Low offer - below 2005 sold price

student100

We're looking at a house which was last sold in 2005 for £350,000. It was listed for sale last November for £375,000. Asking price dropped to £350,000 in April this year. Hasn't sold since. Apparently it did have a tenant until recently which might have put people off a bit. The tenant has now left and the property is vacant.

The house looks like it hasn't had much love since 2005; carpets are dated (though actually not too bad condition), kitchen is dated and in need of replacement, bathroom is late 90's style, exterior woodwork has flaky paint, garden is overgrown with brambles and dandelions, some double glazing needs renewing. Electrics do seem to have RCDs and the combi boiler looks like it might have been installed after 2005 (and hopefully if they've had a tenant has been maintained and safety checked) but that's about it.

Based on the Nationwide calculator with the sold date and price and change in average house prices in this area since 2005, the property would be worth £372,000, but that's just based on the change in average prices and this house has not been maintained in the same standard of repair. It's obviously not worth that much in its current condition as it's not sold for months.

This house has an enormous garden/field to the rear (3/4 of an acre apparently) which makes comparisons with other properties difficult, but we have seen a large extended end terrace up the road which is on at £280k, rooms are probably a similar size and immaculate condition, modern decor etc. But the garden is a lot lot smaller (more "normal" size). Not really sure how to value this extra land.

We'd quite like the idea of the big garden and are prepared to do the necessary improvement works over several years, but we couldn't afford this if we paid full asking price.

How do we gauge what is a reasonable offer for the property, and convince the seller to accept below what they paid for it at the height of the property boom?

csgohan4

Put an offer on what you think the house if worth.


Maybe 325k

AdrianC

What it may or may not have sold for last week is irrelevant.
Eleven years ago? TOTALLY AND UTTERLY irrelevant.

The only figure that matters is what you're willing to pay to buy it, and what the vendor's willing to accept to sell it. If those figures coincide, then there's a sale under way. If not, then there isn't, no matter what figures people might or might not have agreed in the past.

Doozergirl

If they're asking what they paid for it and have already dropped the price, then they must be of the realisation that they're not going to make any money.

There's no point trying to influence what is in their head when it's the agent putting the offer forward. You can give some great long story full of NLP to the EA and they'll just phone the vendor and say 'they've offered x'.

Stop thinking about them and just offer what you think it's worth.

upoiupou

Offer what you can afford and think it's worth. You may want to start a little under so you can increase it, but that's up to you. A straightforward "I know it's less than the asking price but this is my best offer" approach is also an option.

Have you asked the EA why it's priced the way it is? You may get a helpful answer, you may not, but I think it's worth asking. I wanted to offer much less than asking price on a house, and the EA's explanation of how the asking price had been arrived at was useful to know. It gave me an idea how to explain the level of my offer. The current thinking on price is what you need to focus on, not a historical sale price.

You'll need to be prepared for a rejection of your offer. The seller may simply be unrealistic in their expectations and hold out for more, even in the face of evidence that they won't get it. But it's worth a try.

Good luck.

breaking_free

Just to put a different spin on this,

I'm about to sell a property I own in the back of beyond, Ireland. Property prices have barely moved there for the last few years so there's a very good chance that I'll only be offered the same as I paid for it. I could wail and rant about not making a profit OR I could take into account that I've had tenants in there paying me several hundred Euro for quite some time.

IF I accept an offer equivalent to what I paid, then even after estate agent fees etc, I'll still come out ahead because of the rent I collected. Your seller may think the same way I do - if that's the case they may be quite reasonable about accepting an apparently non-profitable offer.

Best of luck.

Crashy_Time

breaking_free wrote: »

Just to put a different spin on this,

I'm about to sell a property I own in the back of beyond, Ireland. Property prices have barely moved there for the last few years so there's a very good chance that I'll only be offered the same as I paid for it. I could wail and rant about not making a profit OR I could take into account that I've had tenants in there paying me several hundred Euro for quite some time.

IF I accept an offer equivalent to what I paid, then even after estate agent fees etc, I'll still come out ahead because of the rent I collected. Your seller may think the same way I do - if that's the case they may be quite reasonable about accepting an apparently non-profitable offer.

Best of luck.

Exactly, we were in a market mania phase in 2005, with cheap home loans being given out like sweets, not so now, smart sellers, especially if they have been collecting rent will take what they can and exit the market now if they need/want to sell.

Kynthia

Someone may have overpaid in 2005. You need to decide what its worth today by comparing it with recently sold comparable properties.

Chanes

There was a noticeable property price spike 2005 - 2007 and there are many houses that are being sold at that price or even less than that. You have to remember the single biggest economy collapse has occurred (2008) through to now and it still hasn't recovered from what the banking collapse and scandal brought, it runs to trillions on the global scale. Even factoring in the leaving of the EU and panic that will be caused as we adjust in 10 years again things will be much improved. But I guess the people buying in 2005 had their own thoughts and the collapse wasn't one of them.

student100

OK - so we offered, initially at £315k which was rejected. Increased to £325k stating that was our best and final offer. That was rejected too. The agent has said the vendor wants the full £350k but if we increased to £330k she may be able to persuade the seller.

I'm not sure if that is just the agent's way of trying to get us to step up a bit at a time (next time it will be maybe she'll accept £335k, etc...). The agent has already tried very hard to get me to see their mortgage broker, I'm guessing so he can try and convince me we can afford to pay more. I've resisted that tactic.

There's another house nearby which we like that's on at £280k. It's a slightly smaller house, much smaller garden (though still probably "big enough"), similar amount of bedroom space, and in much better condition, hardly any work would need doing not even redecoration. I've told the agent this, and we're going for a second viewing there tomorrow, and I think we're likely to put in an offer on that cheaper house. Mortgage loan and payments would be around a third less. I told the agent that we'd leave our £325k offer open until the end of the week if the seller wants to change her mind...

Still, we would like the more expensive house with the bigger garden, and I'm pretty certain that the seller isn't going to get more money for it, especially not in its current condition, but I guess she's not convinced of that yet. While it seems silly to lose a great house for "only" 5k (around 1.6%) you have to draw the line somewhere.

Is there any point trying to do anything else to persuade the vendor or should we just give up on it?

Doozergirl

Agents want a sale, they don't work for the vendor. The agency commission on £5k is going to be less than £100. Less than that for the actual salesperson.

Your choice is to go higher or not.

Clearly, you don't have a deal at the moment as the vendor hasn't even shifted their expectation downwards.

Is it worth it for £5k or not if the agent can work on the vendor?

I imagine there's actually quite a difference between this house and the £280k one.