Making offers

RHemmings

In my area the property market has cooled, but buyers are still asking high prices. But checking the land registry shows that prices are definitely going down. A lot of property has been on the market for a year or more.

I understand that making some "silly offers" is the thing to do but aren't good at this sort of thing. If you're going to be offering 20 or 30% off asking as a starting bid, how do you go about it. My personality is such that I feel guilty making any sort of offer at all under asking, but current sale prices are well below previous sale prices, and certainly below asking.

Advice please. I want to save some money.

ginger_nuts

Have you arranged your finances ? you could say I am prepared to make an offer off £xxx subject to survey .My finances are in place and I am ready to move . Once you get an offer accepted ask for the property to be taken off the market .

RHemmings

ginger_nuts wrote:

Have you arranged your finances ? you could say I am prepared to make an offer off £xxx subject to survey .My finances are in place and I am ready to move . Once you get an offer accepted ask for the property to be taken off the market .

I don't have finances arranged. In my current "silly offer" mode, I would probably need a 50% mortgage. I was hoping that such a mortgage would not be difficut to obtain. But you make a very good point.

I'm currently renting, but on a 6 month contract. I calculate that in the worst case, if I buy and have to leave my current rented property empty for six months it will cost me about £3,500 including rent and council tax. Or would I have to pay council tax if I'm not living in a house? So I think I would be better off using ultimate flexibility as a bargaining tool.

Doozergirl

Making offers of 20 - 30% below asking price isn't likely to get you very far. Even if prices are dropping where you are, (they seem to rising slightly again where I am :wall:) I can't imagine that they would have dropped that far. As long as they can afford their mortgage repayments, a vendor simply wouldn't sell at that mark down. They would either stay put or reduce their price over a long period of time until they found a buyer.

You'd have to be not very picky about the house that you bought as you'd have to try offers on multiple houses to find any kind of success. Keep doing it and the local agents aren't likely to take you seriously either.

If you want below market value property, you're better off looking at auctions where people will accept BMV offers and you won't get a name for yourself as a timewaster.

If you're serious about buying, you should see a mortgage broker and get an AIP before you even start making offers. Especially silly ones.

RHemmings

Doozergirl wrote:

Making offers of 20 - 30% below asking price isn't likely to get you very far. Even if prices are dropping where you are, (they seem to rising slightly again where I am :wall:) I can't imagine that they would have dropped that far. As long as they can afford their mortgage repayments, a vendor simply wouldn't sell at that mark down. They would either stay put or reduce their price over a long period of time until they found a buyer.

You'd have to be not very picky about the house that you bought as you'd have to try offers on multiple houses to find any kind of success. Keep doing it and the local agents aren't likely to take you seriously either.

If you want below market value property, you're better off looking at auctions where people will accept BMV offers and you won't get a name for yourself as a timewaster.

If you're serious about buying, you should see a mortgage broker and get an AIP before you even start making offers. Especially silly ones.

I take all the points about having finance ready before making offers. But I would make silly offers through a proxy to avoid getting a bad name with estate agents. And houses that have sold for auction round here have been typically tens of percents lower than typical asking prices. An example, identical houses on a newbuild estate. Asking prices typically £175K. Auction price £143K. After studying my local market very carefully, I conclude that my best move is to wait and let it all unwind. But making silly offers would give me something to do in the meantime.

Doozergirl

With a deposit of 50% you should be able to buy at auction without too much of a concern on the mortgage front.