Making an offer - first-time-buyer - London

RARCT

Hi everyone,

I wonder if you could help with some advice, based on your experience.

My partner and I are hoping to buy our first home (a house) in the suburbs of London. Our budget is about 410k max (which includes a just over 10% deposit). We have been looking at houses online and have seen some. Most seem heavily overpriced but I've accepted that now - London pricing.

We are wondering about the following:
Bearing in mind our budget, how much above it should we look? 425? 450? More?
I have heard/read people say that as a first-time-buyer you can get 10% off the asking price, etc... (which would argue we could look at 450 - 10% = our budget) but I'm not sure. To be honest, it seems ridiculous to me to ask for 30-60k more than what you are realistically expected/expecting to fetch, but, again, this is London. Or, am I wrong?


Thanks!

middleclassbutpoor

There is no magic formula and just because you are a FTB, it doesn't put you in any stronger position than someone who has sold. In fact, to some, FTB's are best avoided due to their lack of understanding of the process and the costs/risks/challenges of home ownership.

I think rightmove bands are 375-400-425k from memory, so I would be searching upto 425k on RM but if you have done your maths to say £410k is the max then you should expect that any house you see over this price will be very much down to negotiation and the situation of the seller.

You should be looking at the area- getting out there looking at properties and then getting a feel for what your money will get you. Use sold price data to see what similar has sold for and then look to make a call whether the value is good or poor when you look at what the seller wants.

babyblade41

When I look to move and quite often , I have my budget plus around 15 percent.

I have never stuck to anything be it budget or anything in-between because as soon as I walk into somewhere I just know from the get go this is my next adventure.

Try looking below your budget too, there are many houses that get missed due to price and yet can become that forever home (well for the next 5 years)

Cakeguts

Go and look at where they actually are first before booking an appointment to view. There was a thread on her recently about a house costing around £400k in a London suburb and it was not really in the area that it was being sold as in. Looking at houses online doesn't really give you the best idea of what you are buying and by going and looking at the area they are in will save you booking viewings of a lot of houses that you might not want to buy because if where they are.

RARCT

Thanks for your comments!

Interesting point about FTB - that their lack of understanding things could make sellers less likely to sell. This made me want to research more the seller's point of view when it comes to properties.

Looking below the budget is also an option. Over the past year we had a jump in how much we could borrow and we noticed that there were considerable changes in the quality of properties from 300 to 350, or 350 to 400k. However, not that much difference between 400 and 425 or even 450 or 475.

Cakeguts

RARCT wrote: »

Thanks for your comments!

Interesting point about FTB - that their lack of understanding things could make sellers less likely to sell. This made me want to research more the seller's point of view when it comes to properties.

Looking below the budget is also an option. Over the past year we had a jump in how much we could borrow and we noticed that there were considerable changes in the quality of properties from 300 to 350, or 350 to 400k. However, not that much difference between 400 and 425 or even 450 or 475.

The price differences are down to the area the house is in not what it has as interior fittings.

hazyjo

I definitely wouldn't drop any more for a FTB. They often end up with lower valuations (cautious lenders) especially when they have small deposits, plus every single thing on the survey has them either running for the hills or trying to drop the price (generalising here lol).

I would be glancing up to £450k, but would only view up to that price if they'd been on the market for ages with no price drop and if I was open with the EA saying my budget was some way under and would it be worth me viewing (don't think I've had one say no before as they play you off against the vendor - telling you to up your offer, and telling the vendor to drop). Sometimes it's good to view then wait for them to drop so you can shoot straight in with an offer.

I was searching with a similar budget a year or so ago. Loved one house that was on at I think around £440k. I had got my offer up to somewhere in the region of £434k and wouldn't budge any more as it needed loads doing and it was already more than I wanted to spend. They didn't accept. You just never know what people want. I sold mine at £515k when its price was £520k. I wouldn't have taken less than £510k (London). I also bought at £274k when it was up for £300k.

You need to do your own homework as to value. If something is that overpriced, it won't be selling when everything else is. Forget the '10% rule'.