Evaluating an opening offer.

Tony_R

Hello,

Today we viewed a house which is on the market for £250,000. It is a three bedroom semi in Surrey with two receptions as well as conservatory. The look and layout of the house is ideal, but it would need a little bit of work. Mainly the guttering and the wood between the roof and house is in quite a bad state. Plus a few rooms aren't in the best of states but thats just general redecoration.

Last week we saw a house on the same road which while has a slightly smaller floor space, but has a garage and basement for storage which this doesn't, it was also in pristine condition which was also £250,000. Unfortuantately that is now under offer, as my sisters husband is a builder and I wanted to get him to take a look first, but we were too late.

For the house we saw today, the estate agent said that they would a be a bit of leaway for negotiation, compared the the house we missed out on which went for close to asking price.

Now I've just looked at houseprices.co.uk and have seen that next door went for £177,000 in January 2009, but I don't think this one had a conservatory, although I'm not 100% on that.

I'm planning on taking my sisters husband (the builder) along for a 2nd viewing ot get his idea on the price of reguttering would be as well as checking out the general structure.

Based on what he thinks I was thinking of offering around £200,000. Would that be insulting as an opening offer considering it is 20% below?

kinglewis

I think it's a good offer compared to what the neighbour sold theirs for. However the housing market is moving at the moment.. or at least good quality houses are selling in the right areas. I assume this is a decent area by the speed the other one went under offer.

I think realistically the pristine one sold for 240k and you might end up getting yours for 230k. Worth bearing this in mind as you submit your first offer... (just from a phycholigical point of view.. buyers want a bargain.. but sellers don't want to 'give it away' unless they are forced by lack of interest)

I would be cheeky with a first offer.. you will tell from the EA reaction usually how near to the mark you are.

Tony_R

Yes it is a nice area. We are also first time buyers with a 20-25% deposit who both currently live with parents. They are still looking for their house to move on to, so we could happily wait till they are ready or go when they need us to. I presume that means we are in quite a good position?

nollag2006

It sounds like you're in an excellent position Tony ! Good luck with it.

chickmug has a good thread on here outlining what to bid when purchasing a home. Worth searching for...

Tony_R

Thanks for that. Originally our budget was around £230,000, and we saw a house which was pretty much perfect inside and out, but it was just a little small. The agent said the vendor would probably take nearer £215,000 but we decided it wasn't for us. He recommended us looking at the pristine £250,000 house even if it was over budget, but as it went so close to the asking it might have been a little much for us.

If we could get this for £225k - £230k i'd be happy with that, but considering what next door went for, i thought i'd be a little cheeky with the first bid. Saying that I'm not 100% sure we will even go for it yet. This is quite confusing.

I'll take a look at chickmug's thread.

marcg

I would make the offer at £225k, supported by your circumstances (chain? deposit in place? mortgage agreed?) and make 100% clear you aren't going to negotiate.

If they come back to you, stand firm at £225. Let it play out for a couple of weeks and then begrudgingly go to £230k.

If they reject £225 out of hand, then they would also reject £230 so it wouldn't matter. I don't think £200 from £250 is going to start any conversation.

CloudCuckooLand

Do you know what the inside of next door was like? Maybe it needed renovation.

I think £200k is a touch too cheeky. As though you've simply picked the nearest big round number.

£210k might suggest you've thought about it and are therefore more serious, especially if you would be happy at £225k+.

missile

I would be quite upset if were my house and I found out that my agent was talking down the price.

Tony_R

Good point. It's only after seeing that next door went for £177,000 that got me thinking that it might be overpriced,

£215,000 may more reasonable? anyway I'm getting little ahead of myself here.

marcg

Maybe it _is_ overpriced?

If so and they are pricing it £73,000 higher(!) then maybe they are too unrealistic to deal with - you make your offer at £200 and don't expect to hear back?

I think you need to do more research on the market value.

kinglewis

I would make the offer at £225k, supported by your circumstances (chain? deposit in place? mortgage agreed?) and make 100% clear you aren't going to negotiate.

If they come back to you, stand firm at £225. Let it play out for a couple of weeks and then begrudgingly go to £230k.

If they reject £225 out of hand, then they would also reject £230 so it wouldn't matter. I don't think £200 from £250 is going to start any conversation.

Great advice.. I couldn't recommend strongly enough to someone to make one offer.. stick to it.. then follow up with a best and final offer (its all in the head!)

Don't nudge your offer up bit by bit.. they won't take you seriously. The agents will honestly give you an idea!! just go in a bit under that!! (i I doubt it's overpriced if a neighbour sold while the price was at 250k)