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

lookstraightahead

Cash buyers means that vendors actually have to move quite quickly potentially, and most don't want to. They want a buyer then they want to spend ages looking around in their own sweet time 🙄

theoretica

yksi said:

You're offering on properties needing work and in the bottom end of the market (like I was). The competition will be stiff if it's mortgageable because the other bidders will also be FTBs. That makes you more attractive than them, but not more attractive than the grey army who are buying an investment property and are also cash buyers.

If it's not mortgageable there won't be as many bidders, but you're still unlikely to be the only offer, unless it's burnt out or needs a new roof of there are no windows or no kitchen, in which case, go nuts, you don't have much to lose. Bid rejected? Ok, you try a bit more. Laughed out of the room? Ok, next property. It wouldn't be the end of the world.

And you are competing with both experienced and wannabee property developers. 

One useful marker might be how long a property has been on the market - if it has sat around unsold it is more likely to be only you as a buyer negotiating with the seller (but who may have unrealistic ideas of the value).  If the property has just come on the market there may be other potential buyers who have also just seen it and are deciding how interested they are/trying their luck and any with 'priced to sell' asking prices are likely to be snapped up at this stage.

propertyhunter

Deleted_User said:

steampowered said:

Imagine the same property which is actually worth £200k.

One seller lists for £220k, the other lists for £180k.

If you offered the first seller 20% under asking, it would be the same as paying asking ...

Offering a fixed % under asking price is a silly strategy. It takes no account of what the property is actually worth!

Yeah, lol, I get it. I regret making this thread now.

Please don't regret it - people here are just very experienced and don't want you to make a decision you could regret. It sometimes comes across as a bit abrupt, but actually most people are just eager to help and quickly steer you in the right direction rather than waffle.

jimbog

It would make sense to sell at auction than accept 20% below. 

Estate Agents won't take you seriously and won't give you the 'heads up' of something coming onto the market

[Deleted User]

I feel even more confused now than before I started. I know now at least that places do go for 20% less. It is a thing that happens. But moreover, I think I really should just go with my own instincts depending on each individual property, the state of repair it's in, against what similar properties in my area have actually gone for. In which case, 20% less may be totally reasonable, or totally unreasonable. This seems wisest rather than "20% less than asking price of every property I see". 

yksi

It does. And yeah, it is hard to gather that info. Set Rightmove and Zoopla to alert you of anything and everything that compares to the ones you've been looking at, and save every single property into your wish list. Over time, looking through that list will give you an idea of what they're going for. There's also a rightmove browser addon which shows you if a property price has been changed and how long it sat untouched for - quite useful if you're looking for one that you think is overpriced.

sammyjammy

Deleted_User said:

I wish it wasn't so hard to find out what properties have gone for. It seems to take ages between properties being sold and the information on how much it went for being made available. 

Don't be sorry, its all learning even the people who don't say what you want to hear.

The issue with the time taken to show sold prices is a bit of a COVID legacy, in ordinary times you'd probably be looking at three months whereas now its more like 12!

Put the hard work and research in and you'll get much more knowledgeable over time and don't forget most doer uppers will be priced accordingly

caprikid1

Deleted_User said:

I feel even more confused now than before I started. I know now at least that places do go for 20% less. It is a thing that happens. But moreover, I think I really should just go with my own instincts depending on each individual property, the state of repair it's in, against what similar properties in my area have actually gone for. In which case, 20% less may be totally reasonable, or totally unreasonable. This seems wisest rather than "20% less than asking price of every property I see". 

Still you could offer 20% under asking for a property 30% over priced and both you and the seller would be happy (-;

[Deleted User]

I compiled a list of sources in response to the "lol where you getting 20% from?" question, and it wouldn't go through because I can't post links. 

I'm trying to educate myself but it's a total minefield when I read that 25% is the point where it's too low, "if you aren't embarrassed by your first offer, it's too high" and actually, I should offer OVER the asking price, etc, etc.. 

Well at least I'm learning that is absolutely not a one-size-fits all thing and varies drastically depending on a number of factors including where you are in the country.  

[Deleted User]

yksi said:

It does. And yeah, it is hard to gather that info. Set Rightmove and Zoopla to alert you of anything and everything that compares to the ones you've been looking at, and save every single property into your wish list. Over time, looking through that list will give you an idea of what they're going for. There's also a rightmove browser addon which shows you if a property price has been changed and how long it sat untouched for - quite useful if you're looking for one that you think is overpriced.

This is fantastic advice, thank you so much! Installing that browser add-on right now.