How much to offer?

annetheman

Admit in advance I didn't read the whole thread but I disagree with the theory you should only offer on properties below your budget, depending on the market. I have recently offered on 2 houses IN LONDON above my budget - both offers have been accepted. One was £10k under asking, the second was £25k under asking. I explained my reasoning as to why the price I offered was fair, and that was accepted both times. Sadly had to pull out of the 1st and the 2nd is looking like a lender survey failure.

I think the issue for you OP is that your reasons aren't really compelling**. Cosmetic issues and fixtures and fittings you can (and would arguably be expected to) reasonably and easily replace are not compelling reasons for reductions.

Your position as a FTB is a good thing to highlight - but again, it isn't a rationale for price reduction. Consider it a differentiator that *may* make you a more attractive prospect than a competing offer, if there are multiple options for the vendor to consider.

In the end, the worst that will happen is they will reject the offer - so just offer what you can pay if you really want it, only offer less than you can if you are prepared to lose it - remember to ringfence separately for your Legal and moving costs etc. If they reject and they get no more offers, they may get back to you. Keep looking, in case they don't.

**edit added below to be more specific

Work needed: 

• Plastering and repainting - not a good reason for reduction

• New carpets 2x rooms (current carpet has a gap of about 2 inches between the carpet edge and wall??) - no

• Bathroom cupboard shabby - no

• Washing machine very old and will need replacing - definitely no

• One window shutter fallen off hinge (looks rusted) - no

• Front door looks like it will need replacing soon (listed building so guessing this will be expensive) - unless you can get a specialist to quote for the replacement, and it is required (i.e. the door doesn't function as a door right now) nope.

Other reasons:

• EFC of E (more realistically F) - there is apparently a gas connection there but it's been capped and the meter taken away. Current landlord didn't know this as last 2 boilers (at least) have been electric. No idea if the gas connection is live or dead. - ask more about this, could be a good reason to negotiate the cost of gas connection and new boiler.

• We’re first-time buyers with no-chain - nope, this is more a potentially good differentiator in your favour if it comes down to multiple offers, not a rationale for reduction

• We have agreement in principle (for ~ 33% of the flat value) - absolutely not a good rationale for reduction, they'd reject anyone who isn't proceedable with proof of funds so assume this is the minimum requirement, not a benefit

• We are currently on monthly renting - can move in whenever convenient (however there is currently a mature student tenant in the place until July - there would be no exchange of contracts until they have left) - as above, this is more a potentially good differentiator in your favour if it comes down to multiple offers, not a rationale for reduction

• Judging for how the other flats above and below of it sold (being higher EPC of C) - £310k and £300k (second one was initially listed as £350k by the same estate agent) - actual sold values NOT listing prices are by far your best rationale and a great indication of what to offer, but consider the condition and square footage of the other flats (also floor number etc), are those other flats really comparable?

• Looks like other flats in the building are currently being tenanted out, not live-in landlords? - not a rationale for reduction, this could change at any time either way.

• Right in front of Kwik Fit/ slightly ugly road - obviously the vendor will take into account location (probably one of the primary considerations) when deciding the price, definitely not a good reason and definitely do not say this (may even be a bit insulting to think they didn't think of this and then call the road ugly)

• Will need secondary glazing in bedroom at least for noise - again not a good reason if this doesn't need (not just preferential warrant) replacement

My advice is don't even go into this much detail. Imagine if someone was listing off all the negatives about your home, would you want to sell to them for a lower price? Also, the estate agent is busy and doesn't have time for a long read - most of it will be explained verbatim to the vendor and then just a £number, your name and the date of offer put in writing. Appeal to the EA's better nature, instead of basically saying they did a crappy job valuing it by ignoring the road, other properties' values in the area etc.

I've succeeded in offering low by keeping it very generic along the lines of "the vendor has accentuated the original features very well and we do think the flat is perfect for us [make it clear you like it, be complimentary], we are in a great position to proceed with a smooth sale [your appeal as a proceedable FTB] and this is the most we can offer [be clear you've stretched as much as you can, DO NOT list off reasons you're deducting from what you can offer]. I hope you will agree this offer is very fair [use the word fair a lot], given the minor updates required [only say this if the boiler/window/door etc are actual needed updates, not preferences]"

Smalltownhypocrite

annetheman said:

Admit in advance I didn't read the whole thread but I disagree with the theory you should only offer on properties below your budget, depending on the market. I have recently offered on 2 houses IN LONDON above my budget - both offers have been accepted. One was £10k under asking, the second was £25k under asking. I explained my reasoning as to why the price I offered was fair, and that was accepted both times. Sadly had to pull out of the 1st and the 2nd is looking like a lender survey failure.

I think the issue for you OP is that your reasons aren't really compelling**. Cosmetic issues and fixtures and fittings you can (and would arguably be expected to) reasonably and easily replace are not compelling reasons for reductions.

