Cheeky offer?

Albermarle

poseidon1 said:

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.

As per the comments in bold, you can not predict the reaction unless you have some knowledge of the Vendors situation and personality.

Someone who is very emotionally attached to the house, may well react badly to a lowball offer. Maybe it was their childhood home/parents house, or maybe they have spent many hours working on it/very proud of it etc.
This type of person will also probably have an unrealistic view of the value of the house, so quite possibly the asking price will be on the high side as well.
I think EA's struggle with these types of vendors generally.

Someone a bit more dispassionate, will more likely just say no to a lowball offer and see if the buyer increases it.

Probably many are somewhere in between .

ReadySteadyPop

inigma said:

Download the property log extension in chrome, see how long it has been on the market and how frequently they have dropped the price.
Workout mortgage costs using the 30 year UK gov yield (over 5% now)
If the seller is desperate be considerate (unless they are a landlord or house flipper then it is fair game).  Seen a few houses that were purchased a year ago, renovated and had their prices dropped to the price they purchased for.
Market is weird at the moment I'm holding out a bit longer before I go bargain hunting.

Remember:

Only when the tide goes out do you discover who's been swimming naked.

Warren Buffett

Good advice.

ReadySteadyPop

Uriziel said:

I would not make any offer below asking price. It is up to them to reduce price if they see that nobody is interested.

Surely a few low offers would encourage them to drop their price though?

youth_leader

Not if their purchase needed near to the asking price.  I was £30K short of buying a house in this village because of my foolish decision to go to auction.

MobileSaver

ReadySteadyPop said:

MobileSaver said:

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

Conversely when a buyer tried that with me they were absolutely gutted when I accepted someone else's offer and refused to entertain them raising their initial low-ball offer.

The successful buyer was over the moon and over the next ten years I sporadically received letters telling me how much they loved living in what was a really nice property.

So there is no right or wrong answer. If the OP is not fussed whether they get this property or not then low-ball every time. On the other hand if this is a property that ticks all the boxes in a market where choices are few and far between then going too low could be one of the biggest mistakes they ever make...

Most people would find that strange if not highly unlikely, can you share some of what they said to you? 

It was because I was tardy in changing my address details for one particular financial organisation. Every year or so the buyer would very kindly forward me mail that was still going to the old address and they'd always include a note saying how much they loved the house.

ReadySteadyPop said:

This is a different market today, sellers trying for aspirational prices just sit on the market for months or even years.

You've been saying it's a different market for well over a decade now...

Of course what you're missing is that many sellers will be thinking "so what?" if they have to wait months longer if that means they're going to make an extra £20k, £30k or £40k or even more!

ReadySteadyPop

youth_leader said:

Not if their purchase needed near to the asking price.  I was £30K short of buying a house in this village because of my foolish decision to go to auction.

 But if auction was your only chance to sell how can it be a foolish decision? If the seller had other offers and would  not drop their price by 30k then you couldn`t afford that house, selling a house isn`t like money in the bank, the amount you get is market variable.

ReadySteadyPop

MobileSaver said:

ReadySteadyPop said:

MobileSaver said:

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

Conversely when a buyer tried that with me they were absolutely gutted when I accepted someone else's offer and refused to entertain them raising their initial low-ball offer.

The successful buyer was over the moon and over the next ten years I sporadically received letters telling me how much they loved living in what was a really nice property.

So there is no right or wrong answer. If the OP is not fussed whether they get this property or not then low-ball every time. On the other hand if this is a property that ticks all the boxes in a market where choices are few and far between then going too low could be one of the biggest mistakes they ever make...

Most people would find that strange if not highly unlikely, can you share some of what they said to you? 

It was because I was tardy in changing my address details for one particular financial organisation. Every year or so the buyer would very kindly forward me mail that was still going to the old address and they'd always include a note saying how much they loved the house.

ReadySteadyPop said:

This is a different market today, sellers trying for aspirational prices just sit on the market for months or even years.

You've been saying it's a different market for well over a decade now...

Of course what you're missing is that many sellers will be thinking "so what?" if they have to wait months longer if that means they're going to make an extra £20k, £30k or £40k or even more!

I doubt many sellers would chase a serious buyer away in this market for 40k, average 40k out over "months", it really isn`t worth the stress hassle and wasted time of trying to find new buyers, and what happens if the next offer is even lower!

Herzlos

I don't know why you're inferring there's something special about 'this' market, or why that indicates that sellers would be foolish to not automatically accept the first offer they get no matter how low it is. Plenty of properties still sell for asking price (or above).

ReadySteadyPop said:

inigma said:

Download the property log extension in chrome, see how long it has been on the market and how frequently they have dropped the price.
Workout mortgage costs using the 30 year UK gov yield (over 5% now)
If the seller is desperate be considerate (unless they are a landlord or house flipper then it is fair game).  Seen a few houses that were purchased a year ago, renovated and had their prices dropped to the price they purchased for.
Market is weird at the moment I'm holding out a bit longer before I go bargain hunting.

Remember:

Only when the tide goes out do you discover who's been swimming naked.

Warren Buffett

Good advice.

Interestingly, I've only seen one poster on here mention the property log extension, or gov yields (though you forgot to mention bonds?). 

Herzlos

ReadySteadyPop said:

Uriziel said:

I would not make any offer below asking price. It is up to them to reduce price if they see that nobody is interested.

Surely a few low offers would encourage them to drop their price though?

You would think so. It'd at least start a negotation and give the seller the opportunity to adjust the price to speed up the sale. No communication at all may mean they are oblivious to the interest. 

MobileSaver

ReadySteadyPop said:

MobileSaver said:

ReadySteadyPop said:

MobileSaver said:

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

Conversely when a buyer tried that with me they were absolutely gutted when I accepted someone else's offer and refused to entertain them raising their initial low-ball offer.

The successful buyer was over the moon and over the next ten years I sporadically received letters telling me how much they loved living in what was a really nice property.

So there is no right or wrong answer. If the OP is not fussed whether they get this property or not then low-ball every time. On the other hand if this is a property that ticks all the boxes in a market where choices are few and far between then going too low could be one of the biggest mistakes they ever make...

Most people would find that strange if not highly unlikely, can you share some of what they said to you? 

It was because I was tardy in changing my address details for one particular financial organisation. Every year or so the buyer would very kindly forward me mail that was still going to the old address and they'd always include a note saying how much they loved the house.

ReadySteadyPop said:

This is a different market today, sellers trying for aspirational prices just sit on the market for months or even years.

You've been saying it's a different market for well over a decade now...

Of course what you're missing is that many sellers will be thinking "so what?" if they have to wait months longer if that means they're going to make an extra £20k, £30k or £40k or even more!

I doubt many sellers would chase a serious buyer away in this market for 40k, average 40k out over "months", it really isn`t worth the stress hassle and wasted time of trying to find new buyers, and what happens if the next offer is even lower!

Seriously?!? You don't think a whole load of people would be more than happy waiting four or six months or longer to earn an extra £40k? That may not be a lot of money to you but to most people that's not an amount they'd throw away just like that and yes it would be worth the stress, time and hassle.

Obviously there'll be a range of different sellers at any one time; some will be desperate and will bite your hands off even if taking a £40k haircut, some will compromise just so they can move on with their lives and some will be in no particular rush and wait as long as it takes to get top dollar. Same as it ever was basically and little different to how the market has been for my entire adult life.