First Time Buyer - What do I offer?

SammyMarie

Hi everyone,

I am a newbie here! 

Myself and my boyfriend are currently looking to buy our first home but we are currently really struggling! We have our decision in principle and we have viewed quite a few properties now and put in offers on two of them but both were rejected as other buyers went well above asking price. We are finding it extremely hard to compete with these types of buyers. Since we have had our offers rejected there are not many other houses for sale in our budget. 

We have seen one house for sale which I love from the pictures (although not viewed yet). It has been on the market since February and already had the price reduced once. It is currently listed for £350,000 (was reduced from £365,000 in April). Our budget is £300,000. I haven't booked a viewing as I think its unrealistic that the sellers would accept £300,000 but is it worth trying? Its no onward chain and we are first time buyers so I would think that would put us in a good position. Interested to here thoughts? 

Many thanks !

Exodi

You have nothing to lose by making an offer, though I would say you will naturally find it further demotivating looking at houses listed for £350k+ if your maximum budget is £300k.

I'd say look at houses closer to your budget, or accept you're going to get a lot of offers rejected! That said, you should start to get a feel for what is fair value and house sales have started to slow, so you may be able to pick up a bargain.

Sorry just to pick up on your last point "we are first time buyers so I would think that would put us in a good position" - first time buyers commonly hold this view, we see it expressed all the time on this forum. In reality, a lot of sellers are put off first time buyers as they can have wildly unrealistic expectations, have knee-jerk responses to surveys and can be incredibly impatient.

While some will obviously value the fact you are chain-free, I wouldn't walk around thinking it gives you a leg up over other buyers. Cash will always remain king.

MultiFuelBurner

SammyMarie said:

Hi everyone,

I am a newbie here! 

Myself and my boyfriend are currently looking to buy our first home but we are currently really struggling! We have our decision in principle and we have viewed quite a few properties now and put in offers on two of them but both were rejected as other buyers went well above asking price. We are finding it extremely hard to compete with these types of buyers. Since we have had our offers rejected there are not many other houses for sale in our budget. 

We have seen one house for sale which I love from the pictures (although not viewed yet). It has been on the market since February and already had the price reduced once. It is currently listed for £350,000 (was reduced from £365,000 in April). Our budget is £300,000. I haven't booked a viewing as I think its unrealistic that the sellers would accept £300,000 but is it worth trying? Its no onward chain and we are first time buyers so I would think that would put us in a good position. Interested to here thoughts? 

Many thanks !

It might be worth contacting the estate agent and seeing if the vendors are open to offers and explain your budget and situation.

To me the offer would be too low but they may be desperate to sell and you will be exactly what they are looking for.

You won't know until you view and open up the dialogue.

fackers_2

Keep viewing and putting offers in. Worth doing it because there could be a seller who’s desperate or you’re the only offer. 

It’s likely for every 10 offer, 1 will be accepted. Keep pushing and don’t become disheartened if it’s rejected. 

Make sure you are in the best available position, MIP ready and solicitor waiting + even say to the seller that you’re happy to order the search packs upon acceptance which will speed the process up by a few weeks. 

Good luck and keep your head up!

TheJP

Sounds like you need to mange your expectations on what houses are within your budget. No seller is going to accept an offer £50k below asking after a £15k reduction. As someone said FTBs can often live in a fantasy world due to the lack of experience in buying and selling. Look at house within your budget, you may have more luck that way.

jonnydeppiwish!

TheJP said:

Sounds like you need to mange your expectations on what houses are within your budget. No seller is going to accept an offer £50k below asking after a £15k reduction. As someone said FTBs can often live in a fantasy world due to the lack of experience in buying and selling. Look at house within your budget, you may have more luck that way.

Whilst I’d normal agree, my last purchase was on the market at £440k, I offered £375k and it was accepted. Admittedly there was buy in from the EA.

Op, how does the price compare of this house to similar properties s?