Your position as a FTB is a good thing to highlight - but again, it isn't a rationale for price reduction. Consider it a differentiator that *may* make you a more attractive prospect than a competing offer, if there are multiple options for the vendor to consider.

In the end, the worst that will happen is they will reject the offer - so just offer what you can pay if you really want it, only offer less than you can if you are prepared to lose it - remember to ringfence separately for your Legal and moving costs etc. If they reject and they get no more offers, they may get back to you. Keep looking, in case they don't.

**edit added below to be more specific

Work needed: 

• Plastering and repainting - not a good reason for reduction

• New carpets 2x rooms (current carpet has a gap of about 2 inches between the carpet edge and wall??) - no

• Bathroom cupboard shabby - no

• Washing machine very old and will need replacing - definitely no

• One window shutter fallen off hinge (looks rusted) - no

• Front door looks like it will need replacing soon (listed building so guessing this will be expensive) - unless you can get a specialist to quote for the replacement, and it is required (i.e. the door doesn't function as a door right now) nope.

Other reasons:

• EFC of E (more realistically F) - there is apparently a gas connection there but it's been capped and the meter taken away. Current landlord didn't know this as last 2 boilers (at least) have been electric. No idea if the gas connection is live or dead. - ask more about this, could be a good reason to negotiate the cost of gas connection and new boiler.

• We’re first-time buyers with no-chain - nope, this is more a potentially good differentiator in your favour if it comes down to multiple offers, not a rationale for reduction

• We have agreement in principle (for ~ 33% of the flat value) - absolutely not a good rationale for reduction, they'd reject anyone who isn't proceedable with proof of funds so assume this is the minimum requirement, not a benefit

• We are currently on monthly renting - can move in whenever convenient (however there is currently a mature student tenant in the place until July - there would be no exchange of contracts until they have left) - as above, this is more a potentially good differentiator in your favour if it comes down to multiple offers, not a rationale for reduction

• Judging for how the other flats above and below of it sold (being higher EPC of C) - £310k and £300k (second one was initially listed as £350k by the same estate agent) - actual sold values NOT listing prices are by far your best rationale and a great indication of what to offer, but consider the condition and square footage of the other flats (also floor number etc), are those other flats really comparable?

• Looks like other flats in the building are currently being tenanted out, not live-in landlords? - not a rationale for reduction, this could change at any time either way.

• Right in front of Kwik Fit/ slightly ugly road - obviously the vendor will take into account location (probably one of the primary considerations) when deciding the price, definitely not a good reason and definitely do not say this (may even be a bit insulting to think they didn't think of this and then call the road ugly)

• Will need secondary glazing in bedroom at least for noise - again not a good reason if this doesn't need (not just preferential warrant) replacement

My advice is don't even go into this much detail. Imagine if someone was listing off all the negatives about your home, would you want to sell to them for a lower price? Also, the estate agent is busy and doesn't have time for a long read - most of it will be explained verbatim to the vendor and then just a £number, your name and the date of offer put in writing. Appeal to the EA's better nature, instead of basically saying they did a crappy job valuing it by ignoring the road, other properties' values in the area etc.

I've succeeded in offering low by keeping it very generic along the lines of "the vendor has accentuated the original features very well and we do think the flat is perfect for us [make it clear you like it, be complimentary], we are in a great position to proceed with a smooth sale [your appeal as a proceedable FTB] and this is the most we can offer [be clear you've stretched as much as you can, DO NOT list off reasons you're deducting from what you can offer]. I hope you will agree this offer is very fair [use the word fair a lot], given the minor updates required [only say this if the boiler/window/door etc are actual needed updates, not preferences]"

too be fair your examples of asking for money off an above price house has ended in two non proceedable situations so all you have shown is 100% failure rate which proves me right.

Of course they might knock some money off the sale price but if OP can't afford the fees, living costs and works its still non proceedable. There far more too it than just the asking price.

annetheman

Smalltownhypocrite said:

annetheman said:

Admit in advance I didn't read the whole thread but I disagree with the theory you should only offer on properties below your budget, depending on the market. I have recently offered on 2 houses IN LONDON above my budget - both offers have been accepted. One was £10k under asking, the second was £25k under asking. I explained my reasoning as to why the price I offered was fair, and that was accepted both times. Sadly had to pull out of the 1st and the 2nd is looking like a lender survey failure.

I think the issue for you OP is that your reasons aren't really compelling**. Cosmetic issues and fixtures and fittings you can (and would arguably be expected to) reasonably and easily replace are not compelling reasons for reductions.

Your position as a FTB is a good thing to highlight - but again, it isn't a rationale for price reduction. Consider it a differentiator that *may* make you a more attractive prospect than a competing offer, if there are multiple options for the vendor to consider.

In the end, the worst that will happen is they will reject the offer - so just offer what you can pay if you really want it, only offer less than you can if you are prepared to lose it - remember to ringfence separately for your Legal and moving costs etc. If they reject and they get no more offers, they may get back to you. Keep looking, in case they don't.

