How much below asking price?

kilby_007

We're looking at houses at the moment. We could go up to £320,000 but we don't want to max ourselves out if we can help it. We've set a budget of £210,000 but if we need to stretch it a bit further we can.

We've seen some 4 bedroom houses, all built by the same builder and all roughly the same size, give or take about 100 square feet. They are all in the same area, ranging from £200,000 to £250,000. There's a few others around the £160,000 - £180,000 range but they have very small back gardens so we've ruled them out but it's good for price comparison.

We viewed a house yesterday at £200,000 which had much bigger grounds than any of the other properties. The only snag was they have a blanket ban on extending the properties towards the river and that rules out having a bigger garage, which is an essential for us as we need a big workshop.

We have had a look at a similar property with an external double garage but smaller grounds. They have priced this at £225,000. This is our favourite so far but a little over what we want to pay at asking price. We could manage it, just about, but obviously we'd like to try and get it cheaper.

None of these houses seem to be selling really. Most of them have been on the market between 6 months and a year. Some longer. Anyway, I'll get to the point. What price should we go in at on the £225,000 house? We're thinking 20% below asking is a little cheeky, so maybe 15% below at £191,000. I'm just thinking that given there's another property nearby with larger grounds for £200,000 we don't really want to be going over that if we can help it. Any thoughts?

EDIT: A little more background - the £225,000 house which we like best first went on the market June 2012 at an asking price of £240,000 - so they've already brought the asking price down by £15,000. I can't help thinking their expectations are a little high when compared to similar properties in the area.

The thing we have on our side is that we're FTB and have a mortgage in principle and proof of deposit. The house is empty so presumably they are desperate to get rid of it.

lincroft1710

kilby_007 wrote: »

We've seen some 4 bedroom houses, all built by the same builder and all roughly the same size, give or take about 100 square metres.

Do you mean 100 square feet. 100 square metres is the size of a 3 bed house.

Also when you say you could go up to £320K did you mean £220K

kilby_007

lincroft1710 wrote: »

Do you mean 100 square feet. 100 square metres is the size of a 3 bed house.

yes! Sorry! The properties are all in the 1350- 1450 sqFT range. Thanks!

comeandgo

Also you state at beginning your max price is £320k but looking at low £200k, is that also an error?

kilby_007

comeandgo wrote: »

Also you state at beginning your max price is £320k but looking at low £200k, is that also an error?

No, I've said we can borrow up to 320k but we don't really want to spend that much. We have set a budget of 210k but may be able to alter that slightly.

lincroft1710

£191K may be a bit low but you can justify this because it's been on the market for a year and the house with larger garden is on for £200K.

No doubt your offer will be rejected, but try to get an idea from the EA what price the vendor is looking for. Ignore any plaintive cries of "it's already been reduced by £15K", it may have been, but it still hasn't sold!

joujou

Ignore what the seller asked for and your budget, for a minute. Also ignore similar houses still on the market. 6 months on the market raises questions for me, 1 year definitely indicates a vastly overpriced place where the seller is not seriously interested in selling but just hoping.

Then objectively value the property for what you think it is worth. Check the land registry for recent purchases but take note of differences. Price the property objectively.

Then go back to the asking price and see where it lands you. If it's close than you have a chance. If it's not, you either have to give away lots of money or the seller has to accept a serious discount. There is no two ways about it. Lots of sellers are in it for the long haul hoping for rebound. If it was me I would get sick of the for sale sign quick but to each their own.

SG27

lincroft1710 wrote: »

£191K may be a bit low but you can justify this because it's been on the market for a year and the house with larger garden is on for £200K.

No doubt your offer will be rejected, but try to get an idea from the EA what price the vendor is looking for. Ignore any plaintive cries of "it's already been reduced by £15K", it may have been, but it still hasn't sold!

If the house with a bigger garden is £200k then I'd be looking at around £190k absolute tops. Bearing in mind the bigger garden house is likely to sell below the asking price. Also of its been on a Urartians its obviously overpriced. If they are asking so much more its likely they have unrealistic expectations

kilby_007

Thanks for your help guys.

I'm looking at sold prices now. There are a few that sold in 2010/2011 between 190k - 225k. The exact one we're looking at last sold in 2005 for 205k.

There was a house a few doors down from the ones we're looking at which is similar size but with a very small garden and that sold for £174k in Sep 2012. The asking price was £180k.

I reckon we should be looking to get the £225k house for £207k.

SG27

kilby_007 wrote: »

Thanks for your help guys.

I'm looking at sold prices now. There are a few that sold in 2010/2011 between 190k - 225k. The exact one we're looking at last sold in 2005 for 205k.

There was a house a few doors down from the ones we're looking at which is similar size but with a very small garden and that sold for £174k in Sep 2012. The asking price was £180k.

I reckon we should be looking to get the £225k house for £207k.

But the one with a larger garden is asking £200k. What makes this one worth more?

kilby_007

SG27 wrote: »

But the one with a larger garden is asking £200k. What makes this one worth more?

It has an external double brick garage. The 200k one has an integral garage. Then again, the 200k one also has a big garden. Man it's so difficult this property game. To get the offer right without offending anyone but without paying over the odds!