About to offer on a house... EDIT: negotiation in progress!

vaderag

I've been looking for my first house and we've just found a house that we want to offer on... we really like it and can (just) afford the asking price.

Everyone I speak to seems to have a different opinion on what to offer - some say just give asking, some say offer 10% below. I just dont know! 10% below seems an awful lot less, and would be great, but we really want it, so don't want to ruin any chances...

I do know that the house has been on the market a while at 25k higher than the current asking price, but as far as I'm concerned that shouldnt come into it - it just means that it was clearly on at too much!

Also, I dont think the sellers have found anywhere yet so arent in any rush...

Any thoughts?!
Thanks

bryanb

Offer 10% less, you can always increase your offer later.

brit1234

Go for 15% off but place this bid if Halifax goes negative this Thursday. If they don't accept you can increase to 10% off.

Catblue

Have you checked the recent sold prices for the street? That should give you an idea at least.

You can also make an initial offer (say 10% less) and then if it is rejected you can ask what the vendors realistically want for the house. They might not tell you of course, but if they say that they really want the asking price you could then make another offer of 5% under, for example.

There really is no limit on the number of offers you can make. If they still balk at 5% off the asking price then you can nudge up from there.

brit1234

Catblue wrote: »

There really is no limit on the number of offers you can make. If they still balk at 5% off the asking price then you can nudge up from there.

Its a fast falling market. Asking prices are expecting a reduction hence they have been raised to compensate.

I wouldn't consider a 5% reduction if I was buying in a falling and buyers market.

Jellee_2

My husband and I recently agreed a price on the house that we are in the process of buying (our first house!!) at around 91% of the current asking price, I know that this house has been on the market for months (around 5-6) and was only at a slightly higher price then.

We did a lot of research before we started offering on properties and Catblue gives good advice: looking at the recent sales for the street is a brilliant place to start. This doesn't always tell you the whole story though, if something sold 2 months ago for £20,000 cheaper than the asking price of the one you're looking at then it's worth a drive by to see if there is renovation work etc in process that would lead to it being cheaper, for example.

10% lower does seem like a lot when you look at the 1000s but the likelihood is that an offer that much lower will be rejected as first offers tend to be taken as a starting point for your negotiations, but I've read somewhere recently that the lower you start the lower your sale price seems to be and you just need to think: who would you rather have a few extra £££ in your back pocket? You or the vendor?? My husband was all for starting at 20% off and working up but I think our first offer was around 12% under??

It depends on so much though, local market etc (it's actually not so bad where we are, things are moving, albeit slowly, but the type of property we were looking for - something that needs work - isn't shifting as fast as the 'done up ones', so we had more negotiating room) so there is no generic answer (as you've said!) these forums are a great source of info though, I've learnt loads over the last couple of months of house hunting!

Oh! and you've said that you can 'just about' afford full asking price. I would be weary of stretching yourself too far in this market - if all goes south and you have to stay in the property will you be ok in it for the next 10 years? If interest rates rise will you still afford repayments? If prices plummet and you're stuck there how much will the negative equity you might be getting into affect you? I know getting a 'lower' price that we felt more comfortable with was important to us in case everything crashes. But I know nothing about your finances so this might be all speculation about nothing!:)

I've rambled for ages - sorry! Hope you can pick something vaguely useful out of all this!

Good luck and happy negotiating!:T

Catblue

brit1234 wrote: »

Its a fast falling market. Asking prices are expecting a reduction hence they have been raised to compensate.

I wouldn't consider a 5% reduction if I was buying in a falling and buyers market.

Not all vendors are the same. Some vendors are realistic; you only need to look at the huge range of asking prices themselves. There's a 4 bed detached house on our street with double garage priced at £320K. There is also a much smaller 3 bed detached with integral garage priced at £345K.

If I offer 15% less than asking price on the 3 bed, am I getting a bargain? What if I offer 20% less, does that make it an even bigger bargain?

Of course not. The 4 bed, on the other hand, is already decently priced at £320K.

It is the job of the buyer to do proper local research rather than just rely on getting a certain percentage off the asking price.

vaderag

Thanks for all the great advice everyone. The property in on at £250k, was reduced from £275k (although i'm trying not to take that into account). So people think i should start negotiating at £225? I'm scared that that will come across insulting...

lpp1980

vaderag wrote: »

Thanks for all the great advice everyone. The property in on at £250k, was reduced from £275k (although i'm trying not to take that into account). So people think i should start negotiating at £225? I'm scared that that will come across insulting...

Do you have a rightmove link?

Ignore the fact its been reduced already, just evidence it was overpriced to start with. Be firm and offer 10% off the list price. Who cares if it feels insulting, its the biggest finacial commitement you can make and you owe it to yourself to get the best possible price you can. You can always come back later with 7% off, 5% off.

Just some other quick advice as I was in a similiar situation recently.

• Don't come back with an instant offer if they reject your first. Create the illusion you have looked at other properties which also meet your criteria and that you have many options to consider. Don't appear over keen.

• Keep your offers 2-3 days apart. Let them stew, its a buyers market and I guarantee they will call you anyway once you've made an offer.

• Hammer home your strong position. Mortgage agreed, chain free, can complete within 4 weeks for the right price. Anything positive that applies to you. Make them see you for the quality of buyer you are. Agents want sales right now, they aren't looking to play mind games in this market.

• Been mentioned, but check how much it was bought for on nethouseprices.com and how long its been on the market (property bee). Use this data in your negoatiations.

I say all this because I had a offer rejected intially on my house. I left it three days, was called back and they accepted it. I was considering an improved offer too, but I didn't need too.

Hope it goes well.

vaderag

Unfortunately it's not on any of the house price sites as the current owners have had it for a while...

It's been on the market since June, and I appreciate I'm in a very strong position, but i worry also since it sounds like they don't have somewhere sorted yet, so they're in no rush to move...

Robert_Sterling

vaderag wrote: »

Unfortunately it's not on any of the house price sites as the current owners have had it for a while...

It's been on the market since June, and I appreciate I'm in a very strong position, but i worry also since it sounds like they don't have somewhere sorted yet, so they're in no rush to move...

You can check on www.nethouseprices.co.uk

It will show the "sold" prices for nearby houses over the past ten years.

www.zoopla.co.uk is also sometimes helpul.