Offers over versus Guide price

AskAsk

We are selling a house in London in Tottenham and we have had 2 estate agents round to value the property.  Filtering all the garbage sales talk, the realistic price for the property is £515k - £525k.

One agent has recommended we go to market with guide price £525k and the other says he doesn't think this is a good idea as it will exclude anyone looking up to £500k as the band on rightmove jumps from £500k to £550k, whereas below the £500k mark, it increases in increments of £25k.

We would be happy if we got £500k but my concern of advertising "Offers over £500k", will attract people who will come to view the property thinking that they will get it for under £500k and I would prefer to only show the property to people who are looking at the right price.

Anyone got any views on this matter?  I can't make up my mind as who is right so would like to canvass opinion as that helps me to make a decision.

I am not new to selling and buying properties but I tend to put a property up for sale at an asking price and not "guide" or "offers over".

TheJP

For me Overs over £500k tells me £500k is your lowest figure and if i want the property then i may need to go higher. Again it all depends on who is interested and the comparable properties in the area.

AskAsk

TheJP said:

For me Overs over £500k tells me £500k is your lowest figure and if i want the property then i may need to go higher. Again it all depends on who is interested and the comparable properties in the area.

one EA believes that if we put the house on guide price £525K, then we are accepting an offer around that mark, so either lower or higher, but we would catch the attention of those looking at the £550k mark as well.  Although offers over £500k would have the same effect for catching the attention of people looking at £550k mark.

the other agent thinks it is better to put "offers over £500k" to get lots of interest in the hope of a bidding war to get to the £515k - £525k.

i can't make up my mind, which one is the better strategy.

RHemmings

A lot of people just ignore "offers over", and you will almost certainly get offers less than that figure. All you need to do is ask your estate agent not to pass on any offers less than £500k. At least, to stop the annoyance of getting offers less than that sent to you. 

The only question is whether putting the price "offers over £500k" will condition anyone interested in the property that it's worth £500k. Or that they have a chance of getting the property for, say, £501k. 

In the last few days I've noticed two flats come on around my way described as 'offers over'. In both cases I don't think that the flats are worth that and I thought 'dream on' to myself. In your case if it's clear that the property is worth more, then you won't get that reaction. At least from any sensible potential buyers.

I think that I've seen some properties being sold by a large national 'online' EA that had a guide price which was a range. E.g. 'guide price £500-525k'. If that's possible, then that's a stronger indication that maybe a buyer will have to go over £500k to get the house.  The wording may have been different, but I think it was a 'guide price'. 

pjs493

So last week I had an offer accepted on a property at 7.5% under the ‘offer over’ price. However, it had been on the market for over a year, had already had a price reduction, and other similar properties in the area for sale for similar figures were in an immaculate condition whereas this one needs the kitchen and bathrooms updating. It was a second home for the vendor and I got the impression they just wanted rid of it after it had been on the market for so long. 

I initially offered 10% under, they countered and we settled on 7.5% under. I’m in a strong position as a cash buyer which may have helped. But I also think there hasn’t been much interest in the property despite the agent implying that there had been when I viewed it. 

I think a lot of it will come down to where you are in the country and how mobile the market is for your type of property. You can set an offers over price and let the agent know that you won’t accept anything below that and they can mention that to people who view or express and interest. As the vendor, the price you accept is completely up to you. The agent will be obliged to inform you of any offers, but you can easily tell them to decline any offers that come in below the figure you want to achieve. 

RHemmings

pjs493 said:

So last week I had an offer accepted on a property at 7.5% under the ‘offer over’ price. However, it had been on the market for over a year, had already had a price reduction, and other similar properties in the area for sale for similar figures were in an immaculate condition whereas this one needs the kitchen and bathrooms updating. It was a second home for the vendor and I got the impression they just wanted rid of it after it had been on the market for so long.  

Did the property that you offered on change to 'offers over' when the price was reduced? I see that quite a bit. A house is on sale for £X, and after a while it gets its price reduced to £Y, but 'offers over' £Y. That always makes me think that the seller likely still wants what they did before. 

theartfullodger

People offer whatever they wish: Offers over doesn't mean that's what you get.  I offered more than 20% below the offers over price some 20 years ago. Got the bluntest, rudest no etc etc from agent.  I thanked them politely.

