How Much to Offer?

househunter7

Hi,

I know nobody will be able to provide me with the exact answer, but I am looking for an opinion on how much I should offer for a house.

This house will only be my second house purchase, so, unfortunately, I do not have a lot of experience.

The house we are selling has had an offer, been valued and is currently proceeding without issue, to a FTB. The house we are looking to purchase is, although affordable, a considerable increase in value.

The house we are looking to buy has been on the Market since August, with limited viewings (Vendor Feedback), and no offers (EA Feedback). House was reduced in November, but we feel this is still overpriced, which the limited viewings / offers backs up.

We have a value in mind (approx. 10% less than listed priced), over which we will not pay, and would be prepared to walk away from the house.

We are unsure whether to offer below this amount, allowing room for ‘negotiation’, or if it would be best to offer our limit, advising this is the limit and is ‘take it or leave it’.

I, obviously, do not want to offend the Vendor by putting in a really low offer, but I also do not want to overpay.

How would you approach this, or which option would you prefer to receive? Any help / advice will be appreciated.

Thanks

glasgowdan

Offer 15% under and see what they say. If I were you I'd probably consider budging up to close to my max budget IF I thought it was worth it, but I'd be reluctant to offer my max.

armchaireconomist

Personally, I would speak directly to vendor if possible re: price. An estate agent ringing to tell them you've offered 10-15% down on price isn't likely to be accepted and brush you aside as a chancer who will come back with closer to asking price, however if you explain your circumstance and this is the maximum you'd be willing/able to pay it's more likely to be accepted.


That's what I did anyway. House was up for 80k (way overpriced), then 70k (still overpriced but getting there), I went in with 60k to an immediate "no", I knew it had been on the market 6+ months with little interest due to needing a lot of work, and she had since rented a house so was paying 2x bills. I explained this is what it was worth to me considering the work it needed, and eventually met her at £61,500.

househunter7

Thanks for the quick replies!

I have already asked the EA for the Seller's Minimum Price, as we were unwilling to pay the current asking price, to try and turn the tables a bit, but they were unwilling to approach the seller. However, they advised they would pass any offer on, regardless of how low, as they were required to.

What would be the best way to approach the Vendor directly though, just turn up to the house, or request another viewing and hope to discuss?

Raggie

My thinking..


if I am not embarrassed by the first offer .. it's probably too high...

househunter7

Thanks Raggie, it's definitely an interesting view. Maybe I am being too emotional regarding my Wife's stance on the house, that she would probably take it, no matter the cost! Which is probably why I do not want to annoy / offend the Vendor into refusing my offers no matter the cost.

Maybe offering a 'cheeky' offer initially, then being willing to walk away has the upside that everything under the amount in my head is a bonus.

Has this approach worked for you in the past?

Also, if somebody came in with an embarrassing offer, that you flat out refused, would you ever stop somebody from offering on your house?

Raggie

Everybody negotiates in their own style.


What works for one may not work for you..


Personally when selling I have a price I am wiling to take, just because someone offers low does not mean I will not sell to them..


When buying I have always found that after the initial bout of discussions/offers when we are getting close to my "top" figure I go for a small shake of the head, thank them very kindly for their time and say "what a shame, you know we were both so close to a deal that it seems a pity that it has to end so frustratingly close. But that I wish them well with the sale and a very happy future"..


then see what they do..


Buying is like salting food.. you can always add to the price.. you cant take away..


Just because you walk away doesn't mean you cant walk back..


My only concern for you.. would be a wife who is emotionally committed to the property.. then your not only negotiating with the seller, but facing the problem of it being your fault if a deal cant be had.. lol..

armchaireconomist

What price is the house up for and what is the price you had in mind?


Further to my last post, as you already have a buyer for your own property lined up it puts you in a position for a quicker sale. Get a decision in principle ready to show them too. If it's been on the market for a while and you offer a somewhat cheeky, but quick sale you're much more likely to get it. Really talk up the benefits of selling to you and not someone else.


If someone offered you 10k down on price but a quick sale for argument sake while you're still paying bills on the property and have had little interest for months, would you take it? I know I would.

househunter7

House is Listed as Offers Over £240k.

There is nothing in the immediate area that has sold within the last 6 months, with nothing over £215k in the last 12 months.

My max offer would be £220k, as this is what I feel it is worth, however, while nothing 'needs' replacing, everything would need to be changed to suit our taste.

Area is Midlands, if it helps.

Cakeguts

The seller of the house you are looking at may not sell their house for anything lower than the price it is on at now. Some people will leave a house on the market for years hoping to get the price that they want. Might be a good idea to see if the sellers are going to be realistic or not.

kilby_007

We offered on an "offers over 300K" house, starting at 285K and eventually winding up at our final offer of 300K. They still rejected it, stating they were looking for 320K. The house you're looking at may well only be worth 220K, but greed does grab a hold of people so don't be surprised if they're looking for an unrealistic sum.