How far bellow asking price should can you offer if a house has been on the market f?

Mrs_Rachel_Trelfa

Hi everyone,

Newbee here. Have been poking around for a while but have just signed up so I'm a little unsure on how everything works so please bear with me.

I have been looking on here and online generally and cannot seem to find the answer a question I have. From what I have read u think I'm right in thinking that a first offer should be about 10% below asking price? And I know that percentage can depend on a number of factors. What I am hoping you guys can help me with is if a property has been on a while how far can you go down?

I have recently got married and my husband and I are putting the monetary gifts we asked for towards our deposit and we really want to own our own home. We have been to banks and have mortgage in principal (think that's what its called) and our deposit is practically all there too. We have been looking at houses and we have found one we like. It wad first listed 13tg April 2012 for £129,950 and the price has dropped to £124,950 on 7th June 2013. We still feel that the current asking price is a little high for what we believe its worth and it needs a bit of work doing, mainly to bring up the epc rating. The current owners say they want to sell as they have a baby and need somewhere bigger.

What I was wondering is how low can we offer. We want our offer to be taken seriously but dont want them to think we are not serious. We are renting atm so obviously no chain and can just up and move.

Sorry for the long post.

Mr_Moo_2

Welcome and congratulations.....

Been on the market over a year -overpriced, pure and simple. so be willing to offer low. There is no preset amount - so do your research - what other properties are selling in the locality and for how much. Then offer accordingly. Rightmove, Nethouseprices are good resources for actual sold prices.

Obviously the vendor can always say no .....

DRP

Agree with Mr Moo - do your research on sold prices, keep a close eye on similar properties and how much they are on for (and how quickly they sell)

Also check when the vendors bought the place and how much they paid - does the asking difference reflect work they have done or local market trends or are they trying to avoid negative equity (ie. they simply cannot lower the price too muich, for financial reasons)

Mrs_Rachel_Trelfa

Thnks, sorry there was a typo in all my excitement of first post. It should have said first listed in November 2012.

Most on the street are 2 beds and recent sale prices are about 105,000 - 115,000. But this has been extended and is a 3 bed and bigger kitchen because of the extension. Have been researching all week and the last 3bed house sold on the same street almost 12 months ago. Can I still quote that figure when justifying my offer or wait for the counter offer before giving reasons. All a bit overwhelming and confusing. I was thinking a cheeky 110,000 - 115,000 but the hubby thinks thats taking the !!!! and we won't be taken seriously.

cattie

As Mr Moo says, you need to find out what similar houses in the area have sold for, not what they are listed for sale at.

You might find that the vendors need a certain amount for the house to enable them to be in a position to buy their next property & if that's the case then there might not be so much room for negotiation.

The trouble with the 10% argument is that 10% on a low value house hits harder than it would on a much higher value house, so vendor's may not be willing to drop by quite so much.

You can only try however & I applaud you for being the kind of person who wants to take care not to offend with your first offer! Some people just barge in with ridiculous offers & then wonder why as they gradually up their offers the vendor still says no until they are practically at asking price. If they had made a reasonable offer first time round then it might just have been accepted & saved themselves a few thousands.

cattie

I don't think you can really compare a house that sold 12months ago with this one unless the market has been really stagnant in your area.

Also I don't know about where you live but here in London an extra bedroom can push the value up by an extra £20k.

Personally I think the offer you want to give is far to low & I'd not be ready to accept that.

Not all vendors give counter offers, I never have, leaving it to the other party to come up with a figure much closer to the asking price if they really want the house.

Davesnave

They haven't yet dropped 5% in their 8 months on the market, so the chances are that these vendors aren't in a hurry, or need a set price to reach their target property.

The only 'reason' you need to justify what you offer is that no one else has apparently wanted to purchase this house at the advertised price. I'm not saying don't have reasons; far from it, but don't expect the vendors to acknowledge them.

As to what to offer, remember that some who offer advice here live in London or the South East and have a somewhat different experience of the market. You need to study your own and see how it's moved in the past year or so. Where I am, things are quiet, so the optimistic stuff, promulgated by agents in the local rag etc is largely BS, just as it was last year!

The_Earl_of_Streatham

Consider, too, that most people will reject the first offer and make at least one try to get more, even if only for the challenge.

I_have_spoken

the price has dropped to £124,950 on 7th June 2013.

Well, they finally twigged that pricing just over stamp-duty was a bit daft as many peeps will not search above £125,000.

mainly to bring up the epc rating.

That doesn't mean much. D/G, loft insulation?

The worst case for the vendors will be selling to a BTL investor, where the rental yield will determine what they will pay. At this price point, each 1k makes a difference so I'd offer £115k but expect to pay £120k.

Mrs_Rachel_Trelfa

I am not saying that I will not increase the offer - I know its all part of the process I just do not want our first offer to be rejected to the point of them not entertaining anything else from us if that makes sense.

Thanks for all of your advice so far.

I just didn't know if there was any rule/rough train of thought that if a property has been on for a while that you can expect to go in at. As I had not been able to find any info on her or online in general apart from 'if it has been on the market then you can offer less..'. E.G if it has been on for 6 months it is ok to offer x% less.

I know that the area they have said that they want to move to is considered quite expensive where we are so would that mean that considering they originally were on the market for 129,950 and have dropped to 124,950, that they will probably want around the 124,000 mark?

bristol_pilot

Just because a property has been on the market a long time does not necessarily mean that a low offer will be accepted. It does mean it's overpriced (to sell), but sometimes vendors are in no hurry to sell or are really just testing the market to see if it will sell for a high price and if it doesn't sell, well up goes the extension that they had planned all along!

It is far more important to find someone who is keen to sell for whatever reason than simply to find a house that has been on the market a long time.

Some houses that have been on only a short time have been withdrawn then re-marketed several times.

Really, time on market is not a reliable indicator.

Depending on where you live (this would not work in London!), I'd open at 15% off and look to finish at 10% off.