What would be an acceptable offer?

PointyMcguire

I know usually an offer between 5 and 10% is deemed usual in terms of kicking off negotiations, however a house we saw listed a little over a year ago when we were first doing research into potential areas to move to has now reappeared at £200k more than its previous asking price and we're wondering if we'd be completely remiss to go in with an offer in the middle of the two prices? Speaking with both the current and former estate agents, nothing has actually been done to the house in that time to warrant such a large jump in price, in fact if we were being nit-picky the property actually needs more work than when it was first listed. The vendor is apparently a motivated seller who is downsizing and we're in a position to move quickly, with a decent deposit and low LTV, but at the same time don't want to come off as dreamers or upset the seller. I know something is only worth as much as someone is willing to pay, but in this case how low would too low be?

ElizabethRose

How does the price compare to similar properties in the area? Also what kind of value is the property? If it was on now at £500k and you offered me £100k under I'd laugh and not entertain any further offers from you. If the property was on at £2.5m and you offered £100k under I'd probably accept.

Whilst some people don't believe it prices are still rising in some areas and selling quicker than ever. Without knowing the area it is hard to say. Sorry there's too many variables to say how low would be too low.

PointyMcguire

It's pretty overpriced compared to similar comparable properties in the same area, and the fact it has been on the market for a few months now with no offers and very little interest supports this. Without wanting to be too specific, it's a somewhat niche property in an area that is fairly slow-moving. It's on at low 7 figures, was formerly high 6s, offer would be around 15% below asking price. 

ElizabethRose

If it is over priced with little interest and as we are talking a seven figure property go for it. The only thing I'd say is the seller probably isn't quite as motivated as the agent has made out hence the high asking price. 

PointyMcguire

I mean, potentially someone might come in offering more, but that could be months down the line. That said, from our perspective and having watched the local market we believe it is overpriced at the current price. The seller themselves have told us how keen they are to move on, so we're fairly confident this isn't just agent BS. Hopefully even if they deem the offer too low, we'll be able to at least open a discussion about what an acceptable offer might look like, but I guess we'll have to wait and see. 

eve824

What is the previous sale price + basic house inflation ? Perhaps go in with that as a starting point as then at least you have a justification for a much lower than asking price offer (assuming that would be lower than asking!).

We had a couple get angry at our estate agent as to why we had put the house price up from when we bought last year. Even if you ignore the fact the house was unfinished when we bought it, the price we paid (which was low due to half finished reno) + house inflation was more than their offer! Even if they come back with a higher offer we have been well and truly put off by their attitude tbh.

Scotbot

So from 800k to 1M is a 25% increase,  900k to 1.1M is 22%. I  don't think anywhere has seen that sort of rise, the asking price is too much. Depends how much you want to overpay, 15% below asking is probably a fair price.  

PointyMcguire

Previous sale price was many moons ago, so that + basic house inflation would be well below our offer. It's a tough one as we do really like the property, and genuinely feel like it was previously undervalued, but we're finding it hard to understand the huge leap in price when the condition of the property has deteriorated since it was previously listed, and is now priced way above market average to boot. To add a little context (and I appreciate generally they're worth taking with a pinch of salt) our offer would still be £120k over the higher end of the Zoopla estimation and we can show our workings in how we arrived at the figure we have. 

Sorry to hear you had a couple get angry at you over your pricing, that's not on at all. At the end of the day, you're not forcing anyone to pay it, so ultimately whilst a buyer can make an offer, it's not their god-given right for you to accept it. 

Scotbot

If it were undervalued last time it would have sold. Why not take the previous asking price and add on the % rise for the last 12 months and go in with that. Easy to justify. 

PointyMcguire

Scotbot said:

If it were undervalued last time it would have sold. Why not take the previous asking price and add on the % rise for the last 12 months and go in with that. Easy to justify. 

We've spoken with the previous agent and it got to contracts last time, but there was a complication (won't go into details here) and the buyer pulled out and the house was consequently taken off the market shortly after. The complication still exists, but our solicitor is confident that it's not a deal-breaker. We looked at asking price + % rise but it felt too low, albeit justifiable and we worried we might not be taken seriously. 

PointyMcguire

Scotbot said:

So from 800k to 1M is a 25% increase,  900k to 1.1M is 22%. I  don't think anywhere has seen that sort of rise, the asking price is too much. Depends how much you want to overpay, 15% below asking is probably a fair price.  

I've tried to keep the numbers vague but increase equates to 37%