Would you offer 20% less than asking price?

[thetigerwhocametoteax]

Never posted in here before but we are in the process of moving and its all a bit stressful. We accepted an offer on our house several weeks ago and had the survey done although not heard back from them yet. We took a 10% drop from the asking price, we sold for £5 less than we paid for it in 2006.

We've been looking at some houses locally, we'd really like to buy rather than rent and we've booked a second viewing for a place tomorrow that we like the look of. However at 320k I am sure it is very overpriced. It has been on the market for ages and although the location is lovely the house isn't well presented at all, its very liveable in but def needs work doing to it. I've looked at the land registry prices and similar in that area have sold 2010-2012 for £250-270k. We''ve also been watching similar houses (that we would have loved but weren't in a position to make an offer) and they have all been dropping hugely in price from £300+ to £250 before selling.

I think if we like it we should make a final offer of £250k but DH thinks we should offer more as that is too high a percentage to knock off and it really is the only house we like and he really doesn't want to rent. I also have friends who have been refused a mortage after a survery as they feel the house is overvalued in the present market.

Would you be "insulted" to receive such an offer? I feel we have little to lose. Although the idea of moving into rental with a toddler and I am 37 weeks preg at the moment isn't nice! Also anyone any experience of getting a mortage whilst on Mat leave?

[RCheshire]

I've received offers of 20% below on one flat and one house in the last 18 months. I wasn't insulted (it's a house not my mother!) but did get better offers on both.

I've offered 20% below and been laughed at, and had 20% below accepted (altho we didn't go ahead with that one as we ended up deciding it was still overpriced, and it's not sold!). Most places for sale we currently like are between 15-20% overpriced (based on historic sales data).

I've seen people say "if you're not embarrassed by the offer you're making then it's too high". I think there's some truth in that.

They may well turn you down, and then you can decide whether to (in your mind) overpay because you want the house.

[ogredownstairs]

I'd offer as low as you dare quite frankly. If it's been on for ages they're unlikely to be in a position to be insulted. As RCheshire says, you can always come up a bit if you really want the house.

[greyvix]

Start low- you can always go up if you decide the house is worth it.

[thetigerwhocametoteax]

Think we will go in very low. I find stamp duty a big pain in the arse as soon as we go over 250k then it automatically costs us an extra 5k which is a huge stumbling block. I guess it depends whether she really wants to sell her house or not. I suspect she will turn us down. And if she says yes we have to get a mortgage arranged with me on mat leave. Arrgh - I never want to move again!

[noddyholder]

I have and like RCheshire says have had accepted and also refused. I am looking atm and am seeing lots of re availables where i would definitely offer low or if its been on more than about 7/8 weeks. Give it a go you can always go up!

[Mandy21]

I think it depends - as you can see there are a few people on here who play the property game and are certainly more of an expert than me. I'm probably more emotionally attached to houses.

On that basis, if I was selling a house at £320k (and believed it to be worth around that level) then I'd be insulted by an offer at £250k. I'd just feel like you'd wasted everyone's time. If, at a later stage, you subsequently increased your offer, and I had another offer at a similar level, I'd accept the other offer out of principle. I'd think you were more likely to mess me around and try to get money off at a later stage.

If you don't think you're going to face any competition then go in low.

[RCheshire]

It's a fair assumption that someone who has priced ~20% above similar sold prices does not want to sell/has believed some estate agent sales nonsense. So I wouldn't get your hopes up, but similarly I'd be careful to avoid paying silly money just because someone has decided "My house is worth it"

[RCheshire]

Mandy21, I'm not being critical but I don't understand why you'd feel like that. By the way I'm not in 'the property game' - the two places we sold recently were our homes.

If (as per the original post) you'd priced well above the average (or even record) for the area/type of house then surely you'd expect low offers?

The house I sold was priced very competitively (you had to go back over 10 years to find a house priced lower on that road) so I felt I could dismiss the low offer. The flat I sold I'd recently reduced by 10% when I received the (further) 20% off offer so I waited to see the impact of the reduction. For info,the flat sold for 20% (or 60k) below the 2007 peak for those flats - that's just a seller being realistic about the market.

[Sueqozzie]

IMO from what you've said they are unlikely to accept your low offer anyway. If house has been on the market a long time, seems to be overpriced and not well presented then vendor does not appear to be desperate to sell. The only benefit in putting in a low offer is that you might get some feedback as to how much compromise there is on price.

[alabamawurley]

Any vendor that out of whack with the local market is highly unlikely to accept your offer but hey no harm trying. I wouldn't feel embarrased - you'd actually be doing the EA a favour by providing them ammunition with which to 'realign vendor expectations' .

I would certainly keep the renting option on the table; you say you've been seeing suitable places drop to £250K before selling (so maybe selling for £220-230Kish?) - so if this is the only suitable place on at the moment, you could be paying a £70K (plus interest if mortgaged) premium to avoid going into rented for a while.

[Ketuk]

Mandy- we're offering low on properties that have been hanging around for months, but there's no way we'd mess anyone around later through the process! I don't understand why you'd think that.

[YellowWellies]

Go onto the Land Registry and pay the £3 fee to find out when and for how much the vendor bought the house, then go back to them with a reasoned argument i.e. 'we note you bought the house in 2004 for £250k, given that house prices are now back to 2004 levels according to the Halifax sold index and Land Registry, and that the price you are asking is well above the ceiling price of any sold price in the area, please could you clarify the significant improvements you have no doubt made to the house to justify a price uplift of £70k?'

I bet they splutter like a fecked engine...

