Offering on a house

[Housebuying]

Posting for traffic!

Just wondering when buying a house (not London!) what sort of offer should you make? What % of the full asking price should you expect to pay, and whereabouts should a first offer be?

House has been on the market just over a month, and needs work (full rewire, new boiler). Would appreciate any advice!

WIBU to offer 85% of the asking price?

I think my instinct is to offer £350k and then walk away if it’s a no

Go with that then.

A house is only ever worth what someone is prepared to pay.

@HillRunner working backwards, out maximum purchase price is £360k. So for the reasons stated above, I think my instinct is to offer £350k and walk away if they say no.

Why is that a bizarre game?

I guessed the house was worth £380k, but considering someone offered £340k, maybe it’s not worth £380k. Who knows

People often forget that a house is only worth what someone will pay for it. Agents often say to sellers, price at X with a view of getting Y offer. But some sellers only focus on the amount it is to be marketed at.

In your shoes I would offer £347k. If they refuse ask the agent for their thinking, tell the agent the amount of work the house needs in order to be suitable for you. Then leave it for a day or even 2 then make a second offer. Re-iterate to the agent your fantastic position (not in a change etc.) and leave it with them.

Good luck!

I would call back and offer 350. No point offering 340 if they already turned that down only a month ago.

No point offering 340 if they already turned that down only a month ago.

Not necessarily.

A lot can change in a month.

What is the market like where you are? What is the vendors' position - do they have a house they want to buy quickly? Both of these will make a big difference.

If the market is quiet, I'd offer £345k if I was you. Have to say you dont come across as being that keen on the house anyway, so what to do if that is turned down depends on how much you want it.

@Raymond I am keen on the house, but I’ll never be so keen on a house that I’m not ok to walk away. I really believe there will always be other houses. I’d love to live there, and I’d be happy (and nervous) to take on all the work. But I won’t overpay.

To answer your questions, the market seems quite slow. The vendors have found a house that they want to buy, but are not in a chain. Neither are we, as we don’t have to sell.

Why have you reduced your price to 350? Based simply on the fact someone else try to low ball them? That makes no sense.

And why would you be living a year in a building site? I thought it was a kitchen extension?

If the estate agent isn’t to be believed, and they are holding out for an asking price that’s too high, we will need to walk away

Small tip: agents are almost never to be believed; that's why they have the bit in the listing about the details forming no part of a contract

Since you said the average price on the street's about £360k and this one's smaller than some and needs work, there's no way I'd pay that £360k for it - assuming your project will bring it up to a value of £400k is a hell of a gamble in today's market, and if it's been a bit neglected there's no knowing what else you might find once you'd bought it

Unless you've got to b uy right now, I'd walk away and wait for something else in the area

"I wouldn’t acknowledge 330k and you would piss me off to the point I wouldn’t entertain any further negotiations."

1000% this. I'm in Scotland where the system is different. I sold my property last year, it went on the market for £10k under the valuation and ended up selling within a week with multiple offers for considerably over the asking price.

Obviously I could afford to tell any piss takers to take a hike though, not looking at you, OP the market may have since stagnated in OP's area.

I agree that houses are priced at what they’re worth without the work done, but from what we’ve seen the house is still priced too high

So leave it alone. Find another house. ¯\(ツ)/¯

Why have you reduced your price to 350? Based simply on the fact someone else try to low ball them? That makes no sense.

Of course it does.

Another buyer thinks the house isn’t worth the asking price.

The seller isn’t exactly swamped with offers.

Both if these will effect the OP’s decision making.

The OPs job is to get as good a price as she can, not make the vendors life easy.

I agree that a lot can change in a month and if they get two offers around the 340k mark then they may reassess what they had been determined to hold out for.

Nothing to lose, especially as OP willing to walk away. She is not so terrified of losing this house that she would avoid causing offence!

but considering someone offered £340k, maybe it’s not worth £380k.

They were probably just playing the same game you are? Why would the fact that someone else offers lower make the house worth less than you think when you offered even lower than the first person?
Maybe they have a budget of 340 and took their chances. People do that. You’re doing the very same because your budget is 350-360 but you’re viewing houses on for more than that.

In our current house we offered about 98.5% which was accepted. When we went in to make the offer we found out they’d already refused a 97% offer a few days before. Someone else was on a second visit and thinking of offering. It had been on the market for about 2-3 weeks. We made the judgement that it would almost certainly go within a month or two for asking so offered a small discount as we were chain free.

If house is on for £410k it will have been valued by an EA for this value. A new boiler and rewiring will cost less than £10k together. If you offer less than £390 the vendors will not take you seriously. £330 is ridiculously low and why would the vendor accept even the £360k you say you would be happy to pay if their house has been valued at £410?

