Starting point for offers

paroncider

I commented on this yesterday under the sticky topic about the guide to buying, but thought this might warrant a topic of its own.

I haven't seen much activity as of late in terms of what percentage of asking price is reasonable in today's market. Last year, people were recommending 10% as a general starting point, but what's the general opinion on that now, when prices are still on the decline in most areas?

After putting in offers on several places, that were subsequently declined, I refuse to offer more than 90% of the property's asking price. In each case, the EA said that the buyer wanted "closer to asking price", even though the price didn't day OIEO or OIRO.

I am basing my numbers by looking at historical prices for other similar properties on that street. Most asking prices are still in the 2006-7 range, which seems artificially high in this depressed market.

It's probably relevant to mention that I am in the Home Counties, so this would be reflective of prices in the South East.

Looking forward to your comments...

siliconbits

I'd for for 5% less to the nearest upper '000. Bear in mind that prices are quite low

brit1234

Personally I would do no more than 3.5 times salary. I would also wait till people realise these socalled green shoots were just spin and died like they are now.

Blacksheep1979

Saying knock x% off is foolish - you should evaluate what the property is worth to you and for the area. Saying always start with knocking 10% off isn't valid if the property is under/accurately valued nor if it is over valued by 30%.

Do your homework, find out what similar properties sold for and base any offers on that (obviously coming in a little under to leave room for movement/chance of a bargain)

rosyw

Blacksheep1979 wrote: »

Saying knock x% off is foolish - you should evaluate what the property is worth to you and for the area. Saying always start with knocking 10% off isn't valid if the property is under/accurately valued nor if it is over valued by 30%.

Do your homework, find out what similar properties sold for and base any offers on that (obviously coming in a little under to leave room for movement/chance of a bargain)

Completely agree with you!
Personally I would certainly not accept an offer of 10% below asking price on my property, we had it on the market 2 years ago and withdrew it from sale when our circumstances changed, I am now having to sell due to the death of my OH, and have lowered the price accordingly, selling at 10% below an already reduced price is not an option.

shirlgirl2004

We haven't offered anywhere near 10% below and our offers are still being refused. We look at price data and work done/needs doing and go from there. Percentages don't really come into it. Also we are looking at houses around the £700k mark which would make 10% a lot of money.

ETA: I'm looking in Essex

paroncider

rosyw wrote: »

Completely agree with you!
Personally I would certainly not accept an offer of 10% below asking price on my property, we had it on the market 2 years ago and withdrew it from sale when our circumstances changed, I am now having to sell due to the death of my OH, and have lowered the price accordingly, selling at 10% below an already reduced price is not an option.

Gosh, sorry to hear.

I'm curious at the feedback thus far because in our area prices don't seem to be reduced. Having done my research on properties sold in 2007, these asking prices are at that level. I'm not trying to be cheeky, but am aware that with the three properties we've put offers in on, the vendors seem to still expect 2006-7 level prices.

I have heard people talking about remortgaging now and ending up in a negative equity trap which is why I was wondering about putting in an offer of 10% below asking price.

Basically, we're FTB with a sizeable deposit (40K) and were hoping to finally get onto the property ladder after patiently waiting it out. We don't want to borrow an unreasonable amount (looking for 80% LTV) with the idea that at least we could get a place that would be equivalent to what we're paying in rent at the moment, and lock that in for five years.

Going to place an offer on another property tomorrow. We like this one far better than any of the others -- here's hoping they accept it.