What to Offer?? FTB

Matty0682

Hi Folks,

I just wanted some advice before I entered the housing market, so everyone’s input in much appreciated. We have found a house we really like and would like to put in an offer, however I am not sure how to play our hand.

Here is the house situation: It’s a Detached 3 bed house on market for £185k, however they bought it for £192k in Nov 2007 and have made no amendments to the property (only adding a large shed in the garden). House has been on the market for 1 year, with no offers, in this time the asking price has been reduced from £192k to £185k. The owners are chain free because they will move into rented accommodation, and are selling to be closer to their new Grandchildren.

We are first-time buyers and have a mortgage in principle agreed.

Is it fair to my to base my offer on the statistics published from Halifax and Nationwide on house prices?

Basically, Halifax price house statistics say that from Nov 2007 (when sellers bought) to now, a detached house in the same post code is worth 20% less. This would mean the house is worth £153.6k. Nationwide price indices show a fall of 15% (£163.2k)

Do you think these should be my low/highest offers? I mentioned these percentages to the estate agents, and they said the vendors would prob want close to asking price, not a 20-30k reduction. Are sellers realistic or are my calculations not used in practise?

The area I am talking about is a semi-rural place in South Wales...there are not many buyers around at the moment, house prices are not greatly effected by rising unemployment due to the main employers being NHS, local government and education.

Thanks for yr help

JF77

I could easily have sold my house for between £185k - £190k in 2007. I sold it for £153k 3 months ago! The fact that it has been on the market for over a year speaks volumes and I would not be paying any where near that asking price. They obviously want a retirement nest egg but I would not want to be the one funding it for them.

If it was me I would be going in with an initial offer of a little over £150k with small increases to a maximum of £162k. I would also leave a bit of time between each over and, let the EA know that you are really pushing your budget and will have to speak to your lender etc.

Hope this helps

Fire_Fox

Chickmug started a very helpful thread on this issue:
http://forums.moneysavingexpert.com/showthread.html?t=1907059

Riq

If you are not embarassed by your first offer then it's not low enough.

Running_Horse

Matty0682 wrote: »

Is it fair to my to base my offer on the statistics published from Halifax and Nationwide on house prices?

Ultimately they have something you want. Fairness doesn't come into it.

I would spend less time over analysing endless statistics and offer slightly less than what I think it is worth to me today. If rejected I would go in with my final offer, and be prepared to walk away.

Think of a number...

blunt_crayon

if it is on for 185k they should expect to receive offers under £175k due to the stamp duty threshold. with no offers in a year it is doubtless overpriced. but I doubt the sellers are prepared to consider that local percentage drops may be relevant to them; they no doubt think their property is special and hasn't been affected...

Cannon_Fodder

under £175k, as stamp duty kicks in...

you should research local recent sale prices, the stats alone will not be precise to your locality. use houseprice.co.uk

which might mean it should be less than the stats suggest, as parts of Wales have been hit harder than others...

http://www1.landregistry.gov.uk/houseprices/

[IMG]http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/default.asp?g=1&gt=1&a=Wales&ac=Carmarthenshire&s=01 October 2007&e=01 August 2009&t=4[/IMG]

themanbearpig

Don't just look at the average percentage falls, look at the land registry sales of similar houses in the area, and use google streetview to check if they have been extended, and then calculate average falls yourself.

Its a bit of work, but using graphs like the above are useless when actually trying to value a property.

poppysarah

Matty0682 wrote: »

House has been on the market for 1 year, with no offers, in this time the asking price has been reduced from £192k to £185k. The owners are chain free because they will move into rented accommodation, and are selling to be closer to their new Grandchildren.

Doesn't quite add up to me.

Offer as low as you like.
Or have a second viewing and go and quiz them some more.

Sweetcaz_2

I think this is a standard EA reason for someone selling.

How many times have people said they are moving to rented to be near family!! Mine said this and 4 months later I am living with parents as 8 weeks in my vendor decided to buy somewhere!!

dwichmann

also you mention they've added a shed, is this even included in the property, probably not so definately dont factor this in as an improvement. If you think your offer is fair then id go lower still becuase they will almost certainly reject your first offer out of principle and to play the game. Just in my experiences anyway.