Reasonable Offer?

abc.xyz

Hi all. Single FTB looking to purchase ASAP. My max budget is £180k, 5% deposit. For context, £165-180k currently seems to get me a modern 2-bed semi or a 3-bed semi in need of renovation. A lot of properties have been on the market for a couple of months or more, some with £5-10k reductions in that time.

I have three options I'm interested in:

1) Modern 2-bed semi
£180k
613 sq/ft
Listed last October for £190k, didn't sell, relisted in June for £180k
Not sure about vendor's position

2) Modern 2-bed semi
£175k
624 sq/ft
On market since July, £5k reduction
Vendor looking to upsize, has offer accepted on a new build

3) Outdated 3-bed semi
£180k
696 sq/ft
On market since July, £5k reduction
EA says vendor has been put into a care home

I know markets and prices differ between city and region, but what would be a reasonable under offer? Is 10% insulting? I've heard being a FTB looking to complete ASAP gives me some extra leverage.

It's been difficult to find comparable sales because the first two are 90s semis on estates with mostly detached houses, so no recent sales to go by. There are some recent sales for similar properties on the same street as the third, but they had much more modern bathrooms, kitchens, carpets, etc

Albermarle

For option 3 how would you be able to fund the work needed , as you seem to be on quite a tight budget?
Do you have any personal preference between )1 and 2)?

gwynlas

You decide on what you are prepared to offer taking into account pros and cons of each house.
For example is the three bed much larger overall so that increased ground floor space compensates for smaller third bedroom?
If option 3 is lhabitable then you will be able to add value by completing refurbishment when you can afford it.
A straightforward 10% off looks harsh whereas opening discussion at £160-£165k and going up a little in £2k increments ought to secure a sale I think

abc.xyz

Albermarle said:

For option 3 how would you be able to fund the work needed , as you seem to be on quite a tight budget?
Do you have any personal preference between )1 and 2)?

It would be a case of saving up and fitting a new bathroom/kitchen in a few years time. The rest of the house is fine. It's just an older person's home so not as modern as I'd like

I prefer house #2, but the area/estate of house #1. #3 I feel is a better investment long-term

gwynlas said:

You decide on what you are prepared to offer taking into account pros and cons of each house.
For example is the three bed much larger overall so that increased ground floor space compensates for smaller third bedroom?
If option 3 is lhabitable then you will be able to add value by completing refurbishment when you can afford it.
A straightforward 10% off looks harsh whereas opening discussion at £160-£165k and going up a little in £2k increments ought to secure a sale I think

1: 613 sq/ft. 2: 624 sq/ft. 3: 696 sq/ft. #3 does feel much bigger inside, though the garden is smaller than the other two

Definitely habitable, just needs a new kitchen and bathroom

badmemory

Also consider the size of any garden involved.  Also if you drive parking availability.  It doesn't always leap out at when you are viewing, but when you live there can become a major isssue.  A 3 bedroom could also give the possibilty of a lodger which could help with refurb funds (£7500 tax free income I believe).

Maahes

abc.xyz said:

i've heard being a FTB looking to complete ASAP gives me some extra leverage.

It rarely gives you the advantage you think it might and there have been many posts on these forums advising against choosing FTB. 

Linton

abc.xyz said:

Hi all. Single FTB looking to purchase ASAP. My max budget is £180k, 5% deposit. For context, £165-180k currently seems to get me a modern 2-bed semi or a 3-bed semi in need of renovation. A lot of properties have been on the market for a couple of months or more, some with £5-10k reductions in that time.

I have three options I'm interested in:

1) Modern 2-bed semi
£180k
613 sq/ft
Listed last October for £190k, didn't sell, relisted in June for £180k
Not sure about vendor's position

2) Modern 2-bed semi
£175k
624 sq/ft
On market since July, £5k reduction
Vendor looking to upsize, has offer accepted on a new build

3) Outdated 3-bed semi
£180k
696 sq/ft
On market since July, £5k reduction
EA says vendor has been put into a care home

I know markets and prices differ between city and region, but what would be a reasonable under offer? Is 10% insulting? I've heard being a FTB looking to complete ASAP gives me some extra leverage.

