Cheeky or Reasonable Offer for House in Current Environment?

RogueRecruit

So, I'm a first-time buyer (finally!) and am seriously considering putting in an offer on a house after a further viewing. It's on the market for £195k, which seems a bit overpriced for the area and for the minimal work done since the owner bought it around 8 years ago for £140k. It was put on sale over 4 months ago. However, it has potential and I'm willing to put in effort on renovations.


I'm struggling with what to offer. I want to be fair to both of us, but am seriously worried about ending up in negative equity after having to wait so long to finally get onto the housing ladder, especially with evidence suggesting an impending down-turn globally and potentially moreso in the UK with Brexit.


I'm thinking of offering ~10% lower than asking price (£176k), but don't want to be rude or make the vendor feel like I'm taking the mick. I'm a first-time buyer, have an AIP and would be happy to get to exchange as quickly as possible. Does this seem reasonable to you all?


Thanks in advance for your thoughts :-)

Slithery

What the current owner paid 8 years ago is irrelevant. How does it compare to recently sold similar properties?

Can you post a link?

hazyjo

So it's been on the market for 4 months? Was it up before that, or is that literally it? It's not the longest time. Has it had any price drops yet? Check Zoopla for price drops and listing history.

What's the area like generally for sales? Prices dropped/static/moving?
How does the price compare with similar sold properties?

What it sold for 8 years ago bears very little relevance - with or without any work done.

Surrey_EA

What the property was bought for 8 years ago is irrelevant, what % below the asking price is also irrelevant.

What is of greatest importance is how the price compares to other similar properties in the local area.

Despite what may be the common belief, especially on here, there are a few reasonable EAs around. A conversation with the EA to establish what the vendor is expecting, and to understand what is motivating them to sell, will not hurt.

hazyjo

Surrey_EA wrote: »

...and to understand what is motivating them to sell...

Yeah - that too! If they are 'in love' with a house and desperately trying to sell theirs, or if they need to sell, or maybe even downsizing, they may be able/prepared to take a lower offer.


If they're still looking and haven't found anywhere to go, they're not so likely to take a low offer (unless they're prepared to lower their expectations).

RogueRecruit

Thanks for the replies.

Firstly, my apologies, it was 5 years ago, not 8, when it was last bought.


In answer to your questions:
- Market is pretty tepid in the area. There has also not been a huge amount of interest in the house on Zoopla in the past couple of months.

- As I said in the original post, it seems a bit overpriced for the area also. Similar houses are selling for a fair bit less, or for a similar price to ~£200k you get more space, more garden and better condition.

- The Zoopla estimate for the property's value is £135-£145k (I get this is only a ball-park figure, but still, that's a big difference).

- The property is unoccupied as it was being used for offices for business that has now concluded.
- The seller seems fairly keen as he called me a week after the viewing and was happy to defer a repeat viewing until some time later when it was convenient for me.

System

Why not put in your offer, tell them you are still looking at other properties too, and just leave it there? In the meantime, carry on looking - there will be other fish in the sea, and maybe something better. They will no doubt try proactively to play games with you to get you to raise your offer, or to bid against yourself, but if you stand firm, you could be successful in the current economic climate.
PS 10% is not cheeky.

RogueRecruit

Thanks Dicoletian II, that's really useful advice.


I'm trying to be pragmatic about it and am continuing to look. I'm not stuck on this house and am prepared to walk away, but I would quite like it if the seller is prepared to negotiate. Just didn't want to be rude in my first offer. -10% seems quite a common figure, so just wanted to see what others thought.

hazyjo

RogueRecruit wrote: »

Firstly, my apologies, it was 5 years ago, not 8, when it was last bought.

Still largely irrelevant. I bought in 2013 and it had nearly doubled by 2016.

Slithery

RogueRecruit wrote: »

- The Zoopla estimate for the property's value is £135-£145k (I get this is only a ball-park figure, but still, that's a big difference).

Zoopla isn't usually in the same ball-park. Assume that Zoopla estimates are accurate to the nearest +/- 50%.

There are posts on here where identical flats in the same building have been given valuations that vary by more than £100k.

steampowered

Just offer what you would be prepared to pay, in view of other properties in the market which could you buy instead.

The asking price is irrelevant really.