Low offer... thoughts?

[LikeASoulWithoutAMind]

We've had our house on the market for several months and have just been made a pretty low offer (10% under asking, which at this price is quite a lot of money!).

Trying not to out myself, but it's a lovely period house, 4/5 beds, loads of lovely features. Our location is considered very desirable, it's on a fantastic road and houses like this don't come up very often - there are lots of small cottages and then far fewer bigger properties. Schools very well regarded.

The bathrooms are tired but otherwise the house is presented in very good decorative order. Roof, boiler, wiring, plumbing not new but have all been checked and are fine with plenty of life left in them.

In our area at the moment though, the lower end of the market is moving OK, the upper end is very slow. Nothing in our bracket is selling. There just don't seem to be many families looking (or not at houses as big as ours anyway) We look competitively priced compared to other similar houses on rightmove.

Now we've had this low offer and I think they are just chancing their arm and hoping we'll panic. I know of other smaller houses that have gone for a similar (or slightly higher!) amount. We do have the option of renting for 6 months (we have someone ready to sign a rental agreement) and put back on the market in the Spring. We've already moved and are renting somewhere we're happy to live in for a while so there are no issues on that side.

The estate agent is obviously keen to conclude a deal, as they know we will otherwise take it off the market and rent it. That's clearly the best outcome for them but not necessarily for us!

I can't work out whether we'd be better off renting it out for now and trying again in Spring or whether this is all we are realistically going to get The rental income would be quite good but there is of course the hassle of managing that from a distance.

Aargh... where's my crystal ball when I need it?

[SilentAllTheseYears]

I'd wait until the spring, or let them have the house at that price but take everything - curtains, carpets, appliances, the works.

[mrsfarquhar]

Its probably not that there aren't many families looking, houses sell at the price people are willing to pay. The prices are falling, albeit slowly and the heat from earlier in the year has totally gone. We have sold our house and are looking to buy because we say we can't find anything to buy. However there are houses for sale, its just that a lot of the houses still on the market do seem a bit steep now that we aren't worried prices are going to keep going up, so we're waiting to see if anything we like more than these comes on the market.

There are always people looking but its whether they feel the impetus to bite.

[mrsfarquhar]

I hate to say it but the longer your house is on the market the more likely you are to get cheeky offers. Buyers assume its overpriced or there may be a problem.

Although that probably depends where you are. We are London so the market tends to be faster moving, if you are in an area where houses generally take longer to sell it may be less of an issue.

[raydown]

A house is only worth what someone is willing to pay for it. I guess the people making the offer know it's been on the market a while with no other offers. If this is their first offer I'd be tempted to hold your nerve, reject it and see if they come back with something higher. If all depends on how quickly you need to sell. Renting a house out isn't cheap and it isn't a hassle free option.

[SolomanDaisy]

Is that their first offer? Have you tried going back to them with a counter offer?

[LikeASoulWithoutAMind]

Thanks for your replies - it's really helpful to get outside views. The estate agent has told them they need to get nearer to asking price so we'll see what they say today. I've given her a figure to quote which is what we'd like (bit higher than the lowest figure we'd accept)

mrsfarquhar that's true - market isn't like London here though - so it's not great but it's not bad either.

[wowfudge]

Without knowing the numbers or the area and the sold prices there, it's difficult to say whether it's a fair offer.

Have you had an other offers at all? Sounds as though you haven't. You must surely know what you need to get in order to pay off the mortgage on the house and provide sufficient deposit on the next one you buy, assuming you have a mortgage. If you own it outright then that changes things - you are paying rent elsewhere and don't say you have the mortgage to cover on the house you are selling; usually a big driver to sell!

Do you know why the offer has been pitched 10% below the asking price? My thoughts are that if you really want to sell you will negotiate and find a price you can accept. If you don't need the asking price in order to afford the next place you buy, then it's a vanity thing really: no offers = asking price too high, unless you've had lots of viewings, but no offers which suggests those people viewing think it doesn't match the price by quite some way because there is something about it which needs money spending on it to put right.