Made exact same offer a week later.  Agreed.  Sold on couple of years ago.

People can offer whatever they like.  It's what happens

pjs493

RHemmings said:

pjs493 said:

So last week I had an offer accepted on a property at 7.5% under the ‘offer over’ price. However, it had been on the market for over a year, had already had a price reduction, and other similar properties in the area for sale for similar figures were in an immaculate condition whereas this one needs the kitchen and bathrooms updating. It was a second home for the vendor and I got the impression they just wanted rid of it after it had been on the market for so long.  

Did the property that you offered on change to 'offers over' when the price was reduced? I see that quite a bit. A house is on sale for £X, and after a while it gets its price reduced to £Y, but 'offers over' £Y. That always makes me think that the seller likely still wants what they did before. 

No, it remained as ‘offers over’. When I viewed, the agent mentioned that the vendor had reduced the price from X, I asked if they’d be open to offer and she said they might be.

When I emailed the agent with my offer, they called me to clarify some things but spoke in a way that made me feel like they thought it was a serious offer and reasonable. In other words, they didn’t say, “I’ll present your offer to the vendor but I know they want to achieve something above the offers over price”. 

A couple of hours later she called me after speaking to the vendor and asked if there was any ‘wiggle room’, rather than blurting out my upper limit, I asked if the vendor had a figure in mind, they did, I made a second offer about 2/3s between my first offer and their counter. About ten minutes later I had another call to say my offer had been accepted. I’m pleased I played it cool and didn’t blurt out a second offer, but there’s no way of knowing whether I could have got it for my initial offer if I’d stuck to my guns. Ultimately I got it for less than I was prepared to pay, and the vendor got more than my initial offer thanks to some negotiation from the agent. 

It might be useful to point out that the same agent showed me around another very similar property, similarly priced but in a much better condition, so they were likely fully aware of compatible houses on the market, their condition, and asking/guide/offer over prices. Ultimately, I chose the property that needed more work so I could update it to my tastes over time and pay less up front. 

BobT36

The terminology is irrelevant, anyway. The buyer will offer what they're willing to pay. The price just gives a bit of indication "around" where it may be worth, in general. The specifics are then confirmed on viewing.

No point doing a bait & switch at £500k if you're not prepared to entertain offers "around" that (which could be lower). 
If you're adamant you only want OVER then set the initial price as over and just put up with it being in-front of less eyes on Rightmove. As those eyes searching "up to" the 500k category will be looking "around" that and not just "over" it. 

Also make sure your house is indeed priced reasonably based on the state, type, and competition. Look & verify yourself and try to be objective, than trusting estate agents pulling figures out of dark places..

RHemmings

Just a data point in the 'other direction' from my perhaps cynical view of 'offers over'. In looking around for other information, I found this property:

https://www.zoopla.co.uk/property/uprn/2465044657/

It was listed as 'offers over' £260k, and it sold approximately four months later for £274k. While it has an ensuite 4th bedroom loft conversion (presumably), I think that for a terraced house that £274k is a good price for the seller. Seems like someone had a good result, in my eyes. For it to sell for £14k over the 'offers over' figure, I would wildly guess that there was a bidding war. 

AskAsk

BobT36 said:

The terminology is irrelevant, anyway. The buyer will offer what they're willing to pay. The price just gives a bit of indication "around" where it may be worth, in general. The specifics are then confirmed on viewing.

No point doing a bait & switch at £500k if you're not prepared to entertain offers "around" that (which could be lower). 
If you're adamant you only want OVER then set the initial price as over and just put up with it being in-front of less eyes on Rightmove. As those eyes searching "up to" the 500k category will be looking "around" that and not just "over" it. 

Also make sure your house is indeed priced reasonably based on the state, type, and competition. Look & verify yourself and try to be objective, than trusting estate agents pulling figures out of dark places..

this is my worry, that we are going to attract tryers on and I don't want too much footfall, if the majority of the footfall is from people who are looking for £500k or less.  I think it will be a better strategy to do guide price £525K to attract the right people, and if we don't get any interest, we can also drop the price, which in itself is another marketing strategy to attract people.

reading your comment, and others, I am inclined to go for guide price £525K to begin with.