How to approach the opening offer on a house which has been drastically reduced?

Smudger78

Hi,

Having been casually looking for over a year we have seen a house which seems to tick all the boxes for us. We are viewing next weekend and have spoken to the agent and got some background on the property. In short the property has been on the market since April but has not sold so has had the asking price reduced twice, initially from £285k to £265k and more recently, when we noticed it to £235k. The sellers are moving to a new build and the developer was that keen to do the deal with them that they stepped in and bought their house so it is the developer now selling the house.

The house looks in good condition from the photos however the garden needs a lot of work as it hasn't got a blade of grass and we'd like a lawn for our son to play on. Also there is a very large garage which takes a lot of space up at the back of the house so we may want to reduce the size of this to increase the size of the garden at the back. My friend is a builder so my plan would be to take him to a second viewing to get his view on the work required reducing the garage and renovating the back garden. The potential cost of this would then obviously influence any offer we make.

Our position is that our house will go on the market in the next week, we've decided to go with house network after reading comments and reviews here and elsewhere. We've also spoken to our bank and have been told the additional lending we'll need wont be an issue so once we've put in our application
(this week) we should have a "mortgage in principle" from them next week.

So my question really is how would you approach the viewings and potentially making an opening offer? Given that the price of the property has dropped as much as it has do you think the usual 10% rule would apply? I was thinking that depending on the potential cost of work with the garden an opening offer of £220-£222k might be reasonable. I am concerned that the house does now appear to be under priced (having looked on Zoopla etc at sale prices of other properties on street) so could attract a lot of interest. Given this I wouldn't want to miss out by making a ridiculously low offer. Also given our position (need to sell ours before we can buy) the vendor probably wont be willing to accept the offer and take the house off of the market but I guess what I would be looking for would be for them to accept an offer "in principle" - am i being realistic here? Do you think there is any way we would be able to secure the property before selling ours by cutting some kind f deal with the vendor?

Any comments/advice would be appreciated.

Smudger

camptownraces

There isn't a usual ten percent rule.

Given the circumstances you've described and how long you've been looking ...

Offer what you think it's worth, bearing in mind what your builder friend tells you about the works you want to carry out..

hazyjo

Compare against recent sold prices of similar properties. As you've discovered, the asking price can be misleading. The changes you want to make to the property are somewhat irrelevant - although, fair enough, anyone's likely to want to turf the garden. Would have thought that it was priced to take that into account already. Not always the case though - sounds like it was heavily overpriced to start with!

Don't make an offer until you have an offer on yours. You're not proceedable (presuming you need to sell yours to buy this one). In this market, especially with something having taken so long to sell, they'd be mad to take it off the market, even for the asking price. If it's that low, it might attract a bidding war.

Also, you don't want to agree a price, only to find it takes 6 months to sell yours. If still available, the house you want will appear more desirable to others as there'll be an offer hovering over it, plus the sellers are probably less likely to reduce the asking price during the time it takes to sell yours if they have an offer on it. Also, would you be wanting to offer the same price if it does take 6 months? I doubt it.

Good luck - but don't get your hopes up! Price yours realistically to sell and it will sell.

Jx

Fortheloveofmoney

We've just bought a new build and part exchanged our old house so I thought I'd tell you what happened to our old house.

We had our house on the market from April last year and received offers at around 10k below the asking price. We accepted but the buyers messed us around so we ended up part exchanging with a builder.

Anyway the builder took on our existing agent and employed another and reduced the asking price down by 10K which is about the right price for the house. Within hours the place was crawling with people and they received at least 2 offers that we know of.

Within 2 days they had accepted an offer of 5k under the new asking price from a cash couple.

They always price houses very competitively as they just want to get rid of it asap. You may be disappointed if you haven't got an offer on yours yet as they probably won't accept if you can't proceed. You never know though so it's worth a try.

Smudger78

Fortheloveofmoney wrote: »

We've just bought a new build and part exchanged our old house so I thought I'd tell you what happened to our old house.

We had our house on the market from April last year and received offers at around 10k below the asking price. We accepted but the buyers messed us around so we ended up part exchanging with a builder.

Anyway the builder took on our existing agent and employed another and reduced the asking price down by 10K which is about the right price for the house. Within hours the place was crawling with people and they received at least 2 offers that we know of.

Within 2 days they had accepted an offer of 5k under the new asking price from a cash couple.

They always price houses very competitively as they just want to get rid of it asap. You may be disappointed if you haven't got an offer on yours yet as they probably won't accept if you can't proceed. You never know though so it's worth a try.

Thanks for this. I am concerned that the scenerio you describe above is a real possibility so I am intending on asking whether the developer would be interested in another part exchange. I realise they may not be but its worth a try I guess!

cattie

As you haven't even got your house on the market let alone a buyer for it, I can't see any vendor accepting any kind of offer from you at the moment, even if it were a pretty good one.

Even though you say you intend putting your house on the market soon, you say it will be through house network rather than a high street ea, which will in all likelihood take longer to sell you your house than using a conventional ea. If it were me and I was in a hurry to sell, I'd use the high street ea, who will usually have lots of names on their books of people looking in your area and price range and I'd price very keenly.

moneyistooshorttomention

camptownraces wrote: »

There isn't a usual ten percent rule.

.

My sentiments exactly.:T

FireWyrm

Its not a washing machine. Houses are worth what someone is prepared to pay for it. Offer what you consider to be a reasonable price based on local sold values, trends and market.

They'll accept or decline. It's called 'negotiation'

Smudger78

cattie wrote: »

As you haven't even got your house on the market let alone a buyer for it, I can't see any vendor accepting any kind of offer from you at the moment, even if it were a pretty good one.

Even though you say you intend putting your house on the market soon, you say it will be through house network rather than a high street ea, which will in all likelihood take longer to sell you your house than using a conventional ea. If it were me and I was in a hurry to sell, I'd use the high street ea, who will usually have lots of names on their books of people looking in your area and price range and I'd price very keenly.

Wrt to using the local EA did consider this but then read such bad reviews about the most prominent local EA that it put me off. This combined with the good reviews on here for House Network persuaded me to give them a go - I guess we'll see whether it was the right decision or not in time...

undetterred

Why should the garage being too big for your needs mean a reduced offer?

Smudger78

undetterred wrote: »

Why should the garage being too big for your needs mean a reduced offer?

Suppose it depends on your point of view. It is being marketed as a "family home" but doesn't have a "family garden". Instead it has an oversized garage whcih takes up most of the garden and the rest of it is flags and gravel. This has put people who have viewed it off (hence the reduction in price) and the agent mentioned it when we arranged the viewing so they are clearly aware of the issue.