In an nutshell, it's worth what someone will pay for it.

[mrsfarquhar]

Good luck. We are about to make a cheeky offer. A last ditch attempt before renting. Its about 5% off asking though (although house has been massively reduced since first going on the market at an outrageous price!). It feels cheeky because you're right 5-10% at higher prices sound like a lot of actual cash.

[specialsubject]

it's worth what people will pay.

BTW taking carpets and curtains is generally a waste of everyone's time and effort, especially if you don't know where you are going. How do you know anything will fit?

story: we took fridge and freezer, left the rest. Stored them for six months while we were in rental. House we bought had them included...

[Choccywoccydodah]

10% is a lot, but now you're at the wrong end if the year, people will take the mick.
Personally if you can afford it and houses aren't moving, I would be tempted to take 7.5% off just to get it gone. You sometimes have to cut your losses.

If you rent it, who is to say that the house won't sit empty while you are selling it next year after the tenant has loved on. If that's the case you've got to factor in that every mortgage payment you make (minimum of 2 really) is dead money. If your mortgage is £800 per month say, you could afford to drop it the £1600 plus whatever you're willing to drop it now iyswim? That's if you sell it right away next year and it doesn't sit empty for 6 months. Again if it IS empty, people will take the kick anyway as they'll think your desperate to sell.

Plus who's to say the tenant will look after it as well as you.
You could sell it while the tenant is in, but maybe the tenant won't be keen to move and try and jeopardise the sale. You usually have to give the tenant a discount too if they are living there while you are selling (not law, but a goodwill gesture).
Will their furniture look as good as yours does now? Ie will the house be at it's best?
Will you have to redecorate once they've moved etc etc?

Chances are if you wait til spring you'll have a lot more competition. There will be more properties on the market therefore more for buyers to choose from.

We've moved a lot in the last 15 years (we do up properties while living in them, or buy repos to sell on), so you have to factor everything in.

[LikeASoulWithoutAMind]

I know choccy lots to consider.

The tenant is a friend of mine (having some work done on her own house) and part of her approach to me was that she would be happy to do viewings. She was in a similar situation herself two years ago, so is very sympathetic. You're right though, the house won't look as fresh after a tenant has been in and it won't be presented as nicely either.

[enriquetheringbearinglizard]

Hard to say without the specifics.
It all depends on how good your agent is and if they can negotiate upwards.
Then factor in the difference in commission, the associated costs of rental and any refurbishment work needed at the end of a rental before you can remarket the property, the hassle of being a landlord and the fact that you've had no other offers.

Despite the fact that you say it's in good decorative order it may, possibly, not be to other people's taste and refitting bathrooms does not come cheap.
What would someone have to spend to bring the house up to scratch and what do you think it would be 'worth' then?

It's disappointing not to be offered near the asking price but I think what I would do is set out on paper how I'd feel if I were the prospective purchaser and then make my decision based on what seems fair.
It's no good hanging on to a pipe dream of an asking price if no one with the cash to spend is going to part with it.

[Rockdoctor]

I don't think 10% below is too bad - as a starting point for a negotiation. Personally, I would probably accept 10% below asking at the moment, I'd certainly consider it - but I'd make it clear that I wasn't going to accept any further reductions post survey or at the last minute.

You don't say where you are but it sounds very similar to where I am. The market has slowed considerably. Houses at the mid to top end - generally snapped up by people moving out of London - aren't even getting viewings. It depends how keen you are to move. Things may pick up in the New Year... but then again they may not.

[Rojak]

I just put in a cheeky offer of about 10% under for a house that has been on the market for a long time.

It's a well kept house but I put in a lower offer because I'm factoring in the cost of a new kitchen and bathroom. I probably don't need to do the work immediately but I would in the long run because although the house is very well kept, the kitchen is dated by today's standards.

I'm still waiting to hear though from the owners.

[IssyStark]

In a properly functioning market, selling at 5-10% below the asking price is normal. Historically that is what happened in the UK. When we first bought in 2005, the advice then was still that offers between 5-10% are normal and are usually accepted.

