What to offer based on 'recent' sold prices?

HillStreetBlues

NervyBuyer said:

House I'm interested in is on for £280k. Originally-identical house on the same side of the same street sold for £250k in March (on for 260 - I viewed it but didn't get an offer in in time).

Look at it another way, was that house sold too cheaply?

ThisIsWeird

NervyBuyer said:

House I'm interested in is on for £280k. Originally-identical house on the same side of the same street sold for £250k in March (on for 260 - I viewed it but didn't get an offer in in time). Another on the same side sold for £225k last November. They all have basically the same footprint and layout, and appear to be in the same condition/decorative order (good) but have slightly different extensions. £280k has an additional shower room, £250k has a larger kitchen, both of which make quite a difference to the original house but obviously in different ways (the shower room to me is more valuable). Otherwise I can't see anything to choose between them.

Asking prices do seem to have been going up in the area (very little data on sold prices as they take so long to show up online), and there seems to be no shortage of buyers at that price range, but an additional 20-30k seems a little optimistic. House has already been on the market 6 weeks which is unusual (although it's maybe a quieter time of year) - comparable properties are usually going in less than 10 days. It's also right at the top end of current asking prices for that size of house in the area.

I really like the house and don't want to lose it quibbling over small thousands or with an insultingly low first offer, but equally want to preserve my pot for repairs as much as possible - 2 windows will need replacing before any other issues are found (old property). I'm a cash buyer, immediately proceedable, but the vendor appears not to be in a rush as they have already moved out to their partner's house. 

Would £265k be a reasonable opening gambit?

Enjoying the house-buying game, NervyB?! :-)
As a cash buyer, you should be in a strong position, and would be if the house was in a chain. 
Are you looking elsewhere, too, or is this street it for you? 
To try and answer your Q, although I have no expertise here, I'd have thought that £265k is a perfectly reasonable opening gambit, accompanied by a brief justification for the figure, and emphasising your strong position as a cash buyer (whether it helps here or not). So, tell them you are comparing it with recent sales which all went for less than this and for under their asking prices, and how you think a larger kitchen would have been a nicer use of space (poss true, but white fib for you), and that you know it needs a bit of work although acknowledging it's generally tidy, you believe that £265k is a fair offer for this fellow.
See what happens.
Meanwhile, keep looking elsewhere - ideally with other agents, and drop into this offer conversation a comparison with a house you are 'also considering'; "We're trying to weigh up what's more important to us - we prefer this actual house, but the one we saw last week in Acacia Ave with Slimeball&Scraper is in a nicer location..." This EA will want you as a buyer of their property. 
Or, cut to the chase, make it clear that you believe it's overpriced - give succinct reasons (comparison with others, that the others have gone for under asking, windows need replacing, poor use of extension, cash buyer...) - but are still seriously considering it, so; "What will they accept to take it off the market right now?"
They should come back with a figure, and you do with it what you will - accept or negotiate, but at least you will have their attention as a serious buyer.
See? It's a game :-)

warby68

It is something of a game with shifting goalposts.

I would however disagree with justifying your offer. Too much room for offence and quibbling and makes you sound less confident. A common response would be to tell you to offer on one of those better houses. A simple 'that is what I am offering ' PLUS your good points as a buyer is better in my view.

£265k is only around 5% below asking so well within a generally accepted, 'reasonable', non offence causing, serious offer.

jimbog

NervyBuyer said:

BarelySentientAI said:

NervyBuyer said:

This house hasn't sold for about 17 years IIRC from the sale history.

The 2 houses are very very very similar, they have just used the small extended space differently. I don't see anywhere that I have said the prices should be identical. I thought 15k over the other's sold price might be reasonable bearing in mind prices going up and the difference in value to me. 

You've said that you thought this house was worth £250k in March because the other one sold for £250k in March.  It's where your reluctance to pay "a 20k increase" has come from.  That's identical pricing to me.

I bet if this was a vendor's thread wondering why they'd had no offers in 6 weeks people would be saying 'look at comparable sold prices nearby'.

Or they may be just waiting for someone like you who is on the cusp of offering more

NervyBuyer

BarelySentientAI said:

Because that's your question - what is this worth - not has the price increased by X or y since March.

That's a big factor in how you work out what a house is worth, before actually agreeing a price! There are no more recent sold prices to go on, and nothing else on the market in the immediate area. Anything currently on the market in the wider area hasn't sold, so its current worth can't be judged, and only the parties involved know the figures in a transaction that is at Sold STC stage. Puzzling why using sold price data as a starting point appears to be such a daft idea.

Anyway, I've decided not to offer at all for now. I saw 2 other houses in different parts of the town on the same day and I'm taking more time to think about the benefits of each.

