Ten per cent 'Rule'?

Saga

I can't remember if it was Location, Location, Location or Homes Under The Hammer where I caught someone saying that in general most houses are listed for sale at around 10% more than the market price or the minimum acceptable to the seller as EAs expect buyers to put in offers lower than the list price - like haggling is expected when shopping in markets in some countries.

Is this generally true?

I've found a house that hopefully I can make an offer on, but I don't want to insult the seller/get their backs up by offering a lot less than the listed price (although I feel I can justify my offer). However, if most sellers expect to get offers up to 10% lower than their asking price then it won't be an issue.

Davesnave

The only price that matters is the one you're willing to pay....except possibly the one slightly higher you'd go to, kicking and screaming, because you really love the place or know it will be hard to beat.

So it doesn't matter whether you 'insult' the vendor or not, provided you use comparable sales (not asking prices) to ensure your offer is reasonable. It is what it is.


Other matters unique to the house will also count, such as the length of time on the market, number of price reductions etc. But you really can't worry too much about what vendors think, because some of them are sure to be wrong!

need_an_answer

Every vendor is different in their expectation...you only have to read a few of the threads on this site to see that not everyone expects to get their asking price or that some posters feel that once an asking price is set,thats the minimum they will accept.

By all means go in with a lower offer,you have nothing to lose but also be prepared to increase that offer if it becomes apparent the vendor isn't budging if its the property you want.

hazyjo

No. It was bandied around in the last recession. Some will be realistically priced, others will be 'in your dreams, mate'.

Yes - people are generally expected to make offers. If you offer asking price, the sellers may think they underpriced it.

Ideally, the seller should feel they've let it go to cheap and the buyer think they could have got it for less. It's finding that happy medium.

Take into account sold prices of similar properties, how long it's been on the market and if it's dropped in price, and the vendor's situation.

I think an offer up to -10% is (sometimes) fair, I think anything over that you risk alienating the vendors. Others will tell you differently and swear they always pay at least 10% asking price.

Ben1989

I am a FTB and our offer accepted etc.

It's tricky. My wife has been searching for houses for months and months. The perfect one came up on a street that she adores and she immediately knew that was the one (cliche, i know).

It depends on the area of the country. Most people say "it's a buyers market". I 100% disagree with this on the Wirral. It is significantly a sellers market, houses selling past their initial price, time and time again. With that in mind and without taking any risks we offered £5k below their asking price. They agreed that they'd take the house off the market etc if we met full asking, which we did (because it was priced extremely reasonably anyway). Furthermore, before they could even put the for sale sign up they had to have an open house due to that much interest.

It depends on so much. I presume some more experienced property owners will come and help you, just my £0.02

welwynrose

We priced ours pretty realistically for the area & sold it in 18 days at 1% under asking price we would not have considered an offer 10% under asking

pinkteapot

It's absolute nonsense. Some houses are priced to sell and will fetch asking price or very close to it. Others have deluded sellers and should be selling for 20% or more under what they're listed at - and probably won't sell because the seller won't accept an offer that "low".

You have to take each house on a case-by-case basis and research what similar houses have sold for. Offer based on that.

Davesnave

welwynrose wrote: »

We priced ours pretty realistically for the area & sold it in 18 days at 1% under asking price we would not have considered an offer 10% under asking

Which is why I said it also depends how long the house has been marketed. I bet if you'd been trying to sell for 12 months you'd have changed your stance!

I've told the story before about how I got slightly drunk at a party with someone who'd viewed our house, but didn't offer and bought an inferior one down the road.

Both being somewhat 'relaxed,' I asked her why.

She laughed. "The Smiths who had to pull out of yours said you were tight @r$es and wouldn't take 10% less, so we decided to lowball the Jones'.They went for it, so here we are!"

!
The Smiths were wrong. It was a completely different market 6 months before, when we negotiated with them. We'd have been very willing to discuss 10% below after they had to pull out because of a worsening financial climate.

In fact, we sold for a good deal less than 10% below....and I didn't mind rubbing that in!:rotfl:

Saga

Good to clear that up. Thx.

caprikid1

Saga wrote: »

I can't remember if it was Location, Location, Location or Homes Under The Hammer where I caught someone saying that in general most houses are listed for sale at around 10% more than the market price or the minimum acceptable to the seller as EAs expect buyers to put in offers lower than the list price - like haggling is expected when shopping in markets in some countries.

Is this generally true?

I've found a house that hopefully I can make an offer on, but I don't want to insult the seller/get their backs up by offering a lot less than the listed price (although I feel I can justify my offer). However, if most sellers expect to get offers up to 10% lower than their asking price then it won't be an issue.

It's nonsense like this that leaves FTB chasing their tail and never getting the house they want.

shortcrust

Where I live houses usually sell for quite a bit more than the asking price.