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?

But you didn't offer £350k, you offered £330k. You'd have been entirely reasonable making an initial offer of £350k

Sorry, meant to add -

Lots of people fall into the trap of thinking that an extension will add value. But they overlook the fact that every single property will have a ceiling price regardless of how well decorated and lovely it is. Which is why you should always check out the actual sold values of properties round you, before you commit to spending tens of thousands on extending.

You don’t have to give any justification for an offer though.

£800 offer for a house on for £875 is the equivalent to £350 for one on at £390.

In @caringcarer case I would be having frank discussions with the EA saying you have looked into selling your portfolio of houses, your house and mortgaging to the max and the top end of your affordability would be £800, no offers etc. See what they say. There is more room to manoeuvre in the higher budgets especially if the land doesn't come with the house anymore and more houses been built in the area.
Although I wouldn't personally sell my means of income and security and max myself out to buy such a house especially in there uncertain times. Is there not a likelihood of higher interest rates and a fall in house prices?

I agree with ContraversialFerret.

Basically you need to know your local market, and what your own limits are, while also understanding that the seller’s limits may be different.

This summer I bought a one bed flat. It had been on the market for 2 years, and was originally priced at £50k with a valuation of £54k. After a year, the price was reduced to £40k.

Chatting to local solicitors and my mortgage broker, I discovered that there was no market for one bed flats - too cheap for buy to let mortgages, and not appealing to first-time buyers who prefer bigger house with bigger mortgage over long term.

I looked at local prices for similar, worked out that they averaged at £35k, and offered that. My offer was accepted right away. Yes, I. Hold probably have had a lower offer accepted, but the flat was worth £35k to me, and I’m happy with that.

But you've already been told op they aren't holding out for the 390. That they are flexible. The degree of flexibility is what's in question. You want it cheap. And seem to be under the impression they aren't handling it correctly if they don't give you at least forty grand off.

The only correct way to handle it is the way they want to handle it. They maybe happy to let it sit till the spring to get the price they want.

I could maybe see your argument if it had been on the market for a year, no offers, and no interest, but after a month, I don't think any of us are getting it.

It is starting to look like you're trying to buy a house you can't afford and are desperately hoping the owners are happy to let you have it for less than it's worth.

The Ferret is also right about ceiling price. I’ve spent about £10k on my flat, and I wouldn’t expect to get that back if I sold now or in the foreseeable future. It might sell faster now with new windows and gas instead of white meter heating, and a new bathroom, but really I spent that money to make the flat better for me.

With property, there’s always a tension between money spent for improved quality of life and money spent for potential increased financial value.

It is starting to look like you're trying to buy a house you can't afford and are desperately hoping the owners are happy to let you have it for less than it's worth.

But the OPs well within her rights to offer only what she is willing to pay. No law against that.

@Bluntness100 to me, taking £360k on a £390k listing would be flexible. Holding out for £380k (if that’s what they’re doing) doesn’t seem flexible. And certainly not flexible enough to have told the estate agent to call and tell us that they are flexible?!

I wanted £30k off because that’s what I was happy to pay. I didn’t want to risk offering a price that was accepted immediately, because I’d feel I was overpaying. We could buy a house for £420k, move in straight away and have it be perfect. Or we could buy a project for less than our budget.

Buying a project at £380 and spending £50k isn’t necessarily beneficial compared to buying a house for £420k and not needing to do anything with it. Therefore the purchase price needs to be low enough to make it worth the effort of doing the work.

From what we’ve seen, the house is not worth what they’re asking. I’m certainly not wanting them to give it to me for less than it’s worth. I see where other people are coming from, to offer higher, and I also see the benefit of offering lower and moving towards a higher price.

I do think it’s relevant that the only other offer they’ve had (as far as we know, although the EA hasn’t been totally straight) has been for £340k. Of course, they don’t need to take it. But is a house really worth more than people are willing to pay? It doesn’t seem that it’s just us who felt we should offer lower

There are no rules. Value is largely subjective.

It is ime a bizarre game. Because there are vendors and buyers who think there are rules. And may be offended if you break their rules.

And I agree a lot can change in a month.

Is the house listed as offers in the region of?
If the sellers are flexible they would want people to know, not just you.

