What is a good opening offer on 230k House?

united4ever

Really like a house, on at 230k reduced recently from 240k. The owners say they've had no offers. It is a traditional semi, really well presented. The owners are a retired couple who seem in no particular rush to move, they are downsizing. I have a buyer for my flat and am upsizing.

I asked the agent to what extent they would be open to offers. I was thinking of an opening offer of 208k - he seemed to think they might take 225k. Looking on Zoopla it seems that similar houses on that street do seem to go for 225k plus. However 225k would be such a big stretch for me and I know it's normal to play this negotiating game so if I make an opening offer for 208k with a view to getting it for under 220k does this sound like a realistic plan? The property is a few miles from Solihull.

DVardysShadow

You have nearly done it, but you do need to decide on your exact top limit - the walk away price - before you think too hard about your strategy for getting the house at less than that price. I would suggest you offer closer to your limit, making it very plain that there is not a lot of margin left

somethingcorporate

I would completely disagree with the above (but accept some people will want to do this to stop all the tooing and froing and potential embarrassment caused by giving low offers). But I would start as low as you possibly can, I would suggest £190k would be a decent starting place and move up as (and when) you get rejected. It's your money you are offering so treat it like you don't want to spend it!

If you can get it for a steal then brilliant for you, if you have to move up to your limit then so be it but if there is a chance you can get it for a bargain price there is no point in overpaying if you do not have to.

Starting close to your limit gives you absolutely minimal wiggle-room and puts them in the driving seat. First offers are normally always rejected out of hand which will put you right at your top limit straight away. You can always move up from a low base but back tracking when you realise you may have overpaid is a lot harder.

Edit: I paid £248k for a house on at £285k. We negotiated hard and got a bargain. Would I have paid more? Yes! but why should I if I can get them to accept a lower offer.

DVardysShadow

somethingcorporate wrote: »

If you can get it for a steal then brilliant for you, if you have to move up to your limit then so be it but if there is a chance you can get it for a bargain price there is no point in overpaying if you do not have to.

Starting close to your limit gives you absolutely minimal wiggle-room and puts them in the driving seat. First offers are normally always rejected out of hand which will put you right at your top limit straight away. You can always move up from a low base but back tracking when you realise you may have overpaid is a lot harder.

While I agree that you would want to get it for a steal, with retired people looking to downsize, it is unlikely to happen. They probably will not need to move to a timetable, they will feel well able to sit it out. Also, all the evidence is that OP and the market and the sellers are in rough agreement that the value will be in the 220 - 225 area. Setting a top limit is the guard against over offering and is fairly central to protecting yourself from over offering - rather than bidding where your own plans are open ended.

Granted the first bid is always rejected - I think going in too low will mean OP will be offering a lot higher quite quickly, which sends the message that there is more where that comes from

united4ever

Yeah, I appreciate these points. Related to this, after the first offer has been rejected, how long do you leave it for the second offer then third offer and so on. If my first offer is rejected at the start of the day is it bad to make my second offer at the end of the same day?

sinbad182

Agree with the above. Overly low first offers do nothing but show you have tens of thousands of pounds manoeuvring space.

Better_Days

We viewed a property last year that was up for £235k, we didn't offer as we thought it needed too much doing to it.

In retrospect it was the 'one that got away'. It went for £193k! Could have kicked myself when I saw the sold price. Would have happily paid that for it. It was being sold by a builder who had taken it in part exchange and just wanted to get rid of it.

A lot depends on the vendors circumstances. Got a £245k offer rejected on a £290k AP last week. Property been on the market for well over a year, and over-valued by EA, so we gave it a shot. I don't want to make low offers willy nilly, but I have learnt from the experience of the first house. You just never know.

But as somethingcorporate says - know your 'walk away' price before you start, and be aware that other offers may miraculously appear, you don't want to be bidding against yourself.

somethingcorporate

All the above goes to show that it's really hard to gauge what is the best way to approach it!

Start somewhere in the middle with some wiggle-room but not taking the mick.

We made an offer on a place that was up for £300k but needed loads of work, we offered £250k which looked cheeky. It took another 18 months to sell and guess what price it went for? £250k.

united4ever

In this case I don't think the vendors are in a big rush or desperate to sell. When they showed us round you could tell they were really house proud and had spent a lot of time, money (two storey extension) and a lifetime of memories there. So I don't think they would be up for a 'cheeky' offer below 205k, you never know but I cannot see it myself.

somethingcorporate

The worst that will happen if you give a cheeky offer is they will say no.

If you then offer at an acceptable price to them they are not going to turn it down just because your first offer was below their expectation!

DVardysShadow

united4ever wrote: »

Yeah, I appreciate these points. Related to this, after the first offer has been rejected, how long do you leave it for the second offer then third offer and so on. If my first offer is rejected at the start of the day is it bad to make my second offer at the end of the same day?

It is how you play this which is most important. If your first offer is rejected, you should not put in another without a counter offer. So you should say something along the lines of 'If they are not selling for <£X>, what would they be prepared to sell for?' If the agent says 'Asking price', you say 'Well clearly we cannot strike a deal if the vendors are insisting on asking price' and you walk away and see if they get back. If the Agent says 'They are expecting offers much closer to asking price' [which is subtly very different], you say 'So how much, specifically, would they accept?'.

Once you have a counter offer, take your time to think and make a new offer when you are ready, but without the need to play 'hard to get' games over when you put in a new offer.