What do you consider an acceptable amount to offer below the asking price?

serious_saver

We have decided to stick very rigidly to our budget when we buy our house/flat.

After seeing a broker we've realised how much more it will cost if we go over this because of the change in LTV.

Obviously most vendors are open to offers so I will be looking at properties just over our budget but I was wondering what people consider an acceptable amount to offer below the asking price? It will give me an idea of the point at which houses genuinely above what we can afford.

CloudCuckooLand

Through most of last year the figure of -10% as a starting point was very common.

-7% was the last "gap between asking and selling prices" I saw nationally. Which makes sense if people started around -10% and got talked up a bit during negotiation.

Around November, selling prices were 20% below asking prices, in London...because the vendors had deliberately over-priced, realising they were going to get knocked down by 10%. Which buyers spotted and only bought where the vendor shifted most...

Obviously there will be a regional bias, so get to know your market. Use online details to see what asking prices were for specific properties and what they then sold for, where possible.

The problem is, 1 house might be prepared to shift by 8% - because they have over-priced in order to give some away to appear positive to their buyer. While, on the other hand, another vendor might refuse to shift by 2%, which a buyer thinks of as negative and scupper their budgeted plans, but in fact the price is already realistic...

...you really do need to know your market.

claire70

I agree with the above. We are both selling (asking price of 300k) and buying (prepared to go up to 450k). We have had several offers of between 30 and 50k below our asking price, BUT we have already reduced by 20k since we started, and are now at a VERY fair price for a property of our type in our area. So I consider those offers to be extremely cheeky, and made by people who haven't done their research properly.

At the other end, I would ordinarily offer about 20k less to start with, and go up depending on the price, how much I wanted it, and what we can get for ours of course. I might make an offer of 50k less if the asking price seemed to be an overvaluation.

What's frustrating from a sellers point of view is that people don't seem to have much idea of what is a reasonable offer (looking at what else in the ara has sold recently) and what is just trying it on. They seem to forget that we have to be able to afford a house too!

Running_Horse

Depends what you think it is worth.

It could be overpriced or a bargain. The vendor might be desperate or not in a hurry.

I assume you are doing your homework and know what you think a house you want is worth.

tyler80

We offered 12% under asking then upped that to 10k under. Both rejected straightaway

Property has been reduced by 10k already but has also had two sales fall through. We're not in a rush or desperate so won't increase our offer again.

Also conscious of the fact that as first time buyers the valuation needs to agree with asking for our LTV to remain reasonable.

serious_saver

Thanks I'm lookign to spend £140,000 max as a ftb. there are a lot of 2 bed houses in my preferred area at that price but I know my sister bought one a few months ago for £115,000 and a friend bought 12 months ago for £119,000. I was hoping to get a 3 bed but they all seem to be priced over £160,000.

G_M

I was wondering what people consider an acceptable amount to offer below the asking price?

Impossible to say without knowing the property, its condition, the location, the asking price, the urgency to buy, the degree of match with the buyer's requiremnets.........

FATBALLZ

asking prices are a bit of an irrelevance to be honest, you should offer what you think it's worth, rather than some figure vaguely in the right ball park (although sometimes not) tacked on by an estate agent. Although if you're offering more than 20% under asking price it's unlikely you'll strike a bargain with the seller.

myhouse_2

claire70 wrote: »

I agree with the above. We are both selling (asking price of 300k) and buying (prepared to go up to 450k). We have had several offers of between 30 and 50k below our asking price, BUT we have already reduced by 20k since we started, and are now at a VERY fair price for a property of our type in our area. So I consider those offers to be extremely cheeky, and made by people who haven't done their research properly.

At the other end, I would ordinarily offer about 20k less to start with, and go up depending on the price, how much I wanted it, and what we can get for ours of course. I might make an offer of 50k less if the asking price seemed to be an overvaluation.

What's frustrating from a sellers point of view is that people don't seem to have much idea of what is a reasonable offer (looking at what else in the ara has sold recently) and what is just trying it on. They seem to forget that we have to be able to afford a house too!

Interesting to hear your perspective. I suppose I'd be one of the ones who make a cheeky offer (not that I've done it yet). But a house on at around 300k in a falling market is getting close to 250k stamp duty limit. Not many buyers want to pay 260-280k.
Possibly the fact that you have received a number of offers all in the same region indicates that the buyers have been doing their homework and have decided that's what it's worth. Perhaps that is why no one has increased their offer. One of the main problems about a falling market is that buyers tend to not buy because they're busy waiting for prices to continue down.

claire70

myhouse wrote: »

Interesting to hear your perspective. I suppose I'd be one of the ones who make a cheeky offer (not that I've done it yet). But a house on at around 300k in a falling market is getting close to 250k stamp duty limit. Not many buyers want to pay 260-280k.
Possibly the fact that you have received a number of offers all in the same region indicates that the buyers have been doing their homework and have decided that's what it's worth. Perhaps that is why no one has increased their offer. One of the main problems about a falling market is that buyers tend to not buy because they're busy waiting for prices to continue down.

But that's just it, they haven't done their homework at all. Houses like ours in our area usually go for something between 310 and 325. So why do they think ours is overpriced at 300???

Two further general questions to everyone:
1. why is there this perception that it's a falling market? According to all the newspaper reports I've seen, it's a static market. One report might say prices went up 1% last month, the next might say they've gone down 1% - but nothing is *really* changing. It's not a major crash. Are buyers trying to engineer a crash by putting in stupid offers?
2. I've heard this figure of offering 10% below asking price bandied around several times now. Where is this coming from? Can anyone give me evidence for this or is it just hearsay?

pinkshoes

serious_saver wrote: »

Obviously most vendors are open to offers so I will be looking at properties just over our budget but I was wondering what people consider an acceptable amount to offer below the asking price?

How long is a piece of string??

Percentages are for mugs, and are generally useless.

1. Use Property Bee

2. Find out what they paid for the property and when on https://www.houseprices.co.uk (if they bought ages ago, then chances are they have more equity and thus can perhaps drop lower if needs be, so more room for negotiation),

3. Look what other similar properties have sold for.

4. Try and find out why it's being sold. (i.e. are they in a hurry or not)

Some people price to sell, others put a high price to push their luck, others put a high price as they're in no hurry.

Research each property thoroughly, and base your offer on your findings.