15 Sep 2009.

  1. joeyd

    joeyd Registered User

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    hi all i am going to approach a builder to buy a house. i am going in with a very low cheeky bid. i assume he will laugh me out of it. the question is when do I up my offer? do i wait a few days/weeks etc
    i am willing to go up 40k on my starting bid (at a push) although my gut feeling is to not go past 20k more that starting offer
    any advise would be great!
     
  2. chlipps

    chlipps Frequent Poster

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    I dont think any builder is laughing at the mo... What is your offer vs. what are houses worth in the area with same finish. I would be in no rush to increase the offer
     
  3. joeyd

    joeyd Registered User

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    the builder sort of abandoned the house when he ran into financial difficulty, it isnt even to the standard of a "builders finish" needs a good bit of work. our engineer quoted 70k to finish it off. i dont really have anything i can compare it to in the area. my uncle who is a builder himself said it is only worth what the original builder paid for the site which was about 50 or 60k. i would say the builder spent about 100k on work to date + site! i am going to start at 80k but as mentioned am willing to go up 20-40k max on this! just need to know how to play the game!
     
  4. joeyd

    joeyd Registered User

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    latest update! he did laugh me out of it, well more gave out about the ridiclious offer and that we were only trying to take advantage thinking he was in bad way to sell. that he was actually very busy and selling houses and has few people interested in that house. said he would expect at least 180k for it. i left my bid with him but im not feeling too optimistic.
     
  5. heritage

    heritage Registered User

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    You never know. If he is actually very busy and selling house then I would wonder why has he not finished this one. If it is not on the basis of money then why?
     
  6. joeyd

    joeyd Registered User

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    the house has been lying there about 2 or 3 years with no work done on it. now he says he is going back over all his houses and getting them ready for selling and that one was next on his list! my absolute limit is 120k considering it will take 70-80k to fix it up. should i just offer him that and if he doesnt take it walk away? i really want it but simply cant afford to pay more than that plus the extra to finish it.
     
  7. Soarer

    Soarer Frequent Poster

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    Did you explain to him that your offer was for the house "as-is"? Going by what's left to do to the house, his price of €180k sounds like a finished price to me.
     
  8. joeyd

    joeyd Registered User

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    yes, he offered it "as is" for 180k but he says he is going to finish it and charge 220-230k for it. now my engineer said it would take 70k to finish it. that is taking into account re-doing bits and pieces that were done very sloppy in first place eg. leak at lead of chimney therefore some ceiling p'board needs replacing, all ply to first floors need replacing and all window boards need to be replaced to name a couple. the current insulation is very poor and from the bit we can see is upside down. we wanted to dry line external walls. im sure he wont do this when he comes to finish off
     
  9. andrewol

    andrewol Frequent Poster

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    Id say hold out.... I reckon he probably has a bit of cash/can afford to sit on it. He's unlikely to get many offers till after the December budget and now dosent seem to be the time to pay over the odds for a house when theres decent amounts of property on the market cheap.
     
  10. mercman

    mercman Guest

    So he ran into financial trouble for the crack 2 to 3 years ago. And he is now about to pump money in a dead market to get into a bigger Financial mess himself. You're doing well at the moment -- no more higher offers . Find out what the name of his company was / is. Get the name of the liquidator and enquire does the company own the site and ask him will he take an offer.

    Most people didn't believe builders in the boom - so now we all have to believe them. Get real.
     
  11. chlipps

    chlipps Frequent Poster

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    Dont be in a rush to up your offer... let him wait for awhile and defintely do not up your offer by 40k in one go as then he will think you have more to offer him... I think maybe up the offer to 90K in a month's time and tell him thats your final offer

    If he thinks he is going to get 230k for it after he invests more money into it, then let him off. What size is the house and the site?? Are similar houses with builders finish making 230k at the moment in your area?
     
  12. Bronte

    Bronte Frequent Poster

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    Last edited: 18 Sep 2009
    Figures - let's play with the figures

    120 + 80 to finish = 200

    Offered to you now for 180

    If he finishes it he says it will go for 220 which is close to your figure of 200 (and he has to take say at least 20K profit)

    The difference between 220 and 180 is 40

    Your engineer thinks it will cost 80 to finish it, but the builder thinks it's currently worth 180 but you know 40 will not finish it

    You said you can go another 40 = 80 + 40 = 120 but to finish it costs 80 so 120 + 80 = 200 which is 20 under what he says he will be selling it for.

    The fact he mentioned figures to you means that he is not cutting you off, he may not have the money to finish it off, it's a waiting game, only one of you will win but you hold the cards because it's a depressed market and you can walk away and you must walk away from the max amount you can afford. You must also try not to overpay.
     
    Last edited: 18 Sep 2009
  13. joeyd

    joeyd Registered User

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    thanks all... just to clarify bronte i can only go 40k over the 80k i have on the table i.e can only go as far as 120k to buy it (taking into account i will need a further 80k to finish) i am prepared to walk away at 120k "as is".
    chlipps .. houses in the area to builders finish are currently standing at 200 - 220 (mostly 200)
     
  14. chlipps

    chlipps Frequent Poster

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    Figures are great Bronte so I will add a few more figures.. In my neck of the woods, personnel were estimating costs at approx 100 per square ft, so if you have 2000 sqft, then cost 200k to build with lot of finishes in place... But they were the good days and costs have dropped alot since, so if now say 60 eur/sqft, then 2000 sqft hse would cost 120k to build + 60k for site = 180k which is probably where the builder is getting his 180k figure from... Again what size is the house you are trying to buy? and what type of finish was he planning on completing to get 230k?
     
  15. Bronte

    Bronte Frequent Poster

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    13,126

    Sorry, I missed that, I've fixed the figures. I've used the higher build cost (it ALWAYS goes over) and the lower builder sale price (as it's a buyers market).

    Anyway this is all pedantic, you can go to 120 and that's very important that you know your limit.