Offering under asking on "offers in excess"

robinsonad86

Hi all, we are first time buyers so no knowledge of "protocol" etc

We are viewing a house which from the pictures we really like, it is at the very top end of our budget. The property has been listed for over 2 months. I don't yet know the vendors reasons for selling or if there is a chain.

I can see that it's last sale was for £100k less than the current price ten years ago. In that time the house has had a considerable size extension carried out to the rear to fit a new kitchen. According to the agent it has had interest, viewings and offers one of which is described as "ongoing" which I am assuming means an offer has been made and left on the table. Just wondering what peoples experiences (positive and negative) are of making offers under the listed price when it is stated as offers over or in excess of 

Isthisforreal99

Some context? What is the overs offer figure and what are you contemplating offering.

That % difference will deem you as serious or a potential time waster (in the eyes of the vendor)

Exodi

The house I live in now was listed as OIEO £325,000 and I purchased it for £290,000 about 6 years ago. There were several extenuating circumstances for the offer though, such as it being involved in a family drama (the house was being sold from underneath the inhabitant - evidenced by the stab marks in the doors and along the walls!) and the seller having no real idea about the status of anything (electrics, boiler, etc). Fortunately for me, despite me making my offer suggesting that it's lower in consideration of potential remedial work that might be needed, the only issue was a leaky toilet!

However, that's not to say you should go running around demanding 10%+ discounts, there is no hard and fast rule and every house is different.

Firstly, is the house priced competitively, are there other similar houses nearby? Are they priced roughly the same/much cheaper/etc.

Secondly, what are the vendors circumstances? A probate sale where the beneficiaries just want their money may  consider a lower offer than someone that needs to achieve the list price to afford their onward purchase or isn't desperate to sell and is happy to wait ad infinitum for the right offer.

Time on the market is certainly a good indicator of whether an offer under list price is reasonable, a house that has just been listed is unlikely to consider such an offer. Two months however is reasonable to do so.

Then there's also the matter of the vendor in general. Some vendors would rather bullheadedly keep their house priced high and unsold forever, feeling that their house is special or worth a lot, than lower the price. We see it fairly often where people ask why their house isn't selling. All houses will sell if the price is right. 

In that sense, there is no hard and fast rule to your question - as much as people like an easy answer like "yes, you should offer 5% under the OIEO price for every month it's been listed" it's not realistic.

Every property, seller and circumstance is different. I presume from the estate agents response they've already had many lowball offers that the vendor hasn't necessarily rejected out of hand, but is holding out hope for a better one.

It also depends on what your offer is, we've seen some absolutely silly low offers in the past that have clearly offended the vendor and instantly ruled them out as an unserious buyer.

It's hard to comment on your point about the past price and the works as we don't know what the selling price is (e.g. £500k to £600k is a very small increase over 10 years including a considerable extension, £100k to £200k might be different, though I still don't think it's unreasonable, extensions aren't cheap!), I wouldn't think about the past price, it's not relevant nor excessive (likely the opposite).

robinsonad86

Offers over 300k before tonights viewing we are looking 270-280 due to a smaller garden (in place of the kitchen) and time on the market

Smalltownhypocrite

A previous sold price from 10 years ago means little to nothing especially if major work has occurred.

You can offer what you like, they don't have to accept it.

As a given do not offer more than 10% under asking, the closer to asking the more likely to be accepted but it depends on interest and the the market. They will sell to the best fit all you can do is throw your hat in the ring.

Something thats been listed for a while (although 2 months isn't that long) is usually for 1 of 2 reasons:

1) The seller is motivated but there is no interest because it was originally overpriced/a lot of work/unmorgagble/unconventional etc... and needs to find the right buyer. They maybe more open to offers.

2) The seller is non motivated and has set an expected price and will not accept a penny less (the 'Ill sell at the right price or stay put' crowd). These people maybe completely deluded and their house may never sell. 

Isthisforreal99

You could try sounding the agent out about a £270k offer before making it.......or have I just been watching too much Phil Spencer

Exodi

robinsonad86 said:

Offers over 300k before tonights viewing we are looking 270-280 due to a smaller garden (in place of the kitchen) and time on the market

I don't think that's an unreasonable offer.

And agree with @Isthisforreal99 I'd consider offering £270k first, and if they refuse or counter, you have some wiggle room to £275k or £280k.

Good luck.

peterhjohnson

Smalltownhypocrite said:

As a given do not offer more than 10% under asking, 

Disagree. Work out the market price based on local recent sold comparables and offer that. Even if it's 20% under. You probably won't get the house and certainly not immediately but you might eventually. No way should you offer and pay 10% less than a stupidly high price!

Albermarle

Isthisforreal99 said:

You could try sounding the agent out about a £270k offer before making it.......or have I just been watching too much Phil Spencer

OP - The agent works for the seller and is not really supposed to tell buyers too much about the details of other offers, or what they think the seller is actually expecting.
However it will do no harm to build up some kind of rapport with the agent ( if possible), and they may well drop some hints that could maybe point you in the right direction.
They of course want to sell the property asap.

ReadySteadyPop

peterhjohnson said:

Smalltownhypocrite said:

As a given do not offer more than 10% under asking, 

Disagree. Work out the market price based on local recent sold comparables and offer that. Even if it's 20% under. You probably won't get the house and certainly not immediately but you might eventually. No way should you offer and pay 10% less than a stupidly high price!

Exactly, mortgage rates were very low in 2015, and they trended even lower in following years, people who borrowed to buy in that period probably overpaid by quite a bit in many cases because the monthly payments looked low.

Chief_of_Staffy

I personally never view properties tagged with 'in excess of'. Life's too short to deal with such people.