First offer advice!

everton85

Hi all

I have found a property that I really like (after months of searching) and despite a couple of minor reservations, I feel ready to make an offer on it.

It's on the market for £300k OIEO (offers in excess of) and has been listed at that price for a week. Prior to this, it was on at £310k.

I know that the owner bought the property for £285k 12 months previously, and has not made any significant changes that would enhance the value of the property. Zoopla estimates that it's worth £283k currently (so less than she paid for it).

My other half feels that it would insulting to the seller to offer less than she bought it for, especially given it is listed as 'offers in excess of'.

I am mindful though that an offer of £285k is only a reduction of 5% on the asking price.

Lots of guides I have read said a first offer should be around 8% to 10%, which would be £270k to £275k.

What would you recommend?

The Estate Agent has indicated that she is stubborn about the price.

ess0two

Forget zoopla valuations,in a rising area you wouldn't need to make significant changes to see an increased value,you need to compare recently sold properties to gauge a value.

ACG

You can not really go off what they paid for it, no matter how recent and how little they have done to the property. They may have bought the property from a relative or a friend.

Tesco probably bought the tin of beans you bought today for half the price 2 weeks ago. I realise it is different but what the vendor paid is irrelevant as is Zoopla. According to zoopla in the 18 months I have been in my house it has gone up by around £10k.

That is because the 2 houses opposite mine have sold for significantly more than mine - but they are bigger houses. My house is also apparently worth more than my next door neighbours house, they have extended it and have a corner plot with planning permission to extend further. Their home is probably worth at least £50k more than mine, if not closer to £100k - Zoopla is not much more than a guide.

You are looking at it today. Is it worth £300k to you? If so, then anything below that is a Brucey bonus. If it is not worth £300k then offer what you think it is is worth. They will either say yes or no.

I do not think it will get you very far by making an offer with your justification being what they paid. I would be more concerned with why they want to move after a year.

MysteryMe

ACG wrote: »

You can not really go off what they paid for it, no matter how recent and how little they have done to the property. They may have bought the property from a relative or a friend.

Indeed, or the previous vendor may have accepted a low offer because they were desperate to sell.

Cakeguts

Offer what it is worth to you.

Jigglebiz

If you’ve been looking for months and this is a good one, you’ll be disappointed if you don’t secure this property. If it’s listed as OIEO 300k you’ll probably need to be at £295k or above to even have a chance. How would you feel if someone came along tomorrow and offered £300k?

middleclassbutpoor

Just choose a price you think its worth - however you value that is irrelevant.

You should then offer a little lower than this so you can negotiate to the value you want to pay.

If you cannot get for the price you want to pay - prepare to walk away.

Had something similar to contend with myself so appreciate what you are going through - Our buyer just offered asking compared to another buyer who valued our property less than asking price. They lost out as we had a person who valued it at a price we agreed with.

Likewise - we saw a home that needed work doing to it. We offered significantly lower with the expectation of meeting where I truly valued the property. We had a call yesterday saying another person had offered more. I was happy to let it go based on the fact that it was only worth what we offered.

We had a 2nd choice though which helped - didn't need anywhere as much work etc. We offered near to asking on that property and it has been accepted. We used the same approach - basically made the value we placed in the middle of what was being asked and what we wanted to pay..

ReadingTim

I would suggest that OIEO £300k is a pretty strong steer that the vendor won't be too interested in anything much below £300k, so while you should only offer what it's worth to you, don't hold out too many hopes that they'll accept that offer and you'll make the sale.

Furthermore, the EA's told you as much, saying the vendor's "stubborn about price" - the choice of words indicates a level of frustration from the EA which may not be merely sales tactics to wring a higher price out of you...

The extent to which they'll consider (rather than outright reject) anything below £300k depends on how long they've been advertised at the current price, and any higher prices - how long was it on at £310k for?

novelty-socks

Good advice here already I think.

I would agree that the seller also has around £300k as their intended sale price. If I really wanted it but felt £300k was too much, I might offer £280k with the hope of agreeing a sale at £290k or so.

All that said, you never know what will happen in these circumstances. A few weeks ago we saw a place priced at offers over £600k. Compared to other flats in the area I felt this was overpriced, but the seller had an offer quickly and it seems to have sold. Not sure what for yet, but it was only on the market for around a week, so I'd assume it went for not much less than £600k.

All comes back to whether you'd be happy to lose the place to someone else who offered £300k. Good luck!

chunkytfg

everton85 wrote: »

The Estate Agent has indicated that she is stubborn about the price.

Remember the Agent works for the seller and their income is commission based around the selling price. the more they get you to buy for the more money they make!! Anything an agent says is to be taken with a pinch of salt!

We've just offered 350k for a house on for 410k. Knew they'd say no and probably will end up spending 385+ to get it but you have to start the negotiation somewhere and might as well be low or you'll always wonder how cheap you cold have got it for if you'd been cheeky/insulting first

ReadingTim

chunkytfg wrote: »

Remember the Agent works for the seller and their income is commission based around the selling price. the more they get you to buy for the more money they make!! Anything an agent says is to be taken with a pinch of salt!

Assuming commission of 1.5%, sale at £290,000 gets the EA £4,350. Talking the price up to £300k gets them £4,500, ie an additional £150, but risks the lot if the buyer doesn't take the bait.

Despite common perception, many EAs prefer the certainty of £4,350 than the risk associated with £4,500.

I suspect that on this occasion, the EA is being far more truthful than you're giving them credit for.