Chain-free cash buyer. Thinking of offering 20% lower than asking price - Too low? Or reasonable?

HotPantsCruiser

Would 10 or 15% not be more reasonable at the moment?

Slithery

HotPantsCruiser said:

Would 10 or 15% not be more reasonable at the moment?

10%-15% over?

Yes, probably a more reasonable offer at the moment.

[Deleted User]

newsgroupmonkey_ said:

Deleted_User said:

aoleks said:

is this thread serious? even in "normal" times, 20% under is a bit of a push, to put it politely. in this market, you might want to add 10% to the asking price to even stand a chance. no one will let a FTB-er with a mortgage go and miss out on tens of thousands of pounds because there is a tiny chance of the deal falling through, most don't.

Yes, my thread is serious.It isn't the same everywhere in the country, or for every property. 20% below the asking price is not unheard of where I live, and from the research I've been doing, which I should have just stuck with instead of asking here. 

My mother has just purchased a property here for around £10k below the asking price. I'm so relieved that she didn't come here asking for advice on what to offer! 

Is the £10k 20% under value?

The problem with Googling advice on something like this is that it's a moving target. 2 years ago, we picked our place up for £10k under the asking (around 4%) because the vendor was desperate as his chain had collapsed and we were effectively FTB as had been renting for a while.

Get to know your market. First of all, install the PatMa Property Tools plugin to your browser. It's free. It's actually designed for people who are in the Buy-To-let market, but it works for anyone.

Then you can look at a property like this;

https://www.rightmove.co.uk/properties/113981948#/

What you'll now see is the history of what's going on with it.

Now you've got a lot more information about what's going on with the property. We can have a guess at what might have happened.

September - went on the market. No interest.

November - dropped the price by £20k to get more interest.

December - still no interest, so dropped by another £10k. 2 weeks later, finally sent SSTC.

BUT....

Something obviously went wrong with the purchase - either the valuation didn't meet the offer price or the buyer couldn't get a mortgage on it (or perhaps just pulled out).

So yes, this property may have an opportunity to put a cheeky bid in (although 20%, I'm afraid it's not going to happen).

You can also now use this tool to see other similar SOLD properties in the area (tick the SSTC box when you're searching).

https://www.rightmove.co.uk/property-for-sale/find.html?searchType=SALE&locationIdentifier=POSTCODE^679411&insId=1&radius=5.0&minPrice=250000&maxPrice=350000&minBedrooms=2&maxBedrooms=&displayPropertyType=bungalows&maxDaysSinceAdded=&includeSSTC=true&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&newHome=&auction=false

Now, notice that the plugin has quickly given you more information in the search window alone.

As we can see, this one sold in 6 days.

https://www.rightmove.co.uk/properties/115511279#/

Now this one clearly has an advantage, being detached, but we can see the market is definitely moving.

These, btw, are for 2 bed bungalows - something that is never particularly popular. Not suitable really for a family and mostly older people so a limited market.

Try with 3 bed semis in the area under £325k and I'll show you a pile of houses that sold within a couple of days. Anything currently on the market is either in a tricky area or has an obvious flaw.

That's not to say the houses are worth any more than £325k, but it's a seller's market and there aren't many about.

This is absolutely amazing advice. Thank you so much!

grumiofoundation

HotPantsCruiser said:

Would 10 or 15% not be more reasonable at the moment?

Since the housing market is fully homogenous then yes of course sweeping statements are completely reasonable.

or

Unless you know the property you cannot make sweeping generalisations about knocking a set amount off.


Which do you think is closer to reality?

HotPantsCruiser

Slithery said:

HotPantsCruiser said:

Would 10 or 15% not be more reasonable at the moment?

10%-15% over?

Yes, probably a more reasonable offer at the moment.

Doesn`t that often mean a "down valuation" though when the lender does their survey/valuation?

comeandgo

HotPantsCruiser said:

Slithery said:

HotPantsCruiser said:

Would 10 or 15% not be more reasonable at the moment?

10%-15% over?

Yes, probably a more reasonable offer at the moment.

Doesn`t that often mean a "down valuation" though when the lender does their survey/valuation?

No, you need to have the extra money ready to bridge the gap between mortgage value and purchase price which is why first time buyers are not having much luck just now, they don’t have the extra needed.

lookstraightahead

HotPantsCruiser said:

Slithery said:

HotPantsCruiser said:

Would 10 or 15% not be more reasonable at the moment?

10%-15% over?

Yes, probably a more reasonable offer at the moment.

Doesn`t that often mean a "down valuation" though when the lender does their survey/valuation?

Yes it does. Occasionally people are happy to plug the gap between the value of the property and the amount the seller wants, with their savings. Doesn't rest easy with a lot of people though, for obvious reasons. 

lookstraightahead

comeandgo said:

HotPantsCruiser said:

Slithery said:

HotPantsCruiser said:

Would 10 or 15% not be more reasonable at the moment?

10%-15% over?

Yes, probably a more reasonable offer at the moment.

Doesn`t that often mean a "down valuation" though when the lender does their survey/valuation?

No, you need to have the extra money ready to bridge the gap between mortgage value and purchase price which is why first time buyers are not having much luck just now, they don’t have the extra needed.

The valuation is for the property, not the mortgage.

HotPantsCruiser

comeandgo said:

HotPantsCruiser said:

Slithery said:

HotPantsCruiser said:

Would 10 or 15% not be more reasonable at the moment?

10%-15% over?

Yes, probably a more reasonable offer at the moment.

Doesn`t that often mean a "down valuation" though when the lender does their survey/valuation?

No, you need to have the extra money ready to bridge the gap between mortgage value and purchase price which is why first time buyers are not having much luck just now, they don’t have the extra needed.

Having the money ready won`t prevent a "down-valuation" though, and when people see a  bank saying something is worth less they are then less inclined to make up the difference with their own cash leading to a vicious circle for the seller as they are now seen as over-priced?

Slinky

Oh well, we'll never know if the OP offering 20% below was successful as the poster is now a 'Deleted User'.