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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

To offer less than the asking price?

18 replies

ChameNanging · 07/05/2014 12:01

Bear with me, I'm a total novice.

I'm looking to buy my first home in the next year. Should I offer less than the asking price and if so what percentage should I knock off?

OP posts:

DIYtrainee · 07/05/2014 12:08

Usually yes you would offer less, however you then run the risk of your offer not being accepted, especially if it's a very desirable home.

It will depend on how much you love it, where it is, whether it ticks all the boxes or if you will need to make alternations etc.

Also, if you are chain free which as it is your first home, the fact that you have no chain is a distinct advantage and is actually worth more than money to people.

So a lower offer from a chain free person will often be accepted over a higher offer from someone with a house to sell.

DIYtrainee · 07/05/2014 12:08

AND DON'T TELL THEM YOU'RE A TOTAL NOVICE!!!!

Sorry to shout, but the agents will really try all sorts to sucker you in.

NoArmaniNoPunani · 07/05/2014 12:09

Offer what you think the house is worth

AryaOfHouseSnark · 07/05/2014 12:10

Yes, make an offer. They might say no, but then you can always make another offer. We did.
Not too sure about what sort of percentage to knock off.

Nancy66 · 07/05/2014 12:14

it's expected that buyers will offer under the asking price - and the price is set to allow for that.

however all that goes out of the window if you're talking about London where prices are bonkers and everything in my area seems to be going to sealed bids and selling for about 10% over the already inflated asking price.

MrsKoala · 07/05/2014 12:19

It depends on the way it's worded. When i first started looking yonks ago the norm was an asking price and then people would offer slightly under, you may then negotiate and get a happy medium. So my old flat was on for 140k we offered 130k and they accepted 134k (it had been on for ages and had a low lease so we didn't think it was worth more).

Now however, we are buying again and the area we are looking is going up rapidly. Most places are 'offers over' which means they wont even think about anything below and are expecting more than that. Or the are 'guide price' of 300-345k, which means they are expecting somewhere in that and usually the top end - this is to pull in those who are looking at 300k and they hope you will stretch yourself because you love it so much. In fact most locally go over the guide price at sealed bids.

A lot are also doing an 'open house' viewing where everyone (usually 30-40 people) all views on the same day then have sealed bids. A recent house we liked which was on at 'guide price' of 300-325k went at sealed bids at 365k

It's really depressing.

babybarrister · 07/05/2014 12:42

This reply has been deleted

Message withdrawn at poster's request.

wink1970 · 07/05/2014 14:49

I would add this observation.....

people who are looking to buy up a size and/or are young and/or have children will usually take less of a hit on the price than those looking to downsize.

.....this can help you decide how much to under offer, or to gauge whether your offer is more likely to be accepted.

wink1970 · 07/05/2014 14:51

MrsKoala

yes, round here it's all sealed bids or 'by tender' - and the latter attracts a 2% buyer fee, which can catch you unaware.

bochead · 07/05/2014 14:53

Agree on having proof of funds to hand. Often a seller will accept the offer backed up by proof of funds over anyone offering more but with no concrete proof of their ability to cough up, especially since the mortgage market is peculiar with the introduction of these affordability tests at he moment. I wouldn't even bother to offer without an agreement in principle mortgage offer right now.

As for offering above or below the asking price, I think this depends on where you are in the country. In London you need to offer what they are asking and possibly more, up North and in parts of Wales prices are still falling.

MrsKoala · 07/05/2014 15:11

One house we made an offer on was and 'online auction' which meant the EA's were only doing the viewings and then we had to call up a third party auctioneer to make an offer. Starting bid was £229k but there was also a reserve which was higher. So the auctioneer told us the reserve was 232k and there were no other bids so if we offered that they's probably accept within 21 days if no competing offers came in. THEN they told us that if we were successful we had to pay a non refundable 10% auction fee. Which would have made the property actually 245k for us and that fee would then have to come out of savings because the bank will only give you a mortgage of the cost of the property.

We said no thanks.

zzzzz · 07/05/2014 15:16

This reply has been deleted

Message withdrawn at poster's request.

OnIlkleyMoorBahTwat · 07/05/2014 15:20

Surely it depends how realistic the asking price is?

Some people think that their house is better than everyone else's and is worth more. They might price their house at 200k.

That person's next door neighbour might have a more realistic outlook and price their similar house at 180k.

Also be aware of the stamp duty bands. The stamp duty payable on a purchase price of 251k is A LOT more than the stamp duty payable on a 250k (or 249.99k, not exactly sure) purchase price.

Have a look at the sold prices on www.rightmove.co.uk to see what similar houses in your desired area sold for.

hippo123 · 07/05/2014 16:04

Generally people knock about 10% of the asking price off. However this could could be less or more depending on how long the house has been on the market for and how eager they are to sell. If your a first time buyer, so there no chain, your in a good position to put in a cheeky offer as well. Just make sure you get your mortgage agreed in principal first. The vendor will never accept your first offer, normally you end up slowly negotiating to around the middle figure of your original offer and their asking price. Good luck!

MostWicked · 07/05/2014 17:42

You offer what you think the house is worth and probably start a little lower than the maximum that you are willing to pay for it.
If you offer too low, the sellers have ever right to accept it, but continue to show it in the hope of getting a better offer. You could pay for a survey then still have your offer rejected in favour of a better price.
If you have a mortgage in place (subject to survey), then as a first time buyer, your offer is better than from someone in a chain.

parentalunit · 07/05/2014 19:07

Hell YES offer what you think the home is worth. Base this on the market value, ie what similar homes in similar neighbourhoods have ACTUALLY SOLD for, NOT what their asking price is. There can be a big difference (asking price almost always more than actual selling price). Make sure you can afford what you offer.

There are things you can do to make your offer attractive, such as getting pre-approved for the mortgage, offering to close within x days (line up the inspection within the week, have reputable (quick and responsive) lawyers ready to go, and as much as possible the mortgage and legal paperwork done beforehand, e.g. notarized passports, copies of bills, etc). Your estate agent should be able to help you with your offer, and will probably recommend a specific solicitor.

A seller might prefer an offer which is clearly serious and organized, to someone offering a little more - even if not, if the higher offer falls through, you might be in.

Good luck!

wowfudge · 07/05/2014 19:29

Hmm - knocking 10% off the asking price as 'the norm' was something I first heard from a FTB a couple of years ago. I don't think that is really the case though - it would be ridiculous to have set the asking price to counter that in the knowledge no one is going to want to pay that IYSWIM.

Get your mortgage offer in principle, find somewhere you like and can afford and then think about what to offer as that could depend on many things. For example, you may think your preferred house is over priced compared to other similar properties in the area, or it needs work so you want to pay less so you can afford the work, or it could be a steal and you won't want to let anyone else get it and offer the asking price or perhaps more! You need to look at sold prices in the area too.

Knocking off an arbitrary 10% could just backfire IMO.

Joysmum · 07/05/2014 19:59

It depends.

If you are a first time buyer with mortgage ready to go and no chain then you're at less risk of pulling out than a buyer in a chain and that's worth money to people so be sure to let the estate agent you're well aware of this and your lower offer is partially based on the fact

However, lower offers depend on the market. Round here, lower offers mean that somebody with an asking price or above offer will come in and be successful so you run the risk of losing out.

Flip