Was this a reasonable offer???

joelb1

I'm a first time buyer and have recently found a house that I and my wife like. The house is up for £265,000. After checking the land registry sale prices of all sold houses in the area I found that no similar house had sold for over £245,000 during the last year. Also taking into account that the market in this area (Oxford) seems a bit slow, (-houses seem to be sticking, then get reduced), we put in an starting offer of £240,000 giving us room to move to our maximum of £250,000. We increased this to £247,500 in two steps and said this was our final offer. The agent then said that the vendor has now decided to leave the property on the market for the next month or so to see if they can get nearer the asking price. Thier attitude was almost "please go away and stop bothering us!"
Considering the asking price is just over the 3% stamp duty threshold of £250,000, we assumed that the vendor MUST be looking for an offer of just under. For this reason and after researching the local sale prices, we thought our offer was fair and reasonable.
£265,000 seems a funny figure as it will cost anyone £5,500 or so for exceeding the 3% threshold.
Does anybody have any veiws on this and do you think our reasoning for our offer was correct?
Any feedback would be appreciated as this was the first offer we have put in for any property and if mistakes have been made then we need to avoid making them again.

Red_Elle

I think it sounds like a reasonable offer and I would have considered negotiating on it. I am no expert and asked for advice on offering myself not that long ago.
The best advice I read from lots of people is offer what you think the house is worth. You might want to speak to agents who recently sold houses in the area though - there might be a very valid reason for the difference in price. The one you like might be in a better state of repair/have new bathroom/new kitchen etc and they may have spent £15k on doing stuff to it.
I would be inclined to ask their agent why they have it priced at that level and what the agents initial valuation was. Ask them why the vendors feel it is worth £15k or so more than similar properties in the area when things seem to be quite static there atm.

rozeepozee

I would agree with your logic. A property is worth what someone will pay for it and in a slow market and no other buyers, I reckon it's worth what you've offered! I'd be inclined to make it clear your offer is still on the table and that you are going away to look for other properties. The seller might then decide s/he doesn't want to lose a serious buyer. Even if they leave it on the market, if someone else puts in a higher offer, you have the option of upping yours and, you never know, you might find another property you like that the buyer actually wants to sell

Ian_W

Anyone who prices at £265K and expects to acheive it with the 2% extra penalty kicking in at £250K is just being plain silly - unless they offer to pay the extra SDLT.
I'd go with Rozee's advice but when you do stress to the EA your strong buying position, ie FTBer, mortgage in place [presume you have an AIP], cash deposit, ready to move quickly etc. The price is a lot higher than most FTBs can go to so most other potential buyers will have a property to sell or be involved in a chain.
If no, then do view other props. BTW I can't see any mistakes you've made, I think you've acted just as an experienced buyer would, so well-done you. Trouble is some people have an over-inflated sense of what their house is worth and it's usually the same ones who expect to get a cheeky offer accepted when they're buying!!

joelb1

Thanks Guys. It's nice to know we weren't too far out. I think we'll keep looking for other properties and see what happens. This place needed a little work done on it anyway, so glad we stuck to our guns. Just discovered it had been reduced by £10,000 last month though, but like you say, a place is only worth what it's worth and not always what the asking price is. Might even view a couple throught the same agent so they know we're looking elsewhere!

sophistica

He is probably looking for £255,000 with a deal being struck on fixtures and fittings which would mean that you will pay the stamp duty at 1%. However, be aware that the buyer is concerned about his money not your stamp duty problem! You also need to think about how important this house is to you - have you made a list of all the things that you want in a property and then scored this house against it? If you love the house an extra £6-7k is going to only amount to an extra £35 per month on the mortgage. Good luck.

FaTB

Now the froth has well and truly come off the market, I would personally have been offering around 20 % under asking price, certainly anybody who pays over the £250k is a mug, but there are alot of them about.

But it depends on how bouyant the market is in that area, how keen they are to sell, and most important how much you want it.

I have a couple of freinds whose houses stayed on the market for over a year, one gave up, and the other sold eventually but only after slashing the price.

If he keeps it on the market for a while, and makes no sale, then approaches you again, I would be tempted to say that was then this is now, and drop the offer !!!

crankup

I would take your offer seriously if it were me, especially as you are FTB with no chain under you.
Their loss!

NAR

An Estate Agent told me that the hardest properties to sell are those in the £250k to £300k bracket, because of the stamp duty. The fact that they have already reduced the price tends me to think that their estate agent overpriced the property in the first place and thus raised the seller's expectations. Your research showed the true value of the property prices in the area and you were quite right to pitch a bid at the level you did. The property has been on the market for a while, by the sounds of things, yours is the only offer received so far, so stick to your guns and keep under £250k. Good luck.

Jorgan_2

As has already been said houses priced between £250-£275k are extremely difficult to sell unless the vendor offers an incentive to pay some of the stamp duty. Its the same in the lower price threshold of £120k. We used to sell a lot of houses at £122-£125k, but nearly all of those house types now have to be marketed at less than £120k.

OP, stick to your guns on the price you want to pay.

xela_17

Jorgan wrote:

Its the same in the lower price threshold of £120k. We used to sell a lot of houses at £122-£125k, but nearly all of those house types now have to be marketed at less than £120k.

This situation is having a terrible knock on effect to lower priced properties. We have our house on the market at 114950 and it's a one bedroom. We are now competing with two bedrooms that before the stamp duty change would have been on the market at 125000 but are now at 119995. A lot of our potential buyers have been take away from us due to this.