First time buyer - what to offer

Tren124

Hi

I have found a house that i really like but am concerned that the asking price is significantly higher than the actual value..

It is a terraced house in a nice area with sea views etc and has been well decorated with a decent kitchen, new bathroom etc etc.

The asking price is £395k and having looked at some historic property prices on the street, i can see that the house next door (remember this is a terrace so it is likely to be exactly the same layout etc) sold for £325k last december. Also, another house in the same row of terraces sold for £365 in august 2007 when i believe the market was near its peak.

I have read that it is typical to come in with an initial offer 10% lower than the asking price but am concerned that even then i would be paying over the odds..

As i said, the house is very nicely decorated etc but surely that cant add the level of value that the vendor is asking for?

Any suggestions on what i should consider offering? i am very new to all this..

Thanks

rb7oaks

It sounds like it is indeed overpriced from what you are saying - but that is not so unusual. Remember also that we are nearing the end of the 'house buying season' and that apparently prices are falling slightly. Do you know how long the house has been on the market? If it is a while then the vendor may be very open to offers. That said, you do not want to overpay (who does?).

Have you seen other properties in the area that are similar price and/or style, preferably being sold by other estate agents? This will give you something to compare against and you should have a better feel for the local market. You could then put in an offer you feel reasonable - and you can afford, less a bit (you need some wriggle room). Don't worry about the 10% I know two people who had their first offers accepted recently (about 18% below asking) and wish that they had offered less (they both also got a bit more knocked off when the survey was done).

MrGreenNewForest

Agree with the above. No matter how much you 'Love' the house there is no point in paying above market rate as it will catch up with you when you sell. If a similar property sold for £325k last December - then that's your benchmark. Discuss you findings with the EA and make an appropriate offer but be prepared to walk away if not accepted. You can always keep in contact with the EA every few weeks as your offer may not be accepted today but tomorrow is another day ............... as the saying goes.

Tren124

Thanks, 18% is much closer to what i would be looking to pay so that's encouraging.

I don't know how long it has been on the market.. at least the 6 weeks or so that i've been looking. Not sure how i could find out exactly how long?

There aren't really any similar properties on the market that i could compare it with to be honest. Most of the houses in that price range in the area are detached family homes, most of which would require lots of work / maintenance that i'm not looking to do. This is a fairly modern town house with communal gardens and has already been decorated to a standard i would be happy with.

I'm not in a chain, have a large deposit and mortage agreed that would easily cover the asking price. I'd like to use this to my advantage to negotiate the price down.

I was thinking of offering maybe £320 as a start point based on next door selling for £325 this time last year. Obvioulsy i'd expect this to increase but id like to keep it below £340 as i cant see how a kitchen and bathroom could add more that £15k to the value...

Does this sound reasonable?

rb7oaks

Sounds like a plan! As MrGreenNewForest said, be prepared to walk away, and just see how things go..... don't pay more than you really want. When you make your offer, explain your logic and don't mention your top price. The vendors may come back and say that nextdoor was not in such good order, which you will not know if/how far that is true, and then you could up your offer to £330 or something. The EA may also give you an indication when you make the offer as to whether similar offers have been made/rejected etc. before. All of which is good information. Good luck!

NyimaR

Tren124 wrote: »

I don't know how long it has been on the market.. at least the 6 weeks or so that i've been looking. Not sure how i could find out exactly how long?

You can ask the agent or download the property bee add-on for the firefox browser which shows you the property's history on rightmove. The only problem is that it doesn't show if it was on with previous agents.

Tren124

That Property-Bee is good, thanks!
It was first posted on 2nd August, sold STC on the 6th then Available again on the 10th..
Obviously something went wrong with the first purchaser.. i guess that might make my 'chain-less' position more appealing..

tawse57

Tren124 wrote: »

That Property-Bee is good, thanks!
It was first posted on 2nd August, sold STC on the 6th then Available again on the 10th..
Obviously something went wrong with the first purchaser.. i guess that might make my 'chain-less' position more appealing..

Rightmove is choc full in my area now of houses that went SSTC between May and August and which are now piling back on the market as available again.

This is probably because the buyers cannot get mortgages and/or because the bank surveyors are basically saying the asking prices is over what the house is worth.

An interesting thing to watch for desperate sellers is the length of time between a house going SSTC and it becoming available again - I have seen houses go SSTC in April/May and only come back available in August so, to me personally, it looks like people desperate to hold onto their one offer.


This is not financial nor legal advice.