What’s an acceptable offer in the current market?

kjs31

I am going to make an offer on a house I like once I get to do a second viewing. It’s 22 years old and in relatively good condition but the kitchen is the original one and so are the bathrooms, and the sanitary wear is a bit dated in style. It’s perfectly liveable though and nothing needs doing urgently. Estate agent has said that there have been 2 offers so far but neither has been accepted. I’m not sure a. whether there have been 2 other offers (don’t estate agents always say that?), b. whether the offers have been too low, or c. the potential buyers aren’t in a position to proceed. The property has been on the market for just over 3 weeks. 

I’m thinking of putting in an offer at just over 4% below the asking price of 925k. Does that sound reasonable? I’m not expecting that to be accepted but would like to get it for around 900k if I can, although I would pay the asking price if I absolutely had to as I’ve looked and looked for the right house and this house ticks most of my boxes. I just don’t want to offend the seller to the extent that it damages negotiations but I’m thinking that if I put in a higher starting offer it means that the price could push up more than I need to. 

I don’t need a mortgage and sold my property a few months ago so I can move fast or slow depending on what the seller wants. 

Grizebeck

How long is a piece of string 

user1977

What's the property actually worth? You can't judge your offer purely against whatever they've chosen as the asking price.

Mstty

Is this the property you talk about in your other post

https://forums.moneysavingexpert.com/discussion/6466994/wanting-to-buy-a-different-property/p1

CSI_Yorkshire

Only you and the seller know what offer is "acceptable".

If this is the house that you've pulled out of another purchase to buy, is it worth losing it over 3-4% of today's price?

It's obvious that the original kitchen and "dated in style" sanitary wear were there at the outset, so why would you expect it cheaper for that reason?

tightauldgit

An acceptable offer is whatever the seller is willing to accept. And offers cant push up past what you want them to because you're in charge of what you offer. Unfortunately there's no hard and fast rules of what is and isn't going to work. 

I know some people are weird but I don't see why a seller would be offended by any reasonable offer to the extent that they wouldn't listen to a higher one and at the end of the day if the seller wants to sell then they will accept the best offer they have on the table. 

All you can really do is phone their agent and say you're considering an offer of whatever the 4% under is and see how they react. 

kjs31

As to what it’s worth, there are lots of houses in the road, all detached, but they differ in size from about 120m2 to 260m2. The house I was buying previously is smaller and about 100k less. It was marketed for 825k, I offered 800k and had an offer accepted at 810k. The Zoopla estimate for that one is pretty spot on but it’s wildly out for the one I am now interested in. The Zoopla estimate is £1.2m but that’s way above the market for the road. It’s worth 900 - 925 I think but surely people don’t offer the asking price from the get go in the current market? One of the largest houses in the road sold recently but I don’t know what it eventually went for. It was up for 980k in May 22 and was under offer for over a year before finally selling last month. Prices have levelled off since then and the house I’m interested in isn’t the largest in the road. 

AlexMac

4% under was, by co-incidence exactly what I paid for our current home, but in an average market 12-13 years ago (in fact, it was actually just over 4% under; £720k paid against a £750k ask, and that was up £20k on our first offer which was £700k - 6.6% under). 

The house had been let out for a few years previously by an absent owner, so was also very tired and struggling to sell. The owner had just put it up with a second Estate Agent, so was presumably getting impatient, which isn't necessarily the case with the one you are keen on, and which I think you say has only just come on the market?

Only you and local agents know if the local market is hot or cold, but (ignoring the fact that exactly 4% off; £888k sounds a weird sum?), maybe an offer of £890k isn't insulting.  It also implies they could coax you up to £900k or more?

On the other hand, our street has since become more desirable and properties sell in days, so this year, buyers have to move fast.  In consequence, Agents' asking prices are toppy; one up the road sold in days at an incredible £1.4mil; although that was 6.6% under the frankly mad ag of one and an 'alf mil!

And although I fancy myself as a negotiator, and usually offer 5-7% under, I did offer full whack twenty years ago, in a then hot market, and bought quickly at the asking price, whether or not we believed the Agent's claim that there were several offers close.  

Your advantage is that you're a cash buyer and flexible on timing; so you'll obviously trowel that on!  Good luck

gemma.zhang

It’s really subjective.

if I were on a chain, I would offer very close to asking price to secure the property. If I were chain free, will make most of that bargain chip!

for 925k, reverse psychology, I would guess seller would seek to get 900k minimum. So depends on if you feel there is competition or not, how much you love the house. If I know no one else is bidding, I will start lower and start negotiation from there to try your luck.

We had to offer 35k over asking to secure a property which was undervalued by agent. Then got snatched up by chain free buyer offering 75k over asking price 😓… then their chain free wasn’t in fact chain feee and they lost their buyer, we were very lucky to pick up the slacks.

well this is in West London surprised how many ppl are Chainfree or cash rich. 


good luck ! 

RogerPensionGuy

I know a few people trying to sell houses in the UK that have just reduced their prices slowly over this last year, they keep hoping to sell for summer 2022 prices, they waited for the market to cool.

They just waited too long as the slow process of interest rates going to the average normal range and then many people's affordable is reduced. 

The last 12/13 years so much has been done allowing people to being exposed to too much debts if the the cheap or free money train pulls out of the station.

I don't think many institutions in general really stress tested enough, think they just used +3% rates going up and no thinking about inflation, slow pay and taxes increasing and bands being frozen(currently 2028)  

All the various help to buy schemes propping up the builders and stamp duty holidays to wind up the prices etc.

A reasonable offer is what someone will pay for sumthink and if the seller not happy it's enough, they can just keep trying to sell item or keep it.

I normally never pay much attention to any sticker prices, previously sold prices, % off any figure or much else.

A few other people I know have purchased houses this last year, normally make a few lowish offers and make their decisions based on what people will sell it at.

We had all better get used of UK average interest rates being about average for a period, the 0.5% or 1.5% days have been and gone.
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https://thebla.co.uk/uk-interest-rate-history-base-rate-graph/

theartfullodger

Whatever the seller accepts.