Do people really offer 10% under asking price? Even in London?(29 Posts)
DH and I are preparing to buy our first property. I hear a lot of stories on here about how the housing market is flat and buyers should go in at atleast 10% under. Rightmove says on average homes are going for 92% of asking price
So... Have you really ever offered as much as 10% under asking price? Even in London? Did the estate agent not laugh you out the door or sneer at how poor you must be?
N.B. When I say London I mean a not particularly glamarous area of zone 4 - not Chelsea!
Not always as straightforward as that, but broadly yes. We're expecting to sell at around 10% less than asking price. Mainly due to the fact that we know a similar house on our road is for sale, and we will go for the same asking price but knowing that the other house has had 6 offers in the last month all for 10% less. Equally if we get an offer then we will probably put in an offer of more than 10% below the asking price of the house we're interested in. Now that house prices are published you have a much better idea of what houses actually sell for. Assuming not all houses are identical then you can always "test the market", but low offers are not sneered at, and by law the estate agent has to pass them on. Obviously if you're below what they think they'll be offered then they'll reject the offer, but no point in going in high.
Our house is on the market for 270 and will accept offers of 250. What's that in % terms? Will be offering a similar reduction on any house of ours sells.
My brain is a bit soggy, I've been up most of the night with DD2 (6m).
A bit less than 10%. Like your house, ours is near a stamp duty step (though not the same one). The difference between buying at £249,999 and £250,000 is an extra £5k in stamp duty! Hence you cannot sell a house in the £250-260 range at all - it just doesn't make financial sense.
It depends entirely on how the property is priced. If it's optimistically priced (as many are) then an offer 10% below is fine - I did this last year in London and the estate agent initially sneered at me but came back a couple of months later and said I could have it for that price (but by then I'd lost interest).
If it's keenly priced then you'll need to make an offer much closer to asking price - try 3 to 5% off and see what happens. Do lots of research on your local market and sold prices before offering on anything.
Well we're not London but in a prosperous part of the south west and we paid 20% under about 6 months ago.
However the vendor really really wanted to sell due to a bereavement and we were chain free.
So I think you need to look at a fair few houses to get a good idea of the market where you're looking because bear in mind some vendors do insist their properties go on at over the hightest valuation. Also I found that I got quite good at knowing how certain EAs valued, ie, the high ones and those that priced to sell.
But the key thing really is how much the vendors want to sell - still a lot of properties around where people are not really that bothered about selling unless they get their magical price.
In North London properties are selling for the asking price or over. I just sold my place for above the asking price. So it really depends on the area.
Daydreaming - can I be really nosey and ask where in North London you are?
I live in London and over the 13 years have bought 3 properties paying 98%, 99% and 100% of the asking price. We were always in competition for them. Amazingly, the vendors that got 99% and 100% from us still acted like we were screwing them over and acted appallingly.
My aim is one day to not pay near full asking price and to have nice vendors.
Thinking about it though, I have sold at 90% and 97% and had both buyers thank me for being so nice through the process. Surely Karmic Law says I should be having a good buying experience one day.
We bought and sold in zone 2 in March. We accepted an offer 8% under asking. We put in an offer, and bought a house, at 12% under asking.
Lots of factors - length of time on the market, location and whether it's priced to sell. We've just put an asking price offer on a doer upper as non chain buyers which needs new bathrooms, kitchens, double glazing and all the 60's original decor needs to be ripped out and replaced. It's been on the market for a few days and have already got 2 other offers including a non asking price offer from a cash buyer and cynic that I am, I do believe the spiel since it's definitely priced to sell at a stamp duty band level. Prime location (not London) and few on the road come on the market at the right price imo (having studied the local market closely for the past year). Hoping that there isn't a cash buyer out there willing to pay asking price to trump us. If the price is right, it will sell quickly so bear that in mind - there are a few out there which will achieve asking price.
as stated, it totally depends. check out what the going prices have been for similar properties. now factor in the gloomy economic outlook and likelihood of prices slipping or at the very least stagnating over the next few years. also, how motivated is the seller, and what is it actually worth to you? We bought in zone 3 in August, offered 7% under but after an earlier higher offer had fallen through that unfortunately sort of drew a line on the price. We closed at 5% lower but we didn't play hardball as we might have, since we were desperate to complete before our rental lease ran out.
