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

user1168934

Deleted_User said:

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

I recently bought in the South East. I can tell you that the market is absolutely crazy. After losing several houses to others I paid way over the asking price to get the property.

I feel like this may not be what you want to hear but in south east I doubt you will get any advantage out of being a cash buyer. You cannot generallise when offering on a property because there is no one formula for sellers to price their property. Sometimes properties are severely overpriced or have some serious issues and they stay on the market for a long long time - in one of these cases you might score an advantage. Basically you need someone who is desperate to sell but in the recent years I have not seen any stay on the market for long enough near where I was looking.

aoleks

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.

Spreadsheetman

user1168934 said:

Deleted_User said:

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

I recently bought in the South East. I can tell you that the market is absolutely crazy. After losing several houses to others I paid way over the asking price to get the property.

I feel like this may not be what you want to hear but in south east I doubt you will get any advantage out of being a cash buyer. You cannot generallise when offering on a property because there is no one formula for sellers to price their property. Sometimes properties are severely overpriced or have some serious issues and they stay on the market for a long long time - in one of these cases you might score an advantage. Basically you need someone who is desperate to sell but in the recent years I have not seen any stay on the market for long enough near where I was looking.

Same in North Norfolk, it's nuts. It's just insane that people are being forced to make what is likely the largest purchase in their life on the strength of a single fairly brief viewing.

One thing I have seen happening a lot recently is that people are offering on multiple properties to try and win at least one and then they stall the progress and keep looking to see if anything better comes along. There has been a lot of houses going sold and then bouncing back again a couple of weeks later in my local market. That's too soon for mortage/survey/valuation issues.

[Deleted User]

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! 

Ramouth

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! 

Yep - totally depends on area and what you are looking for.  If you are flexible on area and property type you will have a much better chance of finding something that no one else wants and get it for a great price.  If you have a long list of requirements and a popular search area that includes only a couple of hundred houses you have less chance of finding a bargain.

I think as others have said you need to stop thinking in terms of %off asking price and think about what a property is actually worth to you.  Some people will list for 10% over value to test the market.  Others will list at 10k under to generate interest.  The only way to know if you are getting a good deal is to really know your market.

DingDongitsKingKong

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! 

We are very sorry that you were not able to find the most suitable advice here. Glad things worked out for you. It does seem your case is somewhat an unusual one. The other users here will have been advising based on a much different set of circumstances.

aoleks

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! 

£10k on an average priced property is... 3.7%! that's a looooooooong way from 20%. even if you took a cheaper property, at £100000, it would still be only 10%. once again, your 20% is just unrealistic in normal times, let alone now. those few examples where people think a £100k house is worth £300k overnight, because of the "hot market", are not representative, nor relevant in the grand scheme of things.

all I'm saying is, pick your average priced house in any region of the UK, approach several estate agents with a 20% under offer and they'll either laugh in your face or kick you out for being a time waster.

but good luck buying for 20% under asking because you have cash hahaha.

gingercordial

It's true that for your part of the country and for the type of property you're after, an offer below asking price could be reasonable.  But it will be equally reasonable for mortgage-funded and cash buyers.  20% seems extremely low though.  I don't agree with the "you should be embarrassed by your first offer" theory as I think in this country that's equally likely to result in the seller simply refusing to deal with you.  

But anyway beware back seat drivers who have not researched your market.  When I was buying, my parents and in-laws both had lots of helpful comments to make about how we should "always" go in at x% below asking price, never offer asking price and god forbid more.  However that was based on their experience in other parts of the country, decades ago.  Similarly they were all for insisting we should demand lots of money off for issues in the survey or pull out, to the extent that we were almost reluctant to tell them that we'd split the difference with the seller, but they weren't the ones doing the negotiation or needing somewhere to live so all very easy for them to say!

Slinky

The only time I've been aware of 20% off being accepted is on some of those 'Place in the sun' type programmes where people have low offers on houses accepted where the presenter says 'it's been up for sale for 2 years'.  Not too many of those sorts of properties in the UK.

Noneforit999

Slinky said:

The only time I've been aware of 20% off being accepted is on some of those 'Place in the sun' type programmes where people have low offers on houses accepted where the presenter says 'it's been up for sale for 2 years'.  Not too many of those sorts of properties in the UK.

The shows where 95% of them buy absolutely nothing and just want a free holiday? We all watch them but you can tell most of them are timewasters or entirely unrealistic. £50k budget and they want a 4 bedroom villa with a pool right near the sea and they won't compromise.