If house is on for £410k it will have been valued by an EA for this value.

A house is only worth what someone is willing to pay for it.

If house is on for £410k it will have been valued by an EA for this value.

We had valuations from 6 different estate agents

No 1 (YOPA) said £180-190k
No 2 National firm said £200k
No 3 Local firm we are buying from said £210k
No 4 Local firm that does a lot in an adjoining area said £220-240k
No 5 VEry large local firm said £210-220
Firm we have gone with said £210-215 quick sale £220 longer term

So there is a lot of difference

Also, I’ve said a few times that the house is on for £390k, not £410k. Our budget is about £430k, and we’ve seen a lot. We’ve seen enough to know that the house isn’t worth £390k.

We were interested in the idea of a project. You never know what things are worth, but if the vendor has only had one offer of £340k, and we independently thought around £350-£360k is what we’d be ok paying, doesn’t that imply the house isn’t worth £390k?

I covet a house just on market near to me that is on for £875k. It is above our budget. We could scrape together £350k deposit by selling our house and repaying remaining mortgage but new house still too high for new mortgage. We could sell some of our buy to let which bring in income for us and this would raise another £170k we could add to deposit but then have less income for multiples. We know current owners have sold off a lot of the land that was with house to builders who have built new houses. My dh and I have been discussing whether £800k would be an insulting offer and we would have to sell 4 houses. For that reason I think it is too low an offer but dh says that is what he wants to offer because there is a lot less land. We have looked and they bought house with lots of land in 2012 for £575. DH thinks they have been well rewarded for land sale. I am hoping house will be reduced after first month as that sometimes happens if vendors have received no offers in first month.

OP, a house is only worth what someone is prepared to pay for it, there's no magic equation to do.

I moved this year, I really wanted the house, and it was sold to best and final offers. I offered over the asking price (as did 4 others btw) and got the house.

@caringcarer maybe there’s no right answer. I’d feel like offering £800k would be fine, and end up paying £830-£835k ish. I think I’d rather someone thought I was a bit rude, than I offered a price and the vendor accepted it. I’d kick myself and always feel I’d overpaid

Someone posted this yesterday on a zombie thread in Property and DIY ...

You'll be always unsatisfied with the price, always thinking you could've offered less if you get the house, or more if you lose the house.

OP, you need to be realistic about your local market (prices and speed of sales), about the likely value of this house in its current state (which you estimate at £380k) and decide what it is worth to you. Make an offer based on what it is worth to you. Be happy if it’s accepted, and if it isn’t, accept that it wasn’t the house for you and move on.

It does sound as if this house is realistically priced, and the flexibility might be to go down to £380k. What you’re proposing is, tbh, a pisstake.

Them turning down a previous offer of £340K doesn't mean they are trying to play hardball. They may need to reach a certain point in order to be able to afford their onward purchase.

Someone else's lowball offer is irrelevant - all it means is that they decided to try a cheeky offer and it went nowhere. I am all for negotiating to get the best deal but you need to be reasonable, because there is a huge amount of trust involved in purchasing. All sorts of things can go wrong and you have zero protection until you have exchanged contracts - so a lot of things ride on co-operation and goodwill. It's not a great idea to kick things off by making the vendor feel that they've been screwed to the wall on price!

As PP have said, you can't factor in your extension costs unless their place is wildly overpriced. If you really want the house then talk to their EA and explain you are concerned that the price doesn't reflect the work that will need to be done and size of the property. Ask them what the vendors' realistic sale price is as you don't want a protracted negotiation. If the EA is halfway decent then they will guide the vendor (as best they can) because they will want it to go through to get their commission!

So to simplify, the general consensus is that IABU to offer £350k on a £390k house?

And the previous offer from someone else of £340k was also U? But the vendors holding out for £390k when they’ve had not much interest in their house, is the correct way for them to handle a house sale?

Clearly this is not an issue that is black and white because there have been differing views from PPs. Genuinely appreciate the replies, because it’s been helpful.

So to simplify, the general consensus is that IABU to offer £350k on a £390k house? And the previous offer from someone else of £340k was also U? But the vendors holding out for £390k when they’ve had not much interest in their house, is the correct way for them to handle a house sale?

Yes and no. It's not as straightforward as that. There will be times where a lowball offer is fair, but the reasoning behind that needs to be sound. Lowballing someone because they've priced their house in line with the street but they've got one less bedroom and bathroom and a single rather than double drive, is reasonable. Lowballing someone because you want to put an extension on, is not.

The vendor may or may not be unreasonable to accept or decline. At the end of the day you pay the price you feel comfortable with, and if you can't reach agreement then walk away and find something else.