How much to offer on property -is 10% less too much ?

redsclubbedup

Hi,

I am looking for some advice as to what we should offer on a property in the first instance (we assume the first offer will be rejected).


The property we have seen, that both my girlfriend and I like is on the market at 125,000 - we have a 15% deposit, and are also FTB's, so are not part of a chain (we have been told to play on this when making an offer.

The property we like has only been on the market for a week, so we doubt that they are going to take our first offer. That said I have a review at work in a week, so we will be waiting until then to put in an offer (as I may get a slight pay rise).

I was thinking of going in at 112500, but my girlfriend feels this is too low. Ideally I would like to secure the property at maximum - 115

Does anyone have any advice / thoughts on this ?

Thanks

Ian

Gwhiz

redsclubbedup wrote: »

Hi,

I am looking for some advice as to what we should offer on a property in the first instance (we assume the first offer will be rejected).


The property we have seen, that both my girlfriend and I like is on the market at 125,000 - we have a 15% deposit, and are also FTB's, so are not part of a chain (we have been told to play on this when making an offer.

The property we like has only been on the market for a week, so we doubt that they are going to take our first offer. That said I have a review at work in a week, so we will be waiting until then to put in an offer (as I may get a slight pay rise).

I was thinking of going in at 112500, but my girlfriend feels this is too low. Ideally I would like to secure the property at maximum - 115

Does anyone have any advice / thoughts on this ?

Thanks

Ian

All I can say is if you are not embarrassed by your first offer then it's too high. What you offer has nothing to do with percentages and everything to do with what you believe the property is worth. Have to researched the area to see what prices property is actually selling at (as opposed to asking prices?). I would offer what it's worth even if it was 30% below asking.

SelbyJay_2

Why not be cheeky? As long as you're realistic, why not put in a really low offer, just to see what happens?!

DaddyBear

Gwhiz wrote: »

All I can say is if you are not embarrassed by your first offer then it's too high. What you offer has nothing to do with percentages and everything to do with what you believe the property is worth. Have to researched the area to see what prices property is actually selling at (as opposed to asking prices?). I would offer what it's worth even if it was 30% below asking.

Totally agree. Since the crash started the gap between asking and selling prices has been getting bigger as sellers remain deluded about what their house is 'worth'.
Current average initial asking price is £226k and current Halifax and Nationwide average is about 157k. This is over 30% difference and makes your 10% off look extremely generous.
However, you will have two issues. The first is that the house has only just gone onto the Market so the vendor will not be partial to a low offer just yet. The second is that the vendor may only have a small amount of equity left in the house and may have a value below which he can't sell.
My advice would be to watch it for a while. Don't believe the media hype. The Market is not recovering, transaction levels are at an all time low, particularly on FTBer properties. Patience is a virtue.

Anew

I was in your position just a couple of weeks ago, so firstly well done on coming here, I found all information on this site to be solid gold!

The best advice I can give you is to research the area, I did this and found that a recent sale of a 3 bed house sold for less than the asking price of the 2 bed I was interested in, similar state of condition otherwise, but one extra room - this gave me huge confidence and worked out to be a great statistic to mention, especially as they were both sold through the same EA. Even a little local knowledge went a long way, as the EA knew I had looked hard and was serious about the situation.

In the end I got almost 11k off the asking price, which priced at 138,000 was a good chunk off. I started at 120,000 and worked up to 127,500 so it was good mid ground to settle on.

You can go in low, but as some folk told me, you have to be prepared to rise, and show the EA you mean business. Don't be taken for a ride, but resist the urge to play it too cool, this method worked for me. Unfortunately though every situation is different. But good luck, its one hell of a rough ride! But worth it in the end.

redsclubbedup

great advice, thanks everyone - have had a look at prices in area, but can't find the price they paid for it.

however the other property we looked at with same EA, at same price / similar location / size was brought 2 years ago for 123K, and they are asking 125K for it

it seems very bizaree, as we viewed another property, on the same road, same size, but according to the estate agent "better quality of finish" - but it didnt have any off road parking (the one we like has) and it was on for 135K - so its tough to benchmark !

Bibliophile_2

I negotiated the purchase of a house recently and through hard work and nerves of steel I managed to get an 8% reduction against the asking price, and down almost 20% on what the property was put on as last year.

You must do lots of research, don't just look at properties in that area, but in comparable areas to get a rough idea of the price. You then need to work out what it's worth to you, and the maximum you will go to.

Start with a low offer, then if you need to, go up in small increments. You don't need to give the Estate Agent lots of information, just say it's what you think it's worth, no one can argue with that.

Be prepared to walk away.

Good luck

lovethymini

redsclubbedup wrote: »

great advice, thanks everyone - have had a look at prices in area, but can't find the price they paid for it.
Irrelevant

however the other property we looked at with same EA, at same price / similar location / size was brought 2 years ago for 123K, and they are asking 125K for it
Irelevant - how do you know the condition of the property when they bought it?

it seems very bizaree, as we viewed another property, on the same road, same size, but according to the estate agent "better quality of finish" - but it didnt have any off road parking (the one we like has) and it was on for 135K - so its tough to benchmark !

Go with what you think it is worth to you.
Decide on the maximum you would go on it before you walk away.
Make a fair offer, you're in a very good position and it will be to your advantage for the EA to be knowledgeable about this.
Before you decide to make a silly low offer on the assumption that no-one accepts the first offer, ask yourself if you will be kicking yourself if you were to find out that you lost it because someone else offered a sensible price and got it.
I've sold a total of 4 properties so far, and have accepted first offers twice. I based these decisions on the buyer's position and what price I would accept for the property.
Good Luck

pizzagirl

You'd want to be starting at least 20% less than the asking price, assuming that the asking price is somewhat realistic.

redsclubbedup

well interestingly it turns out that the house nextdoor has been sold - it was on the market at 120K, and is no sold subject to contract - does anyone know how long it will be until the price will likely be on the landregistry, are we talking months or weeks ???

googler

At least a month. Maybe the agent selling the one next door will tell you once the sale has concluded? But then it might be too late for the one you're interested in...?