Placing a Low Offer on a House

Leeds_Fella

Chaps,We are in rented (sold up a few months ago) and have seen a lovely house.It was up for £550,000 and has been on the market pre-hips. It is now on for £525,000

We are thinking of placing an offer for £475,000 - do you think in the current market conditions, it will be laughed at or is it realistic?.

The current owners are now in America and are not in an upward chain

pinkshoes

Well you might as well try, as the worst they can say is no (and at the same time someone offers say £500k which is accepted, although not likely if it's been on pre-hips era).

It's a good starting point, but work out a maximum that you're prepared to negotiate up to, and don't go above that amount.

Perhaps they have no mortgage on it, so it's not really costing them much to keep it on the market, hence it's been on SO long.

merlinthehappypig

Realistically, no-one is going to be prepared to pay over £500000 for a house on at £525000 because of the stamp duty threshhold so that's £25000 off straightaway.

We are in a similar position, on a similarly priced house.

My view is that the original price is neither here nor there and not worth consideration. If it had been the right price in the first place the house would have sold. The one we are interested in was originally on at £575000 and is now £525000.

As far as we are concerned we are negotiating on a house priced at £525000 - I don't care what it was on at some months back.

We are likely to be making an offer of £475000-£480000. If you are in a position to proceed, as we are, then it's a perfectly realistic offer in the current climate. Offer any more and there is little room to negotiate.

lynzpower

I know Merlin the happy pig will have sme interesting anecdotes about prices they have seen in this sort of bracket.

Personally, I would go in a bit lower. Its been on the market PRE HIPS. Im guessing that its got 4 beds? So its been on since before September? We ar ein Feb now, and thats 6 months. In those 6 months, the climate has changed hugely. Repos up, mortgage costs up, fule costs up N, rock, international credit squeeze, very murky waters, and a reduction in buyers.

Just for fun Id say 477, and you could take it up from there if you wanted to?

dweeby

Leeds_Fella wrote: »

We are thinking of placing an offer for £475,000 - do you think in the current market conditions, it will be laughed at or is it realistic?.

The current owners are now in America and are not in an upward chain

Any house is only worth what someone will pay, so go for it - possibly offer less...

A house near us was up for sale, and the owners moved abroad before they could sell it. After a couple of months, they took -15% from someone who got a bargain.

Also, if you put an offer in, then at least you'll be updated if more offers come in (at least that's the way it works here!).

It al depends on how much you want it, we've just had to offer more than the asking price to secure the house we want! in this market... but we wanted the house.

merlinthehappypig

The problem is that you can't generalise about what to offer. I know I've said this before, but it does depend on so many factors, seller's position, time on market, asking price, how much you like the house and so on.

I'm not sure about interesting anecdotes as personally I'm fed up to the back teeth with the whole house thing, but, at the risk of repeating myself:

Everything we have tried to negotiate a price on has four or more beds and has been on pre-HIPS.

Where sellers are having to sell, for whatever reason, we've seen:

£649500 to £515000;
£649500 to offers around £499950;
£540000 to £430000
£499950 to £415000;
£575000 to £525000; and so on

Where sellers don't have to sell:

£560000 to £550000;
£450000 to £450000;
£495000 to £475000 (though purchased for £482000 in Mar 07);
£450000 to £420000; and so on.

So a marked difference depending on the seller's circumstances. In most cases the smaller reductions are also accompanied by a reluctance to move within a reasonable timescale.

We've concluded, from viewing in excess of 50 houses now, that anything on pre-HIPS is either seriously overpriced or the sellers don't really want to move. If it wasn't the case they would have sold.

One of the biggest problems we are finding is with houses that have 'sold' previously and fallen through (and there are plenty). These sellers are incapable of adjusting to the new climate and have mentally spent the proceeds, so refuse to acknowledge that their house is worth less.

To be honest I suspect that the best bargains at present (if any house currently for sale can be construed as such) are the recent instructions where sellers have to sell. These should be more realistically priced and the sellers more aware that they will need to reduce.

Frankly, many houses still for sale from pre-HIPS times are not even worth the bother of viewing.

Another problem is that whilst there are indeed very few buyers, there are very few houses for sale compared with recent years. If the supply picks up, as it traditionally does in the spring, that should start sellers competing a little more, which ought to send prices down.

Having said all that we are going to make an offer on the £525000 pre-HIPS house tomorrow. If our usual luck holds true they will want £600000 and to move out in 2010. I'll let you know!

tux130582

I agree totally with merlin, notice similar differences on houses of smaller values, someone that wanted to sell sold there house 230k to 215k someone pre hip (happens to be the house we want!) is asking 230k aswell but wont even accept 220k!

nightmare, hopefully the best thing will come to those who wait!

Nenen

merlinthehappypig wrote: »

I'm not sure about interesting anecdotes as personally I'm fed up to the back teeth with the whole house thing...

SNAP! Merlin I really feel for you and wish you all the luck in the world tomorrow.

Those of you who have read posts by Merlin or I on other threads will probably know we have been house hunting a similar length of time and share many experiences (just not in the same location or price range). Like Merlin and his dw, our experience has been that much, if not all, is dependent upon the position of the vendor and how desperate they are to sell. We've seen the following:

1) ex-LA house on market (property developer) 6+ months for £275,000, he refuses to consider offers less than asking price and is looking at 'offers in excess of';
2) house on market for 7+ months at £295,000 reduced to £288,500 a few weeks ago and still not selling (no big suprise there with such a tiny reduction that doesn't even impact upon Rightmove price brackets or stamp duty);
3) new builds reduced from £335,000 to £299,000 (and still overpriced IMHO)
4) house on market for 4+ months at £290,000 vendor won't consider offers

I'm so depressed about house hunting now I'm just about ready to either (a) give up and carry on renting for the rest of my life or (b) offer full price+ on a house I don't really like and doesn't suit our needs in order to stop what feels like banging my head against a brick wall :wall::wall::wall: and a complete waste of time and emotion.

I'm trusting people less and less as time goes on and I'm more and more disillusioned about believing anything anyone says about what they really mean and keeping their word! :mad: I feel as if I have wasted my life, working extremely hard to bring up three children to be valuable members of society and trying to do a job that cares about others (as does my dh) and all we have done is made it almost impossible to buy a decent house for our family!

tux130582

Stick in there Nenen, when it does come off and you grab a bargain it will feel alot nicer!

Im in similar postion to you and was also thinking about offering asking price for houses but im slightly different in the sense that I dont have a family to consider. Im therefore going to wait, at least if the prices arent increasing I can carry on saving until the dream house comes along.

Kez100

That's the way to do it. It was exactly our stance when bagging our bargain in 1994. To be honest, in the end we didn't even look at people selling to move, they just didn't have the ability to negotiate down enough. We ended up looking at repos and houses which had been on the market for ages and ages and had sellers in unusual positions (second homes, inheritances, that sort of thing).

Honestly, we were looking at a completely different level of property for our budget of 75k. Back then to buy from a mover we would have had to offer relatively close to their asking and were looking at properties up to 80k but repos, vacant properties etc we were looking at anything up to 120k. That took us out of the semi-detached banding and into the large detached.

In the end we had two houses we liked. One a repo on at 90k and one a desparate second home owner at 120k (overpriced - survey said 90k) We offered - and it was accepted - 75k on the latter as it had a kitchen (albeit old) and carpets (again albeit old). The repo had the carpets ruined and the kitchen had been ripped out completely.

That was at the bottom of the market and I don't think we are there yet but I would ask the position of each vendor before choosing properties to view as it can give a guideline.