How much to offer?

James723

Sorry I know there's a lot of these threads, but hopefully this one should be a bit clearer than "how long is a piece of string?"

The House: It's 3-bed link-detached on at 575k. It was originally put on the market at the beginning of October and sold in early December. The sale fell through and it was re-listed last week. At no point has the asking price been changed. The house is mostly in good condition, it needs new carpets upstairs and the kitchen is a bit tired. The biggest thing we don't like is the ground floor layout, the kitchen is in the middle of the house with no windows, we would like to move the kitchen location. The last house to sell in the road was a 4/5 bed detached and it sold for 545k in July 2014.

The Vendors: The owners are an elderly couple moving into an annex to their daughter's property. The estate agent said they have been distraught by the whole process, particularly with the sale falling through, so presumably are keen to get the whole thing wrapped up.

Us: We are letting out our property so have no chain, we have a mortgage agreement in principle so we are pretty much ready to move.

I think the house is overpriced, I think the absolute maximum it is worth is 550k. Part of me wants to start negotiations at 500k, but I'm concerned this is too low and will result in neither the vendor or the estate agent taking us seriously.

Any thoughts?

Thanks,
James

Old_Git

offer enough to put others of .

Hoploz

500k will tell them you are trying your luck, not a serious buyer.

My house was up for 575k and worth it. Some idiot offered 100k below, then increased to 500k. I told the agent I was not interested in any further offers from him, even if asking price. His opening offer told me he would have no intention of completing the deal at the right price and would likely gazunder at the last minute.

I later sold to someone else pretty easily.

Jhoney_2

James723 wrote: »

Sorry I know there's a lot of these threads, but hopefully this one should be a bit clearer than "how long is a piece of string?"

The House: It's 3-bed link-detached on at 575k. It was originally put on the market at the beginning of October and sold in early December. The sale fell through and it was re-listed last week. At no point has the asking price been changed. The house is mostly in good condition, it needs new carpets upstairs and the kitchen is a bit tired. The biggest thing we don't like is the ground floor layout, the kitchen is in the middle of the house with no windows, we would like to move the kitchen location. The last house to sell in the road was a 4/5 bed detached and it sold for 545k in July 2014.

The Vendors: The owners are an elderly couple moving into an annex to their daughter's property. The estate agent said they have been distraught by the whole process, particularly with the sale falling through, so presumably are keen to get the whole thing wrapped up.

Us: We are letting out our property so have no chain, we have a mortgage agreement in principle so we are pretty much ready to move.

I think the house is overpriced, I think the absolute maximum it is worth is 550k. Part of me wants to start negotiations at 500k, but I'm concerned this is too low and will result in neither the vendor or the estate agent taking us seriously.

Any thoughts?

Thanks,
James

Genuine question - Why do you feel it's reasonable to offer 75-50k less than they think it's worth, but so unreasonable of them to want 25k more than you think it's worth?

Anyway, in lieu of other posters who arrive, the thing to do is offer what you think it's worth. They can only say one of two useful things...and maybe.

Hoploz

BTW you mention no price changes. That sounds fair enough to me, it's a quiet market between oct and spring so that would be normal, esp if it was under offer for much of that time.

James723

Jhoney wrote: »

Genuine question - Why do you feel it's reasonable to offer 75-50k less than they think it's worth, but so unreasonable of them to want 25k more than you think it's worth?

Anyway, in lieu of other posters who arrive, the thing to do is offer what you think it's worth. They can only say one of two useful things...and maybe.

Well due to the lack of recently sold similar properties on the same road, I don't have a huge amount to go by. But a bigger 4/5 bed house selling for 545k suggests to me that 575k for a 3-bed is optimistic.

The local property market is red hot at the moment. Most decent places are getting snapped up in days. The fact that this place sat on the market for 2 months and then the sale fell through suggests that there's either something wrong with it or it's overpriced. For now I'm going with the latter.

I said I thought 550k was absolute max. I would say 525k is a fair valuation. If I was to offer 500k, this would be to anticipate a counter offer. This isn't just a case of me chancing my arm, I genuinely feel that the place is overpriced and given the vendors eagerness to sell and our ability to move quickly, I thought 500k was a reasonable opening offer.

Jhoney_2

James723 wrote: »

Well due to the lack of recently sold similar properties on the same road, I don't have a huge amount to go by. But a bigger 4/5 bed house selling for 545k suggests to me that 575k for a 3-bed is optimistic.

The local property market is red hot at the moment. Most decent places are getting snapped up in days. The fact that this place sat on the market for 2 months and then the sale fell through suggests that there's either something wrong with it or it's overpriced. For now I'm going with the latter.

I said I thought 550k was absolute max. I would say 525k is a fair valuation. If I was to offer 500k, this would be to anticipate a counter offer. This isn't just a case of me chancing my arm, I genuinely feel that the place is overpriced and given the vendors eagerness to sell and our ability to move quickly, I thought 500k was a reasonable opening offer.

Thanks for the reply.

I am just curious about the offer process generally.

You say they are keen to sell, but the fact that the price hasn't moved at all (and I agree the winter market is slow) would suggested they are quite happy with how things are going.

Without the condition of the 4/5 bed to work with it is hard to know why - and a fast market pushes prices up so perhaps last years 4/5 bed price may no longer be 545k.

Given this is an end of chain sale, they may sit it out to get the most money they can.

After all, it will have to finance two elderly people for their twilight years.

the_flying_pig

Both of your stated reasons for thinking the asking price is high (very recent sold comparators, amount of time unsold) seem on the face of it very plausible.

How about say £520k? It's c. 5% below your estimate of "absolute max" value and within 10% of asking. Offers that are more than 10% below asking are fairly unlikely to be accepted by a buyer who as you describe it is in no rush at all to sell.

If your estimate proves to be on the low side, and the higher value is reasonable, then someone will outbid you fairly soon. But there's only one way to find out.

Hoploz

Why not just offer the 550k you are willing to go to. Explain why you think it's worth 525 but you are willing to stretch to 550k but won't be going any higher. As a seller I'd think that was a reasonable offer. And I would either accept or decline it according to my situation at the time.

You don't know how much it went UO for in the first place, but the fact they haven't reduced the price means it was probably somewhere near the asking price. They may take a lower offer if they are keen to sell but once they've had one offer in the asking price ballpark it's reasonable for them to assume someone else will soon come along and pay a similar amount.

bylromarha

What are you happy paying?

Put your offer in, telling the EA that you feel it's overpriced because of XYZ. I agree £520k would be good to go in at, as it isn't as low as £500k. See where it goes from there.

FWIW, we put an offer in on this house well below asking. Told vendors we thought it was overpriced giving reasons, plus we were looking to move quickly (as we were renting) and wanted to put an offer in on a second house if they didnt accept our offer.

Offer got snapped up!