How much to offer?!

buzzyzoe

Hi all,

I'm new to the forum, and totally new to house buying! I live in North London at the moment, in the Bounds Green area, but am looking to move to Seven Sisters a few miles away.

I'm still at home with my parents at the moment, so will be chain-free if I do buy somewhere. I will also be a cash buyer if I can find somewhere to my budget. Apparently both these factors will give me a strong buying position.

I've chosen Seven Sisters because it's a cheap area, but still has excellent transport links (Seven Sisters tube is on the Victoria line, and is 3 stops from Kings Cross)

I've found a place that I'm interested in, that is currently on the market for £167,500, but was first listed at £179,950. According to Property Bee, it's been on the market since October 2012, which seems like a good sign that they might be willing to take an offer, despite it already having been reduced.

My question is what is the lowest I can go without !!!!ing off the seller? I was thinking of going in around £147,500, with the conditions that I'm chain free, a cash buyer, and willing to work to their schedule in terms of when to move.

Other similar properties in the same area have gone for between £140,000 and £170,000.

I've read a whole range of advice, suggesting that anywhere between 30% below market value and 5% below is a good place to pitch your first offer, but a lot of this advice is from a few years ago, and doesn't take into account the London property market.

Does anyone have any advice on this particular situation? Anything will be greatly appreciated!

Zoe

NervousHomeowner

FTB here as well so I hope my reply is helpful & not full of rubbish!

We were under the impression when we were looking that there is no 'right' amount to offer, you just offer what the property is worth to you. If you think the property is worth £147,000 to you then that is what you should offer Take into account what other properties in the area are going for, how much work needs doing to the property and whether or not you'd be sad to lose the property if your offer was beaten by someone else.

Also, be aware that while the house has been on the market for a while, they have already reduced their asking price by a fair amount, so may not be in a position to go down any further. Also, while having been on the market for a while might mean they'll accept a lesser offer, it could also suggest that they don't need a quick sale & can wait out for a higher offer, or that they might have unrealistic expectations/have turned down other offers in the past.

Do you know if you can get any further info on the vendor from the estate agent? They are not always forthcoming but it can be a good way to gauge how much to offer/whether your offer will go down well. For example, we saw one property that we really liked and were going to put an offer in on. However, we found out from the estate agent that the vendor had already turned down 3 high offers that week. Therefore we knew that our idea of what the property was worth & the vendor's idea of what the property was worth simply weren't ever going to match up, and we chose to walk away.

starbarboy

Hi Zoe

It's always difficult knowing how much to offer on property. As you mention, you are in a strong position being chain free and a cash buyer. However much depends on the sellers motivation to sell and how low they are able to go as much as how low they are willing to go.

The offer you are considering does seem very low, although I guess you don't know unless you ask! On the other hand they may not see you as a serious buyer if you offer too low.

I think you have to look at what other similar properties are and base it on that. If it is me then I would decide what value I believe it is worth - regardless of what it the sellers agent says its worth - then start off with an offer about 10% below. Anything I between is a bonus.

Good luck whatever you do and hope you get it.

Stephen

ognum

maybe the reason it's been on for so long is because they won't accept offers!

buzzyzoe

Thanks for the replies all!

Nervous Homeowner, A lot of what I've read says go with what you feel it's worth as well. The property is relatively new, so no real work, but I wouldn't be devastated if I lost it. Very true as well that they may be in no rush and may have turned down other offers. I will ask the estate agent what the situation is with that. Either way, the worst they can do is say no!

Starbarboy, I am worried that if I go too low, they won't consider me at all. However, I think I'd rather have the chance of getting a bargain versus the chance that they will reject the offer and not consider any further offers.

I've done my best to see what similar properties in the area are worth, it is quite difficult though, as prices seem to vary a lot on properties that seem very similar to me! Maybe the longer I look, the more obvious it will become what makes one property stand out from the rest.

Based on some of the advice I've received, I was thinking maybe an opening offer of £150'000 instead, as this sounds better I think. However, this leaves me with less room to manoeuvre in terms of how much I can go up. It's all very confusing!

robatwork

Take 10% off and start there

moneyistooshorttomention

As you can afford a house at that price without a mortgage (ie you said you are a cash buyer) - then wouldn't it be worth looking at what price level of house you can afford WITH a mortgage? Guessing you could look up to around £250,000 if you are prepared to have a mortgage and that would get you a rather better house and, with that, you might not need to move on later.

buzzyzoe

I'm not sure I'd be able to get a mortgage, as my work is freelance most of the time, and I've only been working for 18 months (before that I was at uni). I'm also not sure I'd be able to afford a mortgage plus bills, my earnings are fairly low, which is why owning outright is so appealing to me.

NervousHomeowner

buzzyzoe wrote: »

Thanks for the replies all!

Nervous Homeowner, A lot of what I've read says go with what you feel it's worth as well. The property is relatively new, so no real work, but I wouldn't be devastated if I lost it. Very true as well that they may be in no rush and may have turned down other offers. I will ask the estate agent what the situation is with that. Either way, the worst they can do is say no!

Starbarboy, I am worried that if I go too low, they won't consider me at all. However, I think I'd rather have the chance of getting a bargain versus the chance that they will reject the offer and not consider any further offers.

