How much do investors knock off the house price on average?

stanley2012

Can anyone advice how much an investor/buy to let buyer would want to knock off the asking price of a house? I have a person wishing to purchase but wants 10k off the price when it is already priced under stamp duty for a quick sale? Any thoughts would be appreciated!

marathonic

How long is a piece of string?

stanley2012

Very true but I was advised that people may ask for 5% off as an investor

marathonic

It depends. Any investor, in my opinion, that bases their offer on asking price shouldn't be investing in the first place.

Asking prices are numbers plucked out of the air by an estate agent or home owner. You could have an investor purchase a property at 20% below asking price and another paying asking price and the second to do better.

The offer should be based on potential yield, not asking price.

N1AK

The fact they are an investor is irrelevant to you. However the fact they may well:
> Be able to purchase very quickly
> Have no chain
Those are benefits they may be worth discounting for and they may well expect a discount for even if you don't.

CLAPTON

stanley2012 wrote: »

Can anyone advice how much an investor/buy to let buyer would want to knock off the asking price of a house? I have a person wishing to purchase but wants 10k off the price when it is already priced under stamp duty for a quick sale? Any thoughts would be appreciated!

obviously there is no rule; it all depends upon circumstances

if the property has been on the market for a year or so and there has been no interest then bite his hand off

what's the market like where you live?

RJP33

marathonic wrote: »

It depends. Any investor, in my opinion, that bases their offer on asking price shouldn't be investing in the first place.

Asking prices are numbers plucked out of the air by an estate agent or home owner. You could have an investor purchase a property at 20% below asking price and another paying asking price and the second to do better.

The offer should be based on potential yield, not asking price.

Correct, and also recent sale prices in the area are a key input.

Generali

I'd only sell to an investor at a premium. Many investors' advice I've read includes a 'chip', that is a last minute drop in the cash offered and a threat not to settle if not accommodated.

I'd rather sell to someone who is emotional about the purchase. That way I can put in a chip

IveSeenTheLight

Generali wrote: »

I'd only sell to an investor at a premium. Many investors' advice I've read includes a 'chip', that is a last minute drop in the cash offered and a threat not to settle if not accommodated.

I'd rather sell to someone who is emotional about the purchase. That way I can put in a chip

I feel it's a broken system that can allow a "chip" either way.
It's not like that in the Scottish market where the offer becomes legally binding once the missives are concluded.

IveSeenTheLight

stanley2012 wrote: »

Can anyone advice how much an investor/buy to let buyer would want to knock off the asking price of a house? I have a person wishing to purchase but wants 10k off the price when it is already priced under stamp duty for a quick sale? Any thoughts would be appreciated!

The market sets the rates.
The more interest in your property, the closer (or sometimes higher than) the asking price can be achieved)
The less interest, then the more room for negotiation is available between the seller and the buyer.

I have invested in property and there has been on occasion properties which I have been outbid by non investors.
I've been happy to walk away as the price paid by the buyers was more than would have been worthwhile as an investment.

Last year I lost out on a property I wanted to buy for rsidential purposes as the only bidder.
I first offered 6% under the asking price, then increased to 3% under the market price (property had been on the market for 6 months with no other noted interests in a position to offer).
I walked away and am now in the process of building my own home (planning permission has now been granted)

To finalise as I first set out in this post "The market sets the rates."

the_flying_pig

Generali wrote: »

I'd only sell to an investor at a premium. Many investors' advice I've read includes a 'chip', that is a last minute drop in the cash offered and a threat not to settle if not accommodated.

I'd rather sell to someone who is emotional about the purchase. That way I can put in a chip

it's not about emotion so much as it as about practical considerations - someone who's in a chain etc will usually have to complete, exchange, etc by particular dates or risk everything falling through & needing to start the whole rigmarole of buying & selling again. this gives a BTL-er buying from an owner-occupier the whip hand in any negotiations.

a BTL-er who's buying can afford to wait for, well, as long as it takes really.

so the idea that you'd "sell to an investor at a premium" is a bit, well, you can ask a premium of course, but there is still a risk that they'll at the last minute try to go so far below it that the premium is irrelevant.

if i had anything approaching a choice about who to sell to I'd strongly prefer an owner-occupier.

but i don't really think the OP was asking this relatively interesting question. the answer to the OP is, as always:

1 - if the asking price is on the low side, you might expect someone to pay above it;
2 - if the asking price is on the high side, you'd tend to expect someone to pay a fair way below it;
etc.