Offer Advice

RiaAnn

Quick summary: Property on the market at £710 and quickly dropped 4% 5 months ago, changed agents and went back on same asking in Sept (so no price drop in nearly 5 months) Fairly unusual property so more difficult to value but feel out initial offer ~7% under asking was fair. As far as we know the only interested buyer at the moment, but our position was not great, we are now on the market but were not at the time of the offer. we did go up a bit to 6% under asking and could go a bit higher but just wonder if we are better to wait until we have an offer on ours. It has been a week and no contact from estate agent since saying they wanted a higher offer. Any estate agents out there advice - how likely is it an offer would be accepted before we have an offer on ours.

bobster2

It would be easier to advise if you give the actual amounts.

So it's being marketed with an asking price of £680,000 and you've offered something like £632,000?

RiaAnn

Thats correct and then did increase to 640K.  

eddddy

As your own property isn't under offer, the Estate Agent will probably advise the seller not to accept your offer.

Instead, the seller might 'leave your offer on the table'. i.e. Wait to see what happens first... you accept an offer on your property, or they get an offer from a proceedable buyer.

So there's probably no point in increasing your offer at this stage.

Mutton_Geoff

As Eddddy says, in the agents eyes, you are not "proceedable" so your offer doesn't have much gravitas I'm afraid.

When you have sold subject to contract, things will change.

TheJP

How did you arrive at your offer price from the asking price, whats the rationale? That might help understand a bit better.

bobster2

OP may not have a special rationale - just like most people trying to get the best price they can.

Houses sell (complete) on average for 3-5% below asking price.So it's pretty typical to go in with an initial offer perhaps 7-8% below - hoping to end up, after some back-and-forth, with a completion price in the 3-5% below asking price range.

That's how things have played out with all the purchases/sales I've been involved with (as both a buyer and seller). As a seller I'd already set the asking price so that I'd be comfortable knocking 3-5% off.

Gentoo365

If you don't have an offer on your house you can't really 'give' anything apart from a good price. It is of course always worth asking.

Once you have an offer, and even better once you are 'chain complete' (i.e. your buyer has offer, or is cash or FTB) you can maybe sell that as a reason why they should accept your offer.

For one thing they don't know how picky you will be on your selling price (are you going to hold out for ages to get a good price, or will you accept a 6-7% under offer to speed things along for everyone). 

When I was selling I was willing to go a bit lower IF the buyer was totally ready, so you probably need to get into that situation.

TheJP

bobster2 said:

OP may not have a special rationale - just like most people trying to get the best price they can.

Houses sell (complete) on average for 3-5% below asking price.So it's pretty typical to go in with an initial offer perhaps 7-8% below - hoping to end up, after some back-and-forth, with a completion price in the 3-5% below asking price range.

That's how things have played out with all the purchases/sales I've been involved with (as both a buyer and seller). As a seller I'd already set the asking price so that I'd be comfortable knocking 3-5% off.

You are in a stronger position if you have some sort of rationale as to how you arrived at that figure 7-8% below otherwise the seller will think that's all you can afford. I.e. similar properties have sold for £x which means in the current market i feel the property is worth £y.

Then there is the situation if anything in a survey arises will the OP want to further negotiate? Is the property at the current asking price affordable to the OP? They may get the property at x% below asking but the seller may not budge if repairs are needed. 

I have sold both my properties at asking or slightly above and declined any negotiation due to the items being current regs which did not affect the value of the property. Each of my offers on properties have been slightly lower than asking between 1-3% which took into recent comparable sales and some work that i spotted on viewings (didn't have a survey either time). 

bobster2

TheJP said:

You are in a stronger position if you have some sort of rationale as to how you arrived at that figure 7-8% below otherwise the seller will think that's all you can afford. I.e. similar properties have sold for £x which means in the current market i feel the property is worth £y.

Yes - a rationale might be helpful in persuading a seller. But the EA might not even pass on the rationale - just the number and whether it sounds like you're willing to negotiate up.

The trouble with placing too much emphasis on rationales is that it can give the impression there is some objective true price - that an impartial observer would agree was correct. When in fact all that matters is whether the buyer and seller feel comfortable with the price.

The reason why I, when selling, would always set an asking price above what I ultimately hope to achieve - is that way this can be negotiated down a little and the buyer feels like they are getting a good deal. Same reason many shops sell a product at one price for a little while - just so they can market it with some % off at a later date.

RiaAnn

Thank you for all the comments.  Very helpful.  Yes there was good rationale for our offer based on comparison with what has sold nearby recently, and repairs needed.  We couldn’t go to their asking but were honest about that before viewing.   We could go a bit higher but feels heart over head, we don’t want to loose it.  And dilemma really is do we wait until sold or go to our max now.  It is a 1970’s property so expecting survey might throw up something than needs further negotiation