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

[Deleted User]

My mother recently bought a property for 7% less than asking price, she originally offered 10% less than the asking price. She was also a cash buyer. Perhaps that's more reasonable for me to do also then. I'm just wondering how low I could actually push it. 

user1977

What do you think the market value of the property actually is, in comparison with the asking price?

eidand

Deleted_User said:

I don't have a clue about house buying, lol, that's literally why I'm here. 

And no advice on the kinds of offers I should reasonably be making. Hmm. 

Look, if you don't have a clue then you need to start educating yourself on it.

I zeroed in on a very specific area which I knew, not very far away from where I lived. I poured over rightmove listings, checked sold prices, checked asking prices, even looked at zoopla valuations.

Go and view lots of properties to get a feeling of things. After a while you will get a general idea of reasonable prices. What you offer depends on how much you want that specific property and what the market is like in that area. If it's a hot market, don't even bother, go in at asking price and see what happens.

If it's not too hot then maybe you have some wiggle room but that depends on how long a property has been on the market and the specific situation of the vendors. If however, you go in with silly offers, without using common sense and doing your homework, you'll find that no one will take you seriously.

spoovy

All you can hope to get on here about that is opinions, there is no such thing as "accurate" advice on this subject.

How much is the house worth, in your honest opinion?  And what price would you be happy to pay for it (not necessarily the same number)?

I don't think this is a market for trying to play games with vendors. Make a sensible offer based on the above factors is my advice.

ccbrowning

Depends on the market. I sold my home and had no under-asking price offers and the highest bidder needed a mortgage and I still went with them. My buyer had a super short chain tho, which came into consideration. You just offer what you think the property is worth, but I doubt many are going to sell to you for less if someone with a mortgage is offering more.

eidand

ccbrowning said:

Depends on the market. I sold my home and had no under-asking price offers and the highest bidder needed a mortgage and I still went with them. My buyer had a super short chain tho, which came into consideration. You just offer what you think the property is worth, but I doubt many are going to sell to you for less if someone with a mortgage is offering more.

exactly right, vendors won't care where the money is coming from, cash or mortgage it makes no difference.

The only time it makes a difference is if the property is not mortgage-able so then you really need a cash buyer. Other than that it won't matter that much.

Alderbank

comeandgo said:

If you came in at 20% under and first time buyer I’d think you had no clue about house buying so would have nothing to do with you.  Don’t make yourself look stupid.

It's possible to compare EA's advertised asking prices with the actual sale prices, which are in the public domain.

The magazine City A.M. recently (October) carried out exactly that exercise.
https://www.cityam.com/aggressive-valuations-london-home-sellers-overprice-their-properties-by-40-per-cent/
The results are interesting. The average UK property sold for 13% under. That was distorted by the figures from Scotland which were only 4% (we have a different, some say better, system here).
Most areas in England were about 20% under.

Region	Average Asking Price	Average Sold Price	Difference (%)	Difference (£)
Scotland	£184,149	£177,166	-4%	£6,983
Yorkshire and The Humber	£210,728	£180,324	-14%	£30,404
East of England	£384,561	£312,076	-19%	£72,486
North West	£230,045	£185,171	-20%	£44,874
West Midlands region	£277,229	£220,759	-20%	£56,470
North East	£183,006	£144,935	-21%	£38,071
East Midlands	£271,891	£214,169	-21%	£57,722
Wales	£238,770	£187,960	-21%	£50,810
South East	£459,999	£354,278	-23%	£105,721
South West	£364,958	£277,178	-24%	£87,780
London	£833,994	£494,673	-41%	£339,321
Britain	£296,950	£258,464	-13%	£38,486

[Deleted User]

Alderbank said:

comeandgo said:

If you came in at 20% under and first time buyer I’d think you had no clue about house buying so would have nothing to do with you.  Don’t make yourself look stupid.

It's possible to compare EA's advertised asking prices with the actual sale prices, which are in the public domain.

The magazine City A.M. recently (October) carried out exactly that exercise.
The results are interesting. The average UK property sold for 13% under. That was distorted by the figures from Scotland which were only 4% (we have a different, some say better, system here).
Most areas in England were about 20% under.

