Making an offer

nomoney1

Hi, my partner and I are hoping to buy our first home. We have a decision in principle and have a budget of 165. The property that we have seen is [removed by Forum Team]. I tried posting the property pal link but it won’t let me. 

A semi detached 3 bed, 1 bathroom, which has been listed for about 2 weeks. There are currently no offers on the house at the moment. I think we are going to put an offer down but we have no idea where is a good place to start. The asking price is 155, but I’ve been told that you shouldn’t jump in straight at the asking price. Also, it’s clear to see that there is some work to be done to the house. Would anyone be kind enough to give me a number that they would put down for an initial offer please? Any advice is welcome. Thanks

Mark_d

In an ideal world you could get the property for 130k  to allow you to do work on the house - new kitchen, bathroom, flooring, painting/decorating.  However I would never offer more than 10% below the asking price.  So I think 140k would be a reasonable opening offer and with any luck you can secure the property for under 145k.

How does this sound to you?  Does this valuation make sense to you in the context of other properties you've viewed and considered?

nomoney1

Mark_d said:

In an ideal world you could get the property for 130k  to allow you to do work on the house - new kitchen, bathroom, flooring, painting/decorating.  However I would never offer more than 10% below the asking price.  So I think 140k would be a reasonable opening offer and with any luck you can secure the property for under 145k.

How does this sound to you?  Does this valuation make sense to you in the context of other properties you've viewed and considered?

Hi Mark_d, thanks for your quick reply. I was hoping for around 140, I was just unsure if that is too unreasonable. I think that seems like a fair price for the location also, some properties in the area have went for 160 but they are in much better condition and also have a garage. Thanks again! 

Linton

In my view:

Moving toward an agreed sale is a dialogue.  Each offer/response should give you more information and meaningfully reduce the gap between what you want to pay and what the seller wants.  You dont want the seller to just say no because then you have to start again in a weaker position.

So, do you seriously want the house in the condition it is in?  What are you able to pay? What do you think is reasonable to pay compared with similar houses in the area?  These are questions you should ask yourself, not tell us!  If you dont know, get the information you need to decide.

1) If the house in its current condition is what you want at something like the asking price, go in with an offer slightly down, a round figure no more than 5%, say £150K.  You are telling the buyer that you are serious and not playing games. Hopefully the buyer will say either "yes" or split the difference.

2) If you think the house is actually way over-priced you could make an offer at around what you think is reasonable.  If the seller simply says no, look elsewhere.

3) Alternatively he may lower the asking price.  If it's within range of what you are prepared to pay make a further offer close to what you can afford.  If not look elsewhere.  The seller may be deluded and reduce the asking price in 2 months time when he gets no offers.

The aim should be to reach an agreed price within 2-3 rounds.  What is a bad idea is to steadily up your offer by small amounts.  The seller can continue saying no.


Oh, one other possibility.  If the house is exactly what you want at a very good price just say yes.  Playing games with money that des not really matter could lose you the sale.

gwynlas

Are properties in your area selling quickly? Most sellers would not accept a low offer if property only on the market for 2 weeks and might not consider lowering the price for a couple of months.
The house is habitable at the moment so is the work you think it needs cosmetic or necessary?
You could go in with an offer based on necessary works, outlining probable costings in the hope of acceptance or at asking price subject to survey.

nomoney1

Thanks for the replies guys. The comments you’ve made are very informative and helpful. I’m going to view the house again on Wednesday with a family joiner to get his opinion on it, and a rough idea of cost of works. 

Hoenir

How many other properties have you viewed? Benchmarking is a usefull tool. Likewise how much you really like the property.  The decision isn't always purely financial. Some properties don't change hands for many decades. 

nomoney1

Hoenir said:

How many other properties have you viewed? Benchmarking is a usefull tool. Likewise how much you really like the property.  The decision isn't always purely financial. Some properties don't change hands for many decades. 

We have only viewed 1 other house. Housing does go fast where we are looking, and with a 1.5year old and living with parents we are maybe rushing a bit. But my partner and I both really like this house and the area. It seems homely if that makes sense. And the location is very convenient regarding child care and work

TheJP

nomoney1 said:

Hoenir said:

How many other properties have you viewed? Benchmarking is a usefull tool. Likewise how much you really like the property.  The decision isn't always purely financial. Some properties don't change hands for many decades. 

We have only viewed 1 other house. Housing does go fast where we are looking, and with a 1.5year old and living with parents we are maybe rushing a bit. But my partner and I both really like this house and the area. It seems homely if that makes sense. And the location is very convenient regarding child care and work

What did you do in the end OP?

nomoney1

TheJP said:

nomoney1 said:

Hoenir said:

How many other properties have you viewed? Benchmarking is a usefull tool. Likewise how much you really like the property.  The decision isn't always purely financial. Some properties don't change hands for many decades. 

We have only viewed 1 other house. Housing does go fast where we are looking, and with a 1.5year old and living with parents we are maybe rushing a bit. But my partner and I both really like this house and the area. It seems homely if that makes sense. And the location is very convenient regarding child care and work

What did you do in the end OP?

Hi, I put an offer in for 145k, went into a bidding war up to 151k. We put the 151k on and got sale agreed, 4K under asking price. So in the hands of the solicitor now. Good news for me and my partner, excited to get in and make it a home 🙂

RHemmings

nomoney1 said:

TheJP said:

nomoney1 said:

Hoenir said:

How many other properties have you viewed? Benchmarking is a usefull tool. Likewise how much you really like the property.  The decision isn't always purely financial. Some properties don't change hands for many decades. 

We have only viewed 1 other house. Housing does go fast where we are looking, and with a 1.5year old and living with parents we are maybe rushing a bit. But my partner and I both really like this house and the area. It seems homely if that makes sense. And the location is very convenient regarding child care and work

What did you do in the end OP?

Hi, I put an offer in for 145k, went into a bidding war up to 151k. We put the 151k on and got sale agreed, 4K under asking price. So in the hands of the solicitor now. Good news for me and my partner, excited to get in and make it a home 🙂

Great to hear @nomoney1. Good luck for a smooth conveyancing.