Price per sq m - good to justify an offer?

btcp

theoretica 

One of the risks of giving reasons for your offer is you are opening yourself up to be argued with.  My offer is X doesn't give them the same opening to come back and say you should offer more because the second bedroom has new carpet and the garden shed should be included in the area calculations and...  Unless of course they appear to have missed that the place is falling down or there has been a planning application for a sewage farm next door since they started advertising or something they might not know about.

On the other hand, if I don’t say why my offer is 15% below asking price, a seller may be offended and won’t want to negotiate. Again, I take it from reading articles, where experts advising “make your offer personal”, “don’t offend the seller” , etc.  I could say this is all I can afford, but this gives me no room for negotiation. If I give reasons based on my research, maybe I have a chance to persuade that the house is overpriced? 

btcp

Deleted_User said:

They will then call the owner and say 'ive got an offer for you, its below asking cause the guy says other properties nearby are cheaper and/or bigger' 

That’s what I cannot establish because houses that are sold nearby were not the same in size and condition. Say there was one a similar size but updated and extra bathroom added sold 5% above the asking price of the house I am interested in. There was another one that is outdated but 25% smaller and sold 17% below asking price of the house I am looking at. 

firsttimesellerldn

You’re definitely over thinking this a bit. There’s no way to establish precisely what a property is ‘worth’. Identical properties can sell for different prices. Local sold prices should give you a ballpark figure even if they’re not for identical size properties, then it’s just a case of working out what you’re prepared to pay taking into account the work that needs doing (if you add the price of the house to the potential cost of the work how does that figure compare to local prices?). I’m assuming that you’re viewing this property as a home that you’re going to live in for a few years, rather than primarily as an investment, in which case I think whatever you pay it’s important you’re comfortable with it and aren’t going to stress about it while you’re living there! 

Irishpearce26

btcp said:

Falafels said:

You don't need to justify an offer. Just name the price you'd be prepared to pay and leave it with the agent until they get back to you, and take it from there. 

I can be prepared to pay plus/minus 50k. For this amount I can replace heating, bathroom and kitchen. If the house is priced to sell (which I don’t know how to establish due to a lack of compassion) I can pay more , move in and save for this work. I don’t want to overpay if I don’t have to. And my preference is to spend  50k on upgrading right away. 

Sounds like you need to buy a new build!
I can guarantee no seller will accept £50k less just so you can have brand new stuff. A house value is not deemed by how new the kitchen and bathroom are, yes its more attractive for buyers but none the less if the area and house fit the bill in terms of value the internal doesn't matter.

If a survey lists many things that need to be rectified then you could negotiate big sums but not for a new kitchen and bathroom.

btcp

Irishpearce26

Sounds like you need to buy a new build!
I can guarantee no seller will accept £50k less just so you can have brand new stuff. A house value is not deemed by how new the kitchen and bathroom are, yes its more attractive for buyers but none the less if the area and house fit the bill in terms of value the internal doesn't matter.

If a survey lists many things that need to be rectified then you could negotiate big sums but not for a new kitchen and bathroom.

No I don’t need a new build. The comment was in relation to a statement “name a figure you are prepared to pay”. And I am prepared to pay +/- 50k. Do I want to save 50k and use it for upgrades? Yes I do. But if I establish if the house is not overpriced, I will pay 50k more and save for upgrades next year. I want to make a relatively fit offer at the start and not wait for a survey. The house wasn’t touched for 20 years so no one argues with the fact it needs updating. 

btcp

firsttimesellerldn said:

 Local sold prices should give you a ballpark figure even if they’re not for identical size properties, then it’s just a case of working out what you’re prepared to pay taking into account the work that needs doing (if you add the price of the house to the potential cost of the work how does that figure compare to local prices?). 

That’s what I was trying to establish by calculating sold prices per sq m, it looks like the community doesn’t feel my method is good though
taking into account the work needs to be done, I arrived at 15% below asking. I will have difficulties explaining that with no like to like houses sold, but it also looks like people don’t bother with justifying.

ssparks2003

There is no need to waffle on about the work that needs doing or the one down the road that was 10 square metres bigger sold for this amount 2 years ago. Decide what the max you are willing to pay is and offer some less to give yourself negotiation room.

The seller will either accept or decline your offer on the basis of what they think the house is worth to them. They want the money, not your vision of what you might door with the house 

Irishpearce26

No I don’t need a new build. The comment was in relation to a statement “name a figure you are prepared to pay”. And I am prepared to pay +/- 50k. Do I want to save 50k and use it for upgrades? Yes I do. But if I establish if the house is not overpriced, I will pay 50k more and save for upgrades next year. I want to make a relatively fit offer at the start and not wait for a survey. The house wasn’t touched for 20 years so no one argues with the fact it needs updating. 

How did you come to the £50k mark? Is that a rough estimate on what you think it will cost to upgrade the kitchen and bathroom as it seems quite high. When we sold our house we looked at other house similar in the area and mainly took into consideration of the type and amount of bedrooms/rooms. We marketed a little higher because we have more off road parking and bigger garden, we got over our asking price and others that have more modern kitchen/bathrooms/decor had to reduce their price. If a house that is similar size (don't think sq meters will be too relevant in negotiating) but with more updated features offer a price that is slightly lower as that would be more realistic than £50k less because you want to upgrade the house.

ciderboy2009

btcp said:

firsttimesellerldn said:

 Local sold prices should give you a ballpark figure even if they’re not for identical size properties, then it’s just a case of working out what you’re prepared to pay taking into account the work that needs doing (if you add the price of the house to the potential cost of the work how does that figure compare to local prices?). 

That’s what I was trying to establish by calculating sold prices per sq m, it looks like the community doesn’t feel my method is good though
taking into account the work needs to be done, I arrived at 15% below asking. I will have difficulties explaining that with no like to like houses sold, but it also looks like people don’t bother with justifying.

But is it work that really "needs to be done" or work that you want to have done?
If it's work that needs to be done then most sellers will have taken that into account when setting the price - bear in mind that they normally know more about the house than anybody else.

I'll be perfectly honest here, if someone was to come with me with details of exactly how they've worked out their offer price - including local prices per square meter - then I would be wary about accepting their offer as I would expect them to be a nightmare throughout the whole selling process.

btcp

Irishpearce26 said:

How did you come to the £50k mark? Is that a rough estimate on what you think it will cost to upgrade the kitchen and bathroom as it seems quite high. When we sold our house we looked at other house similar in the area and mainly took into consideration of the type and amount of bedrooms/rooms. We marketed a little higher because we have more off road parking and bigger garden, we got over our asking price and others that have more modern kitchen/bathrooms/decor had to reduce their price. If a house that is similar size (don't think sq meters will be too relevant in negotiating) but with more updated features offer a price that is slightly lower as that would be more realistic than £50k less because you want to upgrade the house.

It is not kitchen and bathroom. It’s a comparison to houses with an extra bathroom, loft conversion and better decorative condition. Also old heating and insulation is taken into account.