I really don't understand why you think thi is a low offer. I was expecting you to say they had offered 15-20% below the asking price. 10% is not cheeky, it is, or at least was, standard.

If it is really too low for you to move, then counter with 5% under asking price and settle at 7.5% under (or whatever the differnce is you need). But if you do this, be prepared for the buyer to walk away. As others have said, a house is only worth what someone else is prepared to pay for it.

[Choccywoccydodah]

Sorry issy I totally disagree.
If I had a house on the market for 500k and someone offered me 450k I would be totally and utterly insulted and pissed off.
The area we live in (midlands) you would be lucky to get 2-3k off whether the house was 100k or 1m.
We've just sold a house we renovated, lived in then rented out as needed to move back, in a bad market area of wales and we only got knocked down 3% and then we were not best pleased but needed it gone ASAP and it was coming up to the end of summer and on the market for 6 weeks before the offer (tenants cost us 5 viewings in the first 2 weeks so waited for them to move out).
The house we currently live in we only got just under 1% off, and even then they were battling til the end!

[Callmegeoff]

My current house was on the market for 4 years before we bought it, it kept disappearing whilst rented out then reappearing. It had had offers but the estate agent would never tell me what they were. I suspect in the end we paid less than the offers which were turned down.

It was originally on for £450, we paid £370 and the surveyor valued it at £350.

It's a tough call Op, but if you can afford to wait I'd be inclined to see what happens in the spring. In my situation the vendor had taken a bridging loan on another property never dreaming it would take so long to sell.

[MirandaGoshawk]

We've recently accepted 10% off our asking price because we were told by agent that this is normal at the moment. In your situation I'd accept, just to be able to make a new start.

[MirandaGoshawk]

This is in the West Country, btw.

I get the impression that our local agent massively over-values houses, so we feel we've sold for a fair price. It also depends on what you're buying - if they come down by the same amount then it's all good!

[Chapeausalesman]

Exactly miranda. We are prepared to accept an offer below asking (about 30k, so a lot of money even if only about 5% under, because we are putting in a comparable offer on our purchase. The market has really slowed here- Greater London-and offers are thin on the ground, so we have to be flexible. I don't think our agent over valued the house, virtually identical houses sold for more a few months ago, but there has been a big change. That said, the offer we got of 100k under asking REALLY pissed me off....

[SnowBells]

I don't understand this. Higher-end houses often sell at lower than asking price because there are less people who can afford them.

Regarding "good decorative order" - we don't have pictures - but beauty is in the eye of the beholder. We've seen plenty of properties. Some had new-ish kitchens that were ghastly. We would have had to do them up again. The owner might have thought they were perfectly fine.

If you look at the cost of new kitchen, bathrooms... and the bother of having to deal with it al... that can easily be quantified as 30-50k for example.

Some people I know rejected offers earlier in the year. They now accepted offers even lower than the ones rejected. This was in London.

[LikeASoulWithoutAMind]

Thanks for all your thoughts. I guess we just felt the price was pretty low to start with (we have already reduced the price) and already took into account the need to replace the bathroom - similar properties are on the market at 50k more. It will totally out me if I post a link so you'll have to take my word for it that the house is otherwise in good nick - vast majority has been repainted (much of it professionally) this year - neutral colours.

Let's see what the estate agent can do. She seems to think there is room for movement. I'm not expecting full asking but a bit nearer would be good.

We've moved to a more expensive area of the country (for work, not on a whim) so we can't really afford to write off tens of thousands just like that.

[Blackeyez09]

Oh dear I secured at 1-2% under asking price... I'm in the midlands too
However... What I think is that more expensive houses are slower to sell especially in an area like the midlands as less people can afford them..

My house was cheap (even though it's a massive 3 bed victorian) and so there are always going to be more people who can afford it hence more competition

[Lambstales]

Is there a chain? Or are they cash buyers?
If the buyers are able to proceed, I would snap their arm off!

There is an election next year........... so the coming spring won't be a better time to sell.