**edit added below to be more specific

Work needed: 

• Plastering and repainting - not a good reason for reduction

• New carpets 2x rooms (current carpet has a gap of about 2 inches between the carpet edge and wall??) - no

• Bathroom cupboard shabby - no

• Washing machine very old and will need replacing - definitely no

• One window shutter fallen off hinge (looks rusted) - no

• Front door looks like it will need replacing soon (listed building so guessing this will be expensive) - unless you can get a specialist to quote for the replacement, and it is required (i.e. the door doesn't function as a door right now) nope.

Other reasons:

• EFC of E (more realistically F) - there is apparently a gas connection there but it's been capped and the meter taken away. Current landlord didn't know this as last 2 boilers (at least) have been electric. No idea if the gas connection is live or dead. - ask more about this, could be a good reason to negotiate the cost of gas connection and new boiler.

• We’re first-time buyers with no-chain - nope, this is more a potentially good differentiator in your favour if it comes down to multiple offers, not a rationale for reduction

• We have agreement in principle (for ~ 33% of the flat value) - absolutely not a good rationale for reduction, they'd reject anyone who isn't proceedable with proof of funds so assume this is the minimum requirement, not a benefit

• We are currently on monthly renting - can move in whenever convenient (however there is currently a mature student tenant in the place until July - there would be no exchange of contracts until they have left) - as above, this is more a potentially good differentiator in your favour if it comes down to multiple offers, not a rationale for reduction

• Judging for how the other flats above and below of it sold (being higher EPC of C) - £310k and £300k (second one was initially listed as £350k by the same estate agent) - actual sold values NOT listing prices are by far your best rationale and a great indication of what to offer, but consider the condition and square footage of the other flats (also floor number etc), are those other flats really comparable?

• Looks like other flats in the building are currently being tenanted out, not live-in landlords? - not a rationale for reduction, this could change at any time either way.

• Right in front of Kwik Fit/ slightly ugly road - obviously the vendor will take into account location (probably one of the primary considerations) when deciding the price, definitely not a good reason and definitely do not say this (may even be a bit insulting to think they didn't think of this and then call the road ugly)

• Will need secondary glazing in bedroom at least for noise - again not a good reason if this doesn't need (not just preferential warrant) replacement

My advice is don't even go into this much detail. Imagine if someone was listing off all the negatives about your home, would you want to sell to them for a lower price? Also, the estate agent is busy and doesn't have time for a long read - most of it will be explained verbatim to the vendor and then just a £number, your name and the date of offer put in writing. Appeal to the EA's better nature, instead of basically saying they did a crappy job valuing it by ignoring the road, other properties' values in the area etc.

I've succeeded in offering low by keeping it very generic along the lines of "the vendor has accentuated the original features very well and we do think the flat is perfect for us [make it clear you like it, be complimentary], we are in a great position to proceed with a smooth sale [your appeal as a proceedable FTB] and this is the most we can offer [be clear you've stretched as much as you can, DO NOT list off reasons you're deducting from what you can offer]. I hope you will agree this offer is very fair [use the word fair a lot], given the minor updates required [only say this if the boiler/window/door etc are actual needed updates, not preferences]"

too be fair your examples of asking for money off an above price house has ended in two non proceedable situations so all you have shown is 100% failure rate which proves me right.

Of course they might knock some money off the sale price but if OP can't afford the fees, living costs and works its still non proceedable. There far more too it than just the asking price.

I think OP wants to know "how can I rationalise a lower offer", not "how can I ensure my purchase won't fall through".

The key insight for OP is my offers below asking were accepted in the London market based on the reasons I gave, and my reasons weren't to do with cosmetic etc reasons as theirs are.

The reasons I pulled out I can summarise (look at my threads for much more detail); in short House 1 was proceedable - I pulled out because it was too far from the tube station compared to house 2, after sellers were happy with new CGT threshold. Nothing to do with the condition of the house. They chose me (chain, mortgage) over an investor without a chain.

House 2 is sadly TBC, fingers crossed but it's not looking good - they accepted £25k less because I mentioned the "condition", vaguely; I'll find out on Tuesday if I can find a lender who is happy with what I now know is a single skin extension - not unheard of but my LTV is high. I will have to pull out there. EDIT TO ADD SHAMELESS PLUG IN CASE ANYONE CAN ADVISE: https://forums.moneysavingexpert.com/discussion/6511758/single-skin-wall-where-most-of-the-kitchen-is#latest

I think OP has a good chance as long as they don't list off uncompelling reasons and potentially offend.

helpmeplzz

Apologies as it seems I've opened a can of worms! 

I'm really sorry to have offended anyone... I'm a bit clueless and some advice/help was all I was after...
I didn't realise that a house price is so set-in-stone... Based on what I've read on MSE content I was told to offer below asking price (10%) and that being FTB was a plus as there was no chain (and it even said this meant you could ask for a discount). If thats not the case then that's my bad and I'm grateful to have been told differently...