[nextphase]

You might not even need to pay land registry. If its been sold since about 2000, Zoopla or Ourpropertyprices will give you the value.

It might also be worth asking the estate agent if there have been offers which have been rejected previously, which might give you a clue as to whether they are looking for something close to asking price.

[RCheshire]

I'd add 'Rightmove' to nextphase's list 'Find Sold Prices' is under the 'For Sale' menu.

I also always ask that question of the agent. If I see a house listed for 600 and on paper feel it's worth more like 500, I'll ask if they've had offers which they've rejected. If the agent comes back and says they've recently rejected 575 then I know I'm wasting my time.

[Mandy21]

I think it comes down to the sellers expections and how sure you are of its value.

Could it be that they've not found anything they want to move to yet so are not in any hurry?

I think there seems to be an expectation that all sellers have put properties on for a) what they want (without any advice from EAs) or b) too much and that buyers know better than vendors what the property is worth. I do think websites with sales data are useful but unless you've been to each and every property you're comparing it to (or have access to all the layouts / internal photographs) and know the position the vendors were in, how can you be sure that you can do a direct comparison?

I've sold twice, both very close to the asking price (96% and 98% of asking price - one of those in 2008 when prices were falling) because I wanted a straightforward transaction and made it clear to the EA that we'd priced at what it was worth (not what we needed or not what we wanted) and would only consider offers at 95% plus (so we didn't want any viewers that wouldn't / couldn't get to that level). If I've gone to the effort of tidying / cleaning / making it presentable for then someone to make me a ridiculous offer, I'd be cheesed off.

I think there is a fine line between negotiating a deal and alienating the sellers by being cheeky in the first place (which in my opinion you would be offering 20% below). Like I say, much as most people seem to disagree, I'd take it personally - I don't think you'd be asking the question if you didn't think that was a possibility. Like I said, I'd think you'd be bargain hunting, trying to reduce the price later / knock money off following survey etc so I'd be very wary of proceding. If I was forced to accept an offer (lack of competition etc) you'd have lost any goodwill and I'd be taking everything with me I was legally allowed !

Sorry, perhaps I'm just a hormonal wreck, but I don't think I'm alone.

[NadiaWadia]

But no-one would be twisting your arm to accept the offer, would they Mandy21? If somebody made you an offer, lower than what you originally wanted, and you freely chose to accept it, then why would they have 'lost any goodwill"? I am sorry but I just find that attitude bizarre and unreasonable, although I understand it is one that a lot of house sellers share.

House prices are stagnating at the moment, you know. YABU.

[NadiaWadia]

I mean, I could understand your feeling a bit miffed, but in the current climate ...

[tawse57]

I just asked an estate agent why an average house in a road in Mumbles is on for 350K asking price when the highest price sold in that road was 275K at the height of the bubble. The next highest price was something like 240K.

So I told them point blank that the asking price was not only ludicrous but that it was downright greedy and said I would not even waste my time putting in an offer.

It is time that greedy EAs and sellers were told that enough is enough.

[RCheshire]

Having sold two places in the last 18 months with baby/toddler I know how much of a hassle tidying up/preparing is, so I understand where Mandy is coming from - I'd have been hacked off if I'd gone to all that effort to receive offers 50% below asking - I guess it depends what you see as in the realm of possibility - as I said I've had an 80% offer accepted.

However, it can also be a pain going to view places! We are viewing ~1hr away from home and negotiating around toddler naps/moods - so if I go to view a house that has taken some effort.

[LaurieFairyCake]

I wish I could get somewhere with an offer of 20% below round here - there are loads of houses on the market at 250k that need modernising but when done up would still only be 'worth' 250k yet the estate agents are still putting them on at 250k.

They won't sell, eventually they all go for rental and they get £1300 a month - unfortunately there's so little to rent that they then find it quite easy and the market entirely stagnates.

here's one, the third nicest area in this town, will defo only be worth 250-280 (so a very tricky price) when done up, previously sold at 85k 12 years ago. Needs at least 50k spending on it as building work/plumbing incredibly expensive to do, if the roof/central heating needs doing add another 25k, if the windows need doing - reckon they were done in the early 90's then add 12k round here

[thetigerwhocametoteax]

Just been for a second viewing - had a better chat with the vendor (went minus screaming toddler this time!) and the house has been on the market for 3 years now and shes only had one other viewing this year. She split with her partner several years ago and it may be one of those where shes been forced to sell as he wants his half of the house and she doesn't really want to sell and so has it overpriced and just sitting on it.

Saying that I got the distinct impression she'd gone to some effort today to tidy around and mow the lawn etc that she hadn't the other day so maybe she is coming round to the idea of selling after all. She seemed pretty switched on and I am sure she knows that she must be overpriced. I think we will go in with the cheeky £250k offer and see what happens. Don't think we can go much over 260k to be honest if we are to leave ourselves some money for updating. And a good friend of mine has had to make a lower offer on a house they had already agreed on offer on after the surveyors informed the mortgage company that the valuation was unrealisitic and wouldn't lend. In some ways it may be better to go on low and realistic and hopefully proceed than have to lower your offer at a later date.

All this may be pie in the sky as she may well not want to sell. Into rental we go I suspect....!

[YellowWellies]

To be honest prices are losing 2k per month, I'm pregnant but seriously considering a move into a rented property when we sell ours. I'd rather not over pay - and for every £1 you borrow, you'll effectively repay £3 over the life of the mortgage. I know every one says that renting is dead money but getting a pointlessly big mortgage is even more dead money in my mind as at least a rental contract only lasts 6 months - a stoopid mortgage can equal 25 years of wasted money and feeling like a tool.