I saw many properties I would have only considered for at least 10% off asking, and the estate agents were often keen to stress the vendors would actually go for that.
we have been looking at properties in our area. homes that are on the market with an asking price of just under 500k are selling for around 400k...
Rightmove's price comparison report is your friend! Type in the postcode and it shows you a list of homes taken off the market, what their asking price was and what they were sold for (if applicable).
The above sometimes takes a while to update the sold prices but a more up to date list can be found here:
Also, got to say Daydreaming, having quickly scanned a few N London postcodes, it looks like you're situation was the exception rather than the rule.
I'm in quite a crap part of south London and I got 3 offers on my flat within 24 hours of putting it on the market, lowest was 8.5% from asking, accepted around 4% below. Flat round the corner went for asking price, also in 24 hours. HTH
I think there are too many factors to say one way or the other. It depends on:
- The availability of the type of property you're after in the area in question
- The property market in that area at the time
- How optimistic the price was in the first place
- How long it has been on the market
- How keen the seller is to move fast, and how much other interest they've had
- How good your position is (cash buyers? Chain free? etc)
I don't think there are hard and fast rules about what you should offer in % terms. See what other houses on the road sold for. Talk to the estate agents....they sometimes tell the truth! Ask the other estate agents locally who aren't selling it but might know the property. Check how long it has been on the market.
Because of how things are priced in the first place, 88% of the asking price could still be a rip off as the price was so inflated, whereas 95% of the more realistic asking price of a similar property might be pretty reasonable.
We offered 10% below on a property in the South East yesterday. I think we are just about to get around 8% below offer agreed today. Agree that it depends on how realistic the asking price was. This property was priced at 10k above the 2007 selling price (around £300k), and I think we will get it for about £15k (5%) below the 2007 selling price, so certainly not a bargain but seems reasonable based on current selling prices in the area.
I would say if you are going to make a low offer, be prepared to stand firm and give evidence and not let the EA bully you out of it. He initially told us the owner would be offended at our offer, but I told him we were offended by the initial asking price of over 2007 levels! We'd analysed the market to death, could quote sale prices of similar properties and got a valuation from Hometrack (£20) which backed up our figures i.e. make it clear that it is an informed offer and not a cheeky one. Also helps that we have no property to sell and mortgage agreed.
'He initially told us the owner would be offended at our offer, but I told him we were offended by the initial asking price of over 2007 levels!'
I hate this stuff about offers being 'cheeky' or 'rude'. At the end of a day it is a business transaction.
ElderberrySyrup I like your style!
The house DH and I really like came on the market for 229k in August. Vendor then quickly reduced it to 227.5k and took the 'for sale' sign down while he did some minor work on it (but left it on rightmove).
I had a look on Zoopla and compared it to other properties in the vicinity and I honestly feel it's worth about 210k. It's a Victorian terrace so the other properties sold in the same street are likely to be comparable.
The estate agent knows that we like it but we have to wait for some money to come through before we can make an offer. We will be FTB so chain free. While trying to persuade me to move on it, the EA told me he thought the vendor would let it go for 225k - as if this was a great bargain! TBH, it put me off entering negotiations. It has been staged very nicely (chandeliers, feature wall paper etc) but there are some bigger issues which I think we'd need to spend money on as soon as we moved in (e.g. new boiler, new bathroom).
Grrr... if only i was in a position to make an offer today then I could soon find out!
If you have done your homework then make that clear when you make your offer. After all the estate agent knows that so much is in the public domain these days.
Well, if it's been on and off the market, it's obviously not had a lot of interest and the owners might be getting a bit depressed that noone will ever buy it. So if the EA says they will 'let it go for £225k' that means 'they really hope to get £225k' - this should be your upper limit. Start with £200k, say you think that's fair given the market and that you have no chain and you know it'll need work doing to it. This will probably be rejected, talk to your DP and come back with upto £210k, saying you know others in the road have gone for that and it's unlikely that the mortgage company will value this property as being of higher value than the others so they can try to hold out for a higher offer, but what's the point if the buyers can't get a mortgage, and how many cash buyers have they had looking round the property? Oh, and you want XYZ included in the price (curtains, washing machine etc) - then you can haggle over those.
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