I've done my best to see what similar properties in the area are worth, it is quite difficult though, as prices seem to vary a lot on properties that seem very similar to me! Maybe the longer I look, the more obvious it will become what makes one property stand out from the rest.

Based on some of the advice I've received, I was thinking maybe an opening offer of £150'000 instead, as this sounds better I think. However, this leaves me with less room to manoeuvre in terms of how much I can go up. It's all very confusing!

If the property is relatively new and needs no work, and the price doesn't necessarily seem out of place for the area, why are you considering such a low offer..? Is there something that makes you think it is only worth that amount or is it just the chance of a bargain? Are you not in a position to offer the AP which is why you are trying to get a lower offer accepted? What I'm really asking is how you came to that amount as an offer?

Obviously you're totally at liberty to put in any offer you want and if the property is only worth £150,000 to you then that's that but I think that's a very low amount to offer for seemingly no real reason (I personally would only be offering that amount if the property needed some serious work). Out of interest, what is the most you would be willing to pay for the property?

With regards to property prices etc. how long have you been looking? I was looking for a good 6 months before we began actually thinking about buying and I think that gave me a better idea of the local market & pricing. If you're still struggling to see why certain properties are priced differently, try looking at the finer details (Do they have outside space? Original features? Have they been renovated? Is there a new kitchen? New bathroom? Are they on a certain street? Is the property south facing? Is the floorplan weird? Are the rooms an odd shape or size? ).

A good idea my partner's mum gave me was to, if possible, go and view a number of properties in the same building or on the same street and compare them. It will soon give you a good idea of why something is priced at, say, £125,000 and why something else is only priced at £115,000.

buzzyzoe

NervousHomeowner wrote: »

If the property is relatively new and needs no work, and the price doesn't necessarily seem out of place for the area, why are you considering such a low offer..? Is there something that makes you think it is only worth that amount or is it just the chance of a bargain? Are you not in a position to offer the AP which is why you are trying to get a lower offer accepted? What I'm really asking is how you came to that amount as an offer?

Obviously you're totally at liberty to put in any offer you want and if the property is only worth £150,000 to you then that's that but I think that's a very low amount to offer for seemingly no real reason (I personally would only be offering that amount if the property needed some serious work). Out of interest, what is the most you would be willing to pay for the property?

With regards to property prices etc. how long have you been looking? I was looking for a good 6 months before we began actually thinking about buying and I think that gave me a better idea of the local market & pricing. If you're still struggling to see why certain properties are priced differently, try looking at the finer details (Do they have outside space? Original features? Have they been renovated? Is there a new kitchen? New bathroom? Are they on a certain street? Is the property south facing? Is the floorplan weird? Are the rooms an odd shape or size? ).

A good idea my partner's mum gave me was to, if possible, go and view a number of properties in the same building or on the same street and compare them. It will soon give you a good idea of why something is priced at, say, £125,000 and why something else is only priced at £115,000.

It's mainly for the reasons that I'm a no chain, cash buyer who can totally work to the buyers time frame. That puts me in a very strong position as a buyer. Realistically, I can't afford much more than around £155,000 at the absolute maximum, so that would be my very top offer, and I've heard it's better to offer less initially and then build up to your maximum.

I know it's a cheeky offer, and I think the chance of it being accepted is pretty low, especially as I think it's owned by someone who rents it out, rather than someone who actually lives there, suggesting they will be able to hold out for a higher offer.

However, I definitely wouldn't go higher than £155,000, even if it meant losing the opportunity, because I just can't afford it, and there are other properties available for that kind of price.

I have been looking sporadically for the last year, but I should probably view more properties to get a better idea of why they are worth what they're worth. The majority of places I've found are extremely similar, no garden, bathroom, bedroom, living room, kitchen, similar square footage, similar decor etc. I definitely think the more time/experience I have on my side, the better!

NervousHomeowner

buzzyzoe wrote: »

It's mainly for the reasons that I'm a no chain, cash buyer who can totally work to the buyers time frame. That puts me in a very strong position as a buyer. Realistically, I can't afford much more than around £155,000 at the absolute maximum, so that would be my very top offer, and I've heard it's better to offer less initially and then build up to your maximum.

I know it's a cheeky offer, and I think the chance of it being accepted is pretty low, especially as I think it's owned by someone who rents it out, rather than someone who actually lives there, suggesting they will be able to hold out for a higher offer.

However, I definitely wouldn't go higher than £155,000, even if it meant losing the opportunity, because I just can't afford it, and there are other properties available for that kind of price.

I have been looking sporadically for the last year, but I should probably view more properties to get a better idea of why they are worth what they're worth. The majority of places I've found are extremely similar, no garden, bathroom, bedroom, living room, kitchen, similar square footage, similar decor etc. I definitely think the more time/experience I have on my side, the better!

Aah okay, I think I understand better now In that case, if you really can't afford above £155,000 obviously an offer of £150,000 is a good idea as, like you said, it does leave room for negotiation. I hope they accept and you get your house!

And yeah, actually viewing properties definitely makes it easier to see why they're priced how they are, at least it did for us