Region	Average Asking Price	Average Sold Price	Difference (%)	Difference (£)
Scotland	£184,149	£177,166	-4%	£6,983
Yorkshire and The Humber	£210,728	£180,324	-14%	£30,404
East of England	£384,561	£312,076	-19%	£72,486
North West	£230,045	£185,171	-20%	£44,874
West Midlands region	£277,229	£220,759	-20%	£56,470
North East	£183,006	£144,935	-21%	£38,071
East Midlands	£271,891	£214,169	-21%	£57,722
Wales	£238,770	£187,960	-21%	£50,810
South East	£459,999	£354,278	-23%	£105,721
South West	£364,958	£277,178	-24%	£87,780
London	£833,994	£494,673	-41%	£339,321
Britain	£296,950	£258,464	-13%	£38,486

Thank you!

I am buying in the South East, so perhaps.. I might not be being so stupid?

theoretica

Alderbank said:

comeandgo said:

If you came in at 20% under and first time buyer I’d think you had no clue about house buying so would have nothing to do with you.  Don’t make yourself look stupid.

It's possible to compare EA's advertised asking prices with the actual sale prices, which are in the public domain.

The magazine City A.M. recently (October) carried out exactly that exercise.
https://www.cityam.com/aggressive-valuations-london-home-sellers-overprice-their-properties-by-40-per-cent/
The results are interesting. The average UK property sold for 13% under. That was distorted by the figures from Scotland which were only 4% (we have a different, some say better, system here).
Most areas in England were about 20% under.

Region	Average Asking Price	Average Sold Price	Difference (%)	Difference (£)
Scotland	£184,149	£177,166	-4%	£6,983
Yorkshire and The Humber	£210,728	£180,324	-14%	£30,404
East of England	£384,561	£312,076	-19%	£72,486
North West	£230,045	£185,171	-20%	£44,874
West Midlands region	£277,229	£220,759	-20%	£56,470
North East	£183,006	£144,935	-21%	£38,071
East Midlands	£271,891	£214,169	-21%	£57,722
Wales	£238,770	£187,960	-21%	£50,810
South East	£459,999	£354,278	-23%	£105,721
South West	£364,958	£277,178	-24%	£87,780
London	£833,994	£494,673	-41%	£339,321
Britain	£296,950	£258,464	-13%	£38,486

Worth pointing out that mathematically the difference between average asking price and average sold price being 13% does not mean that the average house went for 13% less than its own asking price.  Average prices get really distorted by the higher priced properties and this analysis seems especially vulnerable to really expensive properties advertised which didn't sell.

If you set your personal marker by how much below the asking price you offer then beware of confining yourself to properties that were overpriced in the first place and missing out on a property which had a low asking price.

yksi

You won't get a single clear answer here because there are so many factors involved.

A cash buyer up against other bidders where the seller isn't buying - being a cash buyer will have no effect whatsoever.
A cash buyer offering on a mortgagee-in-possession on a property which is unmortgageable and has been on the market a long time and has some kind of major problem with it - they might say yes, because there won't be many offers.

My flat was advertised at 45k, MIP, unmortgageable, I offered 40k and it was accepted in hours. That's 11% under asking and I definitely didn't expect it to be accepted. But my situation is as rare as hen's teeth, as are the people willing to take on that kind of risk.

Assuming you're offering on a bog-standard, appropriately-priced property without major faults and with other people viewing it, a regular in-chain sale, it's very likely you will be told to take a running jump. Most of that is the timing because properties are in huge demand right now.

I suspect that real-term amounts probably matter more to people. £20k off a 100k property, it's a slim maybe, but 100k off a half mill property and you'll be laughed out of the room. Normally you'd think nothing to lose, right? The problem is that buyers care emotionally about their home and actually make decisions with their heart, and they can and will shut you out completely as a buyer if you offend them. Yes, even if you came back with the whole asking price, they'll even choose a lower bid from someone else just because they didn't like you!