Placing 1st offer

Matte_2

Hi,
I have viewed a house in our dream town for my ever growing family. It's a four bedroom on at £189,950 and been on the market for nearly a year. However when viewing it, it is obvious that it hasn't been cared for for quite a while (broken windows, dog mess everywhere, fleas, no banister, garden destroyed). Because of this, to make it a home and not just a building my wife and I feel we need to put in a much lower price because of the work to be done. We see about 40k's worth of work. What are people's thoughts in offering over 40k less than asking price?

DVardysShadow

What does asking price have to do with it? The offer should be based on £k40 less than the value with the work done, I would think.

Now if the asking price reflects the value with the work done, then you are about right. But if the price is already discounted because of the condition, then you are expecting too much of a drop.

And by the way, these calculations are more related to determining the 'walk away' price where if £1 more were asked, you would walk away. Always pitch your first offer below the walkaway price, because the first offer is almost invariably rejected.

Matte_2

Quote: But if the price is already discounted because of the condition, then you are expecting too much of a drop.

Thanks DvardysShadow.

Other houses are going for more locally, but definitely not 40k more.

AlexMac

£40k or just over 20% off the asking price seems hard to justify based solely on the remedial spec. which you mention (windows, dog mess, fleas, banister, garden) which sound more like a £few thousands of minor repairs or cosmetics. So argue on a broader basis; as I said in another post, do your research before any offer; check Zoopla or other websites for sold prices and when comparable properties sold, current values and their recent trends graphs for values in the street concerned.

You might be surprised- in many areas, prices have dropped 20% since their 2007 peak, sales have slowed and properties are not selling as fast as they did (you can see on the websites when the property was 1st marketed) but many vendors still have unrealistic expectations. You can then go to to agent to say what your offer is based on, orally, or better still in writing; the stuff about values and the cost of necessary work. If you also spell out what a good buyer you are (potential lender identified, mortgage offer agreed in principle, evidence that you have deposit funds in place, named solicitor identified so the agent can write up the 'memorandum of sale' the day they agree..?) you will talk up your appeal.

I did this recently and the agent was able to say to their client that the offer was logical and the buyer robust (thus making more palatable my offer of £150k on a home which was up for £160k, and already had been cut from £175k. I got it for £152k, which is not quite as big a drop as the one you hope for, but then, its a buyers market and it has been on sale for a year. Good luck