How much should we offer?

MrPants11

Hi all, new to this thread and indeed the housing market in general, in need of advice. 

Myself and partner and are both mid forties, in rented accommodation but landlord is selling. We are currently searching for 3 bed properties as we have children at home. We have already had our fingers burnt by offering on a house at £250000 asking price only for it to fall through due to the lenders valuation being below the accepted offer. 

We were maybe a bit naive and are really working to educate ourselves. So is there a rule of thumb for making an offer, what should we be taking into account and what people think the likely difference is in seller valuation and the amount a property is likely to be sold for.

A lot there I know, any and all advice appreciated.

kimwp

Did you do a comparison with similar properties in the neighborhood and adjust for condition and repairs needed, as well as generally what houses prices have done in the time since those houses sold?

IOWJJBTM2025

I dont think there is a rule of thumb. There are many factors for why a person would accept an offer. They will have an estate agent who is well practiced in negotiating and trying to get the most for the house.
The sellers may want a quick sale and if you can offer this it may sway for instance.
Another factor is if houses are selling in the area - some areas have queues of people waiting for houses to come on the market and therefore the chances of accepting a low offer from the first person.
I suppose that there are things that you can do as a buyer to make yourselves attractive to a seller - proving that you can get the mortgage, have no chain etc.

dnpark38

Zoopla web site will give you pricing histories.

Nearlyold

There's no hard and fast rule as to how much a seller may ask/accept for their property. The Right Move site can help a bit as you can check fairly recent sold prices for similiar properties to the one you're interested in. 

theartfullodger

No more than it's worth to YOU.  Others will offer other prices 

Albermarle

Every transaction is different but I think Right Move ( or someone similar) monitors the trend in purchase prices vs asking prices. Typically it is around 3 or 4 % I think, but this is just an average.
Normally I think if a property is new to market and is generating a lot of interest, the discount maybe be non existent. Similarly if the asking price has been dropped significantly recently, there will probably be resistance to further discounts.
However if the property has been on the market a few weeks, then I think most people would make an initial offer of at least 5% below the asking price.
Although as already said it depends on other points as well.

michael1234

IOWJJBTM2025 said:

I dont think there is a rule of thumb. There are many factors for why a person would accept an offer. They will have an estate agent who is well practiced in negotiating and trying to get the most for the house.
The sellers may want a quick sale and if you can offer this it may sway for instance.
Another factor is if houses are selling in the area - some areas have queues of people waiting for houses to come on the market and therefore the chances of accepting a low offer from the first person.
I suppose that there are things that you can do as a buyer to make yourselves attractive to a seller - proving that you can get the mortgage, have no chain etc.

I would agree with your answer to the OP's question - there are no rules here.

However, when it comes to EA's motivation, I think it is a common misconception that EA's want to sell at the highest possible price. I mean yes most are on percentage commission so will earn more the higher the property sells for but in reality they just want to sell and sell as quickly as possible. 1% of say 750K is virtually the same as 1% of 725K. Therefore their job is to gently persuade the seller to reduce (after their own ludicrous valuation was agreed in order to sign the seller up to the EA) and get the buyer to offer at least as much as the EA thinks the seller will accept.

Ms_Chocaholic

Can you buy the property that you're currently living in if the landlord is selling and you like it.

MrPants11

Ms_Chocaholic said:

Can you buy the property that you're currently living in if the landlord is selling and you like it.

It needs too much work to get it up to standard, we have put up with it because rent is way below market value.

MrPants11

michael1234 said:

IOWJJBTM2025 said:

I dont think there is a rule of thumb. There are many factors for why a person would accept an offer. They will have an estate agent who is well practiced in negotiating and trying to get the most for the house.
The sellers may want a quick sale and if you can offer this it may sway for instance.
Another factor is if houses are selling in the area - some areas have queues of people waiting for houses to come on the market and therefore the chances of accepting a low offer from the first person.
I suppose that there are things that you can do as a buyer to make yourselves attractive to a seller - proving that you can get the mortgage, have no chain etc.

I would agree with your answer to the OP's question - there are no rules here.

However, when it comes to EA's motivation, I think it is a common misconception that EA's want to sell at the highest possible price. I mean yes most are on percentage commission so will earn more the higher the property sells for but in reality they just want to sell and sell as quickly as possible. 1% of say 750K is virtually the same as 1% of 725K. Therefore their job is to gently persuade the seller to reduce (after their own ludicrous valuation was agreed in order to sign the seller up to the EA) and get the buyer to offer at least as much as the EA thinks the seller will accept.

Thanks for the comment, is it safe to assume that Estate Agents do inflate values and vendors are aware that properties won’t necessarily make the asking price? This particular property was reduced in September. With the amount of properties on the market and the amount that are being reduced our thinking is that it’s a buyers market and we should be able get value. We are in no great rush either, we can weigh up all options available, we just want to make a good decision.