I wonder if they truly are flexible or whether the estate agents are trying to get an offer

@Freddiefox just a price, no wording.

I’m wondering that about the EA. Told me when I booked a viewing that the vendor had had no offers. Told my partner when he called this morning to make an offer that they’d already rejected an offer.

I could maybe see your argument if it had been on the market for a year, no offers, and no interest, but after a month, I don't think any of us are getting it.

Agree. The market is stagnant because of Brexit. If I was selling at the moment, unless I had an urgent need to move, I'd sit tight to see if the market improves (from a seller's POV).

Yes, I agree about Brexit. I wouldn’t want to sell now

You know op it’s worth a try, but I’ve found estate agents just say what they think you want to hear .
I have a house to sell, and we are flexible on the price within reason, and it’s advertised as offers in the region. We were made an offer about 50k less than the asking price which is really just a waste of time. I have said to the estate agent that I don’t want him to be shown around the property again as clearly it’s not the property for him, as while there is a degree of flexiblity, with such a low offer there isn’t where to go with it.
The estate agents wanted us to negotiate but we we’re worlds apart on a starting point.

I’m certainly not wanting them to give it to me for less than it’s worth

But this makes no sense, you said it was worth 380 in its current condition in your view. You've offered 330. You've now decided max is 350, this is exactly you wishing it for less than it's worth.

I also think @caringcarer ‘s case is hugely complicated from the fact that they are selling numerous properties to afford the 800. Would I want to accept that much below asking for something that is dependent on so many variables and could well fall through? No way. What is one of the sales is held up or falls through? Not unlikely at all so a 800 offer from a buyer in a difficult position would not be one I was wanting to accept unless the house had been on the market for 1+ year(s).

It seems like you’re misinterpreting flexible a bit? Flexible means they won’t hold out for asking. So on for £390, accept £385-375k maybe. You sound as though you think it would be normal to accept £385-375 and flexible means take off more on top. It really doesn’t.

As others have said they don’t pay for your kitchen extension and it’s likely already priced to take account of poor boiler and electrics.

I find the idea of offering a certain % below asking price baffling. I think you should offer what it is worth to you less a small amount for negotiation.

If a house was on at 300k but overpriced and only worth 200k you could knock off huge % and still be overpaying. If a house was underpriced by 100k people would quickly offer asking and over asking and the vendor would likely realise their mistake.

You said you think the house is worth 380k . The vendors asking price of 390k suggests they agree with you and think it is worth 380k. So why you want to pay up to 360 I don't know. There isn't a margin for profit on buying?!
Although you say you might be wrong about the value being 380k it might be 350 or 360.

The margin of negotiation is usually much smaller than you suggest so if you would be happy paying 360 offer 355 with a view to meeting at 360. (Not 330!) I think they will say no but if, as you say you wouldn't pay anymore, then you have nothing to lose.

A good way of assessing how you feel is to think if they turn down your 360 and you later see it sold for 362k/ 370k or whatever would you wish you had offered more or would you think "fair enough - I wouldn't have wanted to pay that".

@Bluntness100 I think you’re holding on a bit too strong to my initial suggestion that I thought the house was worth £380k. Having heard from the estate agent that someone else has offered £340k, I don’t think it’s worth £380k. I certainly am not going to pay so much more than I know other people have offered. So ignore the “it’s worth £380k” as it clearly isn’t.

I’ve never paid the asking price of a house before, and I’ve never been offered the asking price of a house before. So flexible to me, doesn’t mean anything other than the asking price.

@SunniDay until today, I thought I was happy to pay £360. Now I know another buyer has offered £340, I would probably still pay £350-&360 but definitely not more. And based on the other persons offer, I wouldn’t day my estimate of a £380k value was correct.

If I found out it sold for £362k I’d find another house.

Until you offer, you don’t know if they’ll accept or not. Until then, it’s all just speculation.

I see there’s another thread on AIBU with a psychic answering questions. You could ask her what you should offer.

Apart from anything else, that Estate Agent is spectacularly shit. When you phoned to arrange a viewing, you were told at that point they'd had no offers? And then, before even getting to the stage of making an offer yourself, the EA rang you to tell you that the vendors were very flexible on price??

But the other buyer (him of the £340k) doesn’t know anything about the house either?! Why would you take your lead from them?