It's been difficult to find comparable sales because the first two are 90s semis on estates with mostly detached houses, so no recent sales to go by. There are some recent sales for similar properties on the same street as the third, but they had much more modern bathrooms, kitchens, carpets, etc

If you like a specific house and feel the asking price is in the right ball-park I suggest you make an offer around 5% lower.  This tells the vendor that you are making a serious offer and are asking for a compromise on price.  The pressure then is on the vendor to make a counter offer below the asking price.

 An initial offer of -10% could signal that you are just trying to squeeze the vendor to get a cheap price. What you want to avoid is an outright refusal which puts you on the back foot for future negotiations (if any).

If you really want that specific house simply offer the asking price.

If you feel the house is 10% overpriced I suggest you look elsewhere or wait until the price us reduced.

ReadySteadyPop

abc.xyz said:

Hi all. Single FTB looking to purchase ASAP. My max budget is £180k, 5% deposit. For context, £165-180k currently seems to get me a modern 2-bed semi or a 3-bed semi in need of renovation. A lot of properties have been on the market for a couple of months or more, some with £5-10k reductions in that time.

I have three options I'm interested in:

1) Modern 2-bed semi
£180k
613 sq/ft
Listed last October for £190k, didn't sell, relisted in June for £180k
Not sure about vendor's position

2) Modern 2-bed semi
£175k
624 sq/ft
On market since July, £5k reduction
Vendor looking to upsize, has offer accepted on a new build

3) Outdated 3-bed semi
£180k
696 sq/ft
On market since July, £5k reduction
EA says vendor has been put into a care home

I know markets and prices differ between city and region, but what would be a reasonable under offer? Is 10% insulting? I've heard being a FTB looking to complete ASAP gives me some extra leverage.

It's been difficult to find comparable sales because the first two are 90s semis on estates with mostly detached houses, so no recent sales to go by. There are some recent sales for similar properties on the same street as the third, but they had much more modern bathrooms, kitchens, carpets, etc

 Looks like you are using one of the apps that track price drops, are you also checking price history, that can be a guide to how much a desperate seller may be prepared to reduce their asking price.

Herzlos

abc.xyz said:

I've heard being a FTB looking to complete ASAP gives me some extra leverage.

It has some advantages; there's no chain and you can presumably be more flexible with dates. As long as you have a morgage agreement in principle then you should be proceedable.

How much under to offer is anyones guess. 10% isn't wild, but you may find that if they aren't in any rush they'll decline especially if they'd already reduced. 

Which one to go for is up to you. 2 will probably get you the cheapest place now as the seller will be keen to get moving into the new build, but 3 if you can live with it in it's current state will probably be the best long term investment, especially with the extra bedroom which is always handy. 

Martico

It might also be worth having an informal chat with the agent(s) marketing the properties, to feel out what kind of wiggle room they feel the vendors might be open to. Some would be open to such a conversation, some would not, but you lose nothing by approaching them to find out

RogerPensionGuy

If all three of them suit you, why not make an offer on all of them. 

Looks like these houses aren't in any bidding wars and asking prices being reduced so why not put in lower offers that suit you, 5% 10% 15% or 20%. 

You can always put in an offer and if not accepted, that's okay, you can tell them the offer remains good until you go forwards on a purchase, this allows the seller to have a potential backstop if they choose to take the offer. 

The housing market has slowed down a lot as many potential sellers feel they want to sell houses for more than buyers willing to give, its often like this in a slow or reducing market, we have enjoyed super low interest rate for many many years and them times have now passed. 

Don't be embarrassed to make offers, sellers were asking over the real price value of the houses and are now dropping anyway. 

Look on Zoopler at houses and similar houses in them areas, Zoopler has a nice data on said house prices showing price movement, normally down, however some houses get removed from sake, then a few months later gets put back on with a lower price and lose the price historic data.