buying houses - how much do we offer?

[sandal]

We're interested in a house which has been on the market for 2 months...went to see it the other day and the estate agent called today to ask for feedback. We love it but it is just beyond what we can afford having done some realistic sums since the viewing. I explained that to the agent today when she called and she said that as it'd been on the market for 2 months, the time was probably right to put in a speculative, lower offer. Thing is dh and I are pretty clueless about how much less to offer - the house is on (overpriced in comparison to others in the area imo) at 279,000. What's a good starting point? Thoughts from anyone who has more of a clue than us would be much appreciated

Difficult to judge without knowing where, what , how big , amount of land with it etc. A negotiated reduction is fairly subjective but you could think about the following :-
Has it been at £279k for 2 months or have they dropped already. (they probably won't drop much if they already feel they have had to)
Do you consider that the house needs work doing to it not reflected in the asking price?
Are they desperate to move (fallen in love with another property, job relocation, divorce) or can they afford to hold out and hope ?
If you think it is overpriced start off at what you feel is realistic for the area.
I doubt they will go below £250k as that would be a psychological watershed unless they really have overcooked it but then it is up to the agent to agree to market it at a realistic value in the first place.

hth

Depending where the property is and the price it is on the market for, are two facters to consider, I work for an estate agent and advise anyone who is interested in a property to put any offer to the vendor 'via the estate agents' the worst they can say is no, this may give you an idea on how much they are actually looking for. Estate Agents will put any offer forward to a vendor especially if you are in a good buying position, ie Property Sold, First Time Buyer, Nothing to Sell.

Anyone who is looking at a property outside of their budget bewarned, you may be extending yourselve's financially, speak to an Independent Mortgage Advisor, even if you have a mortgage in place, then budget around this and stick to looking at properties you know you can afford, this way when mortgage interest payment's rise you will still be able to cope with the monthly out going's.

To be speculative, I'd offer 235k. Doesn't stamp duty increase at 250k, making it substantially more expensive anyway?

If you can afford it, you could go up from that to 250k and save yourself 2%/5k from which only the govt benefits!

On our first flat, which had just been reduced from 85k to 75k, we offered 65k, stuck at 65k and then increased to 67.5k with guaranteed 4 week completion.

If you watch any of those hot property type programmes, they always go in pretty low and then play it very cool.

Stamp duty increases at £250K - if you agree a price which is close to £250K, say £260K then you can apportion £10,001 to fixtures and fittings. You have to be careful and not take the mickey otherwise customs and excise might investigate. This will save you stamp duty.

Do you know the situation of the people selling the house, i.e. have they found somewhere they want to buy and are desparate to sell. We recently sold our flat for an offer way below what we would have accepted 3 months ago because - after two previous buyers had pulled out for random reasons - we had found a house we wanted to buy and they could move quickly (and were not in a chain). Also - what is your position? Do you have anything to sell? If not, that puts you in a very good position. I would be tempted to put in a low offer of, say, £240k with the expectation that it will be rejected. Then increase to £245k and finally £249k or whatever is the maximum you would be happy / can afford to pay. You've got nothing to lose with putting in a low offer. Good luck!

Thanks everyone, just got online just now and it's nice to have some ideas to work with
The price hasn't been dropped yet, and the vendors have an interest (dunno if that means an offer?) in another property and they are keen to sell. Ours has just gone on the market but should hopefully sell reasonably fast. Having talked it over in more detail with dh last night we decided that it really is overpriced in comparison to others in the area, mainly because the vendors have recently done it up and then decided to sell and are obviously keen to recoup the money they've spent. We'll put in an offer of 240000 and see what happens...I'll keep you updated!

sandal - do you know how much they paid for it? Do you have friends in the area?

A house locally sold for 275k last year (about 14months ago). The new owner has put in double glazing, laid some fresh tarmac on the drive, given it a lick of paint and allegedly updated the kitchen and bathroom although I haven't seen that particular building work going on and I walk past it every day during term time so tend to notice the skips! Maybe he did that in the school hols!

Anyway, it has just gone on the market for 400k and sold within four weeks. I am totally gosmacked. There's no way he spent more than 30k updating it, absolute max, IMO, even if he changed the kitchen and bathroom and there was no 'big deal' stuff in the details about that e.g. local designer names. If a friend of mine had been considering buying it, I'd have let them know the history and suggested a really low bid! A similar house nearby sold for 369k about four months ago - also recently refurbished - and the new owners have completed gutted it and started again.

Lots of happy builders and interior designers making money round here!

It doesn't hurt to start low and work your way up, does it? I might offer around 10% below, or £249k... Also, that price puts you at a lower stamp duty threshold, so worth trying for.

You can use the tools at Hometrack to see what percentage of asking price houses in that postcode seem to actually sell for. And tools at Nationwide would tell you how much houses at that postcode have increased in recent years.

I agree with Azure. Put in a ridiculously low offer of 240, then work your way up. It's all psycological but what the hell. Houses ate the price you are buying are stagnating since the ftbs have dried up as such and if these people are desparate the move they will get their future house price lowered in the same way. Lots of people are keeping houses on market that are overpriced at the moment. They have seriously missed the boat. That happened last year.