TheJP

jonnydeppiwish! said:

TheJP said:

Sounds like you need to mange your expectations on what houses are within your budget. No seller is going to accept an offer £50k below asking after a £15k reduction. As someone said FTBs can often live in a fantasy world due to the lack of experience in buying and selling. Look at house within your budget, you may have more luck that way.

Whilst I’d normal agree, my last purchase was on the market at £440k, I offered £375k and it was accepted. Admittedly there was buy in from the EA.

Op, how does the price compare of this house to similar properties s?

What were the variables in this sale and when was the sale? Did you compare recent house sales to help make your offer? Was it as we were coming out of the pandemic boom? there is always a reason why a large reduction offer is accepted. 

In the OPs case they are basing it on their budget rather than what the house is worth, my point is why look at houses initially if they are £50k above your budget. I'm guessing you probably could have afforded the £440k price if you needed to?

CSI_Yorkshire

SammyMarie said:

It is currently listed for £350,000 (was reduced from £365,000 in April). Our budget is £300,000. 

If you think that it's only worth £300k, then that's fine.  The seller might agree (although that seems unlikely with the information we have).

If you think that it's actually worth £350k, then you can still make your offer, but be prepared for short shrift.

The problem with browsing the market or viewing things out of the top of your budget is that the things you can actually afford will probably seem less good by comparison.

jonnydeppiwish!

TheJP said:

jonnydeppiwish! said:

TheJP said:

Sounds like you need to mange your expectations on what houses are within your budget. No seller is going to accept an offer £50k below asking after a £15k reduction. As someone said FTBs can often live in a fantasy world due to the lack of experience in buying and selling. Look at house within your budget, you may have more luck that way.

Whilst I’d normal agree, my last purchase was on the market at £440k, I offered £375k and it was accepted. Admittedly there was buy in from the EA.

Op, how does the price compare of this house to similar properties s?

What were the variables in this sale and when was the sale? Did you compare recent house sales to help make your offer? Was it as we were coming out of the pandemic boom? there is always a reason why a large reduction offer is accepted. 

In the OPs case they are basing it on their budget rather than what the house is worth, my point is why look at houses initially if they are £50k above your budget. I'm guessing you probably could have afforded the £440k price if you needed to?

I don’t disagree with you with reference to the price range being looked at, but if the situation is right, then it is now possible to get a property at a reasonable discount compared to asking price.

It’s well worth the Op asking the question as there is, imo, a lot over priced properties currently on the market.

Yes mine was probate, but we were in a chain and this was pre-CoVID, and our budget was £400k. 

Sunsaru

Based you your budget, I would be looking at houses £320k tops. I think on a £350k house the drop is gonna be too much.

However, you can but ask and you never know. 

Good luck with your hunt.

simon_or

SammyMarie said:

Hi everyone,

I am a newbie here! 

Myself and my boyfriend are currently looking to buy our first home but we are currently really struggling! We have our decision in principle and we have viewed quite a few properties now and put in offers on two of them but both were rejected as other buyers went well above asking price. We are finding it extremely hard to compete with these types of buyers. Since we have had our offers rejected there are not many other houses for sale in our budget. 

We have seen one house for sale which I love from the pictures (although not viewed yet). It has been on the market since February and already had the price reduced once. It is currently listed for £350,000 (was reduced from £365,000 in April). Our budget is £300,000. I haven't booked a viewing as I think its unrealistic that the sellers would accept £300,000 but is it worth trying? Its no onward chain and we are first time buyers so I would think that would put us in a good position. Interested to here thoughts? 

Many thanks !

It is unrealistic to expect such a huge reduction. In a large city with tens of EAs, there's no harm in making optimistic offers. But if it's a small town with one or two big EAs who hold all the stock, then you need to be careful about making offers that may come across as frivolous as you don't want to be labelled a 'time-waster' that EAs know of and mentally set aside when it comes to good properties that will sell.

Is your budget the max that you want to spend (but you can borrow more based on your income) or the max that you've established that you can afford from a mortgage point of view? 

In any case if the gap to the properties you like are is 20-30k, then it may be worth checking with a good broker what your maximum borrowing potentially is so you know how much you can stretch to if the right house comes along.