Cheeky offer?

4500_Donavan

Hi. When making an offer on a property, what do you think the boundaries are between a cheeky offer and an offer likely to offend the vendors? 

Is 5% below asking price acceptable and normal? 

Is 10% below likely to cause offence? 

Asking price is £355k.

Thanks for your feedback. 

david29dpo

5% being £337250 ...you may get away with
10% being £319500 ... no
All depends on other like for like houses for sale nearby though

twoLou

It all depends as well how long the property has been on the market?
what the sellers forward position is, for example have they found somewhere and are in a hurry to move?
How it compares to sold prices of similar properties etc

I try and find out as much from the agent as I can regarding the above,  then  maybe make a 
an offer accordingly.
Good luck.

bobster2

10% is usually the boundary. Because an initial offer is a basis for negotiation - and even with a buyer offering 10% below asking they may hope through negotiation they might bring you up to 5% below or more.

But people are not always completely rational - as with pricing in shops the leading digits can have a psychological impact. So 10% off £330,000 (£297,000) would likely upset a seller much more than 10% off £340,000 (£306,000) because the latter still starts with a 3.

So in your case - £320,000 as an offer is likely to be seen as less "cheeky" than £319,500. That extra £500 buys you some goodwill!

Alfrescodave

Why does it now seem to be the norm to offer less than asking price, even if the house has just come on the market?  Each situation is different and what to offer should be determined on many factors.

bobster2

Alfrescodave said:

Why does it now seem to be the norm to offer less than asking price, even if the house has just come on the market?  Each situation is different and what to offer should be determined on many factors.

It's not a new thing. Offering less than asking has always been common. Houses sell (complete) on average for 3-5% below the advertised price (whether it's called an "asking" price or whatever).

What's relatively new is EA introducing new terms like "offers in excess of" around 10-15 years ago. To try to discourage buyers from offering less than asking.

theartfullodger

Offer whatever you like.  Causing offence is entirely legal.

I offered iirc about 20% below asking price in early 2000s.  Got the rudest, bluntest ever rejection via agent from seller.  I thanked them politely 

Made exact same offer 1 week later via solicitors.  Accepted.  Owned it about 20 years.

Go for it!

youth_leader

I think it is a good thing to put yourself in the vendor's position and speculate on the scenarios. 

They might accept a lower offer because they know your survey will reveal that the roof needs replacing.  Or they might accept if they are downsizing, and it doesn't affect their forward purchase.  they might refuse because they are stretching themselves for the next purchase.  You can only find out by offering.

If you look at the section on Rightmove on house prices sold in the past, what do/did similar properties sell for?

ReadySteadyPop

Alfrescodave said:

Why does it now seem to be the norm to offer less than asking price, even if the house has just come on the market?  Each situation is different and what to offer should be determined on many factors.

Because borrowing costs have risen and asking prices are generally too high in many areas.

ReadySteadyPop

theartfullodger said:

Offer whatever you like.  Causing offence is entirely legal.

I offered iirc about 20% below asking price in early 2000s.  Got the rudest, bluntest ever rejection via agent from seller.  I thanked them politely 

Made exact same offer 1 week later via solicitors.  Accepted.  Owned it about 20 years.

Go for it!

Good advice, asking prices mean very little in a fast changing market.

poseidon1

4500_Donavan said:

Hi. When making an offer on a property, what do you think the boundaries are between a cheeky offer and an offer likely to offend the vendors? 

Is 5% below asking price acceptable and normal? 

Is 10% below likely to cause offence? 

Asking price is £355k.

Thanks for your feedback. 

Depends on the seller. If its their home , any percentage below asking could insult if they are the overly sensitive type ( no way you can tell their attitude in advance).

If its an investor ( ex landlord), then it's just business and what ever the intial offer its an opportunity to engage in a dialogue.

As an example a friend had an empty  flat on the market at an original £350k but with no serious enquires. Then reduced to £325k and got a £290k offer (11% below). After some negotiation ended up at £310k. Prospective buyer was trying it on a bit, but on the flip side my friend indicated he would have gone in low if positions were reversed.

Certainly my friend would have preferred nearer his lowered asking price, but recognised that  1 bed London flats are not the easiest to shift in the current market, so pragmatism won out in his case.