Thanks for everyone's input.

BikingBud

NervyBuyer said:

BarelySentientAI said:

Because that's your question - what is this worth - not has the price increased by X or y since March.

That's a big factor in how you work out what a house is worth, before actually agreeing a price! There are no more recent sold prices to go on, and nothing else on the market in the immediate area. Anything currently on the market in the wider area hasn't sold, so its current worth can't be judged, and only the parties involved know the figures in a transaction that is at Sold STC stage. Puzzling why using sold price data as a starting point appears to be such a daft idea.

Anyway, I've decided not to offer at all for now. I saw 2 other houses in different parts of the town on the same day and I'm taking more time to think about the benefits of each.

Thanks for everyone's input.

Have you informed the EA to pass onto the vendor? 

Your justifications are purely that, and only need to be acceptable to you, to ensure you get a deal that suits you.

If you look elsewhere and this property is still for sale in 4-6 weeks then it might support a lower offer being more realistic and acceptable or it might indicate a stubborn seller.

Only time will tell.

BarelySentientAI

NervyBuyer said:

BarelySentientAI said:

Because that's your question - what is this worth - not has the price increased by X or y since March.

That's a big factor in how you work out what a house is worth, before actually agreeing a price! There are no more recent sold prices to go on, and nothing else on the market in the immediate area. Anything currently on the market in the wider area hasn't sold, so its current worth can't be judged, and only the parties involved know the figures in a transaction that is at Sold STC stage. Puzzling why using sold price data as a starting point appears to be such a daft idea.

Anyway, I've decided not to offer at all for now. I saw 2 other houses in different parts of the town on the same day and I'm taking more time to think about the benefits of each.

Thanks for everyone's input.

It isn't daft, but look at your phrasing.

If I was the vendor and you said "I'm offering this because I don't think your house price has gone up by 20k in four months", I'd be confused and slightly annoyed that you were insinuating I was going for a cash grab like some sort of flipper.

If I was the vendor and you said "I'm offering this because I think this is what it's worth, it's a bit better than the one that sold in March but not 20k better", I'd follow your logic.

Even better would be "I don't think it's worth 20k more than this other house that I can actually buy because it's on the market", but that's not always possible.

RHemmings

Certainly in many cases that I see, houses are put on the market significantly above recent/comparable sold prices. If people were then always paying the initial asking price, in the areas I'm familiar with, house price inflation would probably be in double digits. It seems to me that sellers are listing for aspirational prices, and bargaining is an important skill in the market. 

While the OP's question is now answered as they are looking at other properties - for people who find this thread in the future (or are looking now), more help with offering strategy would be, I think, useful. 

ThisIsWeird

warby68 said:

It is something of a game with shifting goalposts. Sure is!

I would however disagree with justifying your offer.* Too much room for offence and quibbling and makes you sound less confident. A common response would be to tell you to offer on one of those better houses. A simple 'that is what I am offering ' PLUS your good points as a buyer is better in my view.

£265k is only around 5% below asking so well within a generally accepted, 'reasonable', non offence causing, serious offer.

* I respectfully disagree. But with caveats.

The 'justification' shouldn't be laboured, shouldn't be 'offensive', but should be couched in fact, and be succinct. This info does/should get fed back to the vendor, and if the EA keeps saying the same thing, then the vendor will be better informed. "Why hasn't my house sold?" "Well, a couple of viewers thought it overpriced compared to other recent sales in the area".

I see no reason to not include an explanation. This is a relationship between the buyer and the vendor, via the EA. You be a (largely) open and honest broker, and the EA will/should respect you for it.

warby68

ThisIsWeird said:

warby68 said:

It is something of a game with shifting goalposts. Sure is!

I would however disagree with justifying your offer.* Too much room for offence and quibbling and makes you sound less confident. A common response would be to tell you to offer on one of those better houses. A simple 'that is what I am offering ' PLUS your good points as a buyer is better in my view.

£265k is only around 5% below asking so well within a generally accepted, 'reasonable', non offence causing, serious offer.

* I respectfully disagree. But with caveats.

The 'justification' shouldn't be laboured, shouldn't be 'offensive', but should be couched in fact, and be succinct. This info does/should get fed back to the vendor, and if the EA keeps saying the same thing, then the vendor will be better informed. "Why hasn't my house sold?" "Well, a couple of viewers thought it overpriced compared to other recent sales in the area".

I see no reason to not include an explanation. This is a relationship between the buyer and the vendor, via the EA. You be a (largely) open and honest broker, and the EA will/should respect you for it.

5% below asking is a decent and normal (proportion wise) offer - it doesn't actually need a justification.