Offering Below the Asking Price

ncfcstar

Hi everyone,

I'm sure this is a common question on here, but I suppose every situation is different hence why I am asking it again.

I've done research on the area we are intending to move to (we're not local) and sold prices etc. The house we are interested in is not on a modern development so house prices vary significantly on the same road, which makes it very difficult to work out whether the house we like is fairly valued.

Our current house was our first, and it was a new build. I didn't mind negotiating with the saleswoman in the office and when you're working off the various other prices on the estate it's easy (my experience) to reach a satisfactory outcome. This will be our first time putting in an offer on a house someone already lives in.

With the fact that the sold prices seem to vary so much I'm stumped as to where to place our first offer. The house is on at £340k (since end of Sept) and I was considering offering somewhere between £310k and £315k as an opening gambit. Is this too cheeky, or should I be looking at closer to the asking price? I literally haven't got a clue after a lot of thinking!

lee111s

There's only one way to find out really! Make your offer and await a response!

Personally I'd go in around 10% below asking and take it from there. You have nothing to lose. I was fortunate last year to get an offer accepted of £117k for a house that was up for £133k but the owners were divorcing. It was worth what they had it up for as a house of the exacr design two streets away sold for £130k 3 months after I moved in.

Go fo it and let us know how you get on!

stator

None of us can tell you whether the asking price is realistic or not. It may be over price by 20% or underpriced by 20%. Ignore the asking price and offer what it's worth to you.
Offering 10% under the asking price isn't unusual but it will depend entirely on the sellers. Some sellers are deluded and want much more than it's worth, they won't come down, so you make your offer and leave it on the table whilst you find somewhere else. Some sellers will have decided a price they want and increased the asking price by 10% to haggle down.
If the property has been on the market longer they are more likely to consider your offer, but nothing is for sure.
Make your own fair offer and see how it goes.

Belenus

ncfcstar wrote: »

.. This will be our first time putting in an offer on a house someone already lives in.

With the fact that the sold prices seem to vary so much I'm stumped as to where to place our first offer. The house is on at £340k (since end of Sept) and I was considering offering somewhere between £310k and £315k as an opening gambit. Is this too cheeky, or should I be looking at closer to the asking price? I literally haven't got a clue after a lot of thinking!

It doesn't matter if it is a developer's new house or an owner occupier's house, the market decides the price.

You also deal with the estate agent not the owner. Don't make friends with the owner or consider their feelings. House buying is a commercial, some might say brutal, transaction. It is usually a fraught experience for both parties.

Think along these lines.

What is our budget, what type of house do we want/need, and what will that buy us in the area we want to move to?

Then, for each possible house ask yourself, what is this house worth to us? Don't pay more than that.

Make an offer at maybe 8% to 10% below the asking price and play hard ball.

Be sensible but either be prepared to walk away or to increase your offer if the sellers hold out. There is always another house to buy.

Try and find out the owners situation via the agent. They might be desperate to sell and therefore more willing to drop the price or they might be totally relaxed and prepared to wait 6 months or more to get the asking price.

Good luck.

ncfcstar

Thanks all for your advice. I appreciate what your saying Belenus, I guess I just feel slightly different now I'm dealing with a person rather than a developer. In a way it feels like I'm a first time buyer all over again!

We'll be making a decision over the next few days and see what happens.

jonathanrolande

Hey ncfcstar,

As others on here have said we cannot really give a absolute valuation as there are too many factors involved but your offer sounds a good place to start. Just pay what you feel is right, not too much concern about other sold prices etc. Have a RICS valuation too which will advise you further.

Hope that helps!

the_flying_pig

I'd say that post #3 is bang on in theory & to some extent in practice.

In at least some cases though I would say that, rightly or wrongly, 10% below asking is an important watershed.

An average that's 11% below asking will in many cases be considered cheeky.

An average that's 9% below asking almost never will.

There's a small but probably real tendency for acceptable asking price discounts to get proportionately smaller as houses get more expensive, e.g. someone selling a £50k house may be more likely to accept £45k than someone selling a £500k house is to accept £450k.

Your suggested bid sounds eminently reasonable.

That's how [uk] house buying works, bidders bid & sellers either accept the highest/most attractive bid or decide not to sell.

paulsad

Agree with the flying pig - I'm putting mine on for 158k and hoping to get as near 150 as poss. if not then I can't sell; so no winners - sellers sometimes need/have to play hardball too as long as they are realistic in the first place.

gibson1

Is the house already under offer? If yes then you have some competition, and should maybe offer closer to your final offer that you'd be willing to pay. The agent can't tell you how much the offer is, but they can say if its all cash or a mortgage. An all cash offer will be harder to compete with.

Other things to consider; how long has the house been on the market? Whats the situation of the vendors? Are they in a rush to get out, or don't really care when they sell?
What's the condition of the house, would you need to work on it?

And what's your situation, are you keen to move now? If so, you might have to bid closer to the asking price.

I almost lost out on a house for my mum, as I was slow to come to my closing bid, and my mum was desperate to move. My bid was in the range of what they were asking.

With more time, I'd have waited for a bit more of a bargain. However, prices are rising so quickly that waiting for a bargain would actually cost more than bidding closer to the asking price.

Its a really aggressive market out there, but come to a balanced decision as to what your needs are and don't be pressurized by pushy estate agents!

Mickygg

I have a real problem with people saying offer 10 % below the asking price. What a load of tosh.
I price my homes to sell at a reasonable price. I have had 10% below the asking price offered before and I told them only to come back with the asking price or nothing as offering me that was saying they were not serious and only wanted a bargain. They then upped it to 9% below asking price and I told agent not to sell to these people and I would not and did not consider any more offers from them.
Up to you but sellers like me it gets backs up and then because of the ridiculous low first offer you will end up paying more than going in with a more serious offer.
As above offer what the property is worth, everyone prices houses differently, some want to sell, others don't care and will only sell if they can get top dollar. 10% below rule of thumb is just rubbish.

agrinnall

Mickygg wrote: »

I have a real problem with people saying offer 10 % below the asking price. What a load of tosh.
I price my homes to sell at a reasonable price. I have had 10% below the asking price offered before and I told them only to come back with the asking price or nothing as offering me that was saying they were not serious and only wanted a bargain. They then upped it to 9% below asking price and I told agent not to sell to these people and I would not and did not consider any more offers from them.
Up to you but sellers like me it gets backs up and then because of the ridiculous low first offer you will end up paying more than going in with a more serious offer.
As above offer what the property is worth, everyone prices houses differently, some want to sell, others don't care and will only sell if they can get top dollar. 10% below rule of thumb is just rubbish.

A property is "worth" whatever it sells for. You may think you've priced it realistically, but if you don't get any offers at that price then the market says you were wrong, and you're left to make a decision to either not sell or start entertaining a lower price.