Do I offer 20 % less or wait for 6 months

[raisinbran]

I quite like a 6 bed victorian semi detached house which is currently on at 410k.It was originally put on the market in Feb 10 at 425k.

The house has not been decorated for 10 years and will need new bathrooms and kitchen.I would have prefered a detached house but the potential for our ideal home is there, I roughtly guestimate that I would need to spend 70k maybe even 100k to get it the way I want it.

As I have inherited some money and I have nothing to sell I am a cash buyer. I do want a home to live in for the next 10 yrs, however I am cautious that the property bubble could burst and I could be in negative equity. I could live with the house price staying flat but I just dont want to lose my inheritance buying at the wrong time.

I have rented for the last 2 years so could wait another year. wwyd?

If you are going to spend 100k doing it up, remember that VAT goes up in Jan so you will pay 2.5% extra on everything that you buy for the house. That's a definite - what the property market might do otherwise is anyone's guess.

If you're going to worry about a price crash you'll never buy anything. If you really like the house just try and buy it before someone else does and you spend the next however long kicking yourself that you let it slip by.

If you want to stay in a home for the next 10 years you will not lose your inheritence. Nobody ever knows when the peak/bottom of the market is - the experts get it wrong so how likely can we predict.

I'm sure the fact that the house needs lots of work doing to it is already priced in to some extent.

Being a cash buyer may be attractive and worth a discount.

You have nothing to lose by making an offer have you.

If you are a cash buyer you don't need to worry about negative equity. You will have 100% equity. Even if the value of your property goes down even more in a falling market, then so will every other property. It is all relative.

I think asking for 20% off at this stage is unrealistic optimistic but if it has been on for 7 months with only a 3.5% drop in price, clearly there is room for negotiation.

Drusilla makes a 100% valid point about relative prices. I just wish that it was more widely appreciated!

Prices are faling at the moment because bansk are very cautious about lending to anyone who does not have a substantial amount of equity.

I think it extremely unlikely that prices will go up over the winter and much more likely to keep falling.

Yes 20% looks unrealistic now but in 12 months time it might look generous.

With cash you are in a strong bargaining position.

Thanks all for your comments some very valid points.
20% does seem low but you do hear stories of vendors adding 10% on to the house price expecting sellers to knock them down 10%, especially when EA try to get the contract so add extra to the price.The additional 10% would represent the fact that I am a cash buyer and I wouldn't be interested in buying the house as it isnt my ideal house without doing work to it. A friend said dont get emotionally attached as there is always another house.

I was thinking about explaining to the vendor that I would be more likely to make a very low offer and if she found somewhere willing to accept a low offer on a house she would like, then get back in touch and we could negotiate. The vendor said at the viewing she wont look at houses for herself until she has a buyer as nobody will take her seriously.

Don't try second guessing what the vendors will or won't accept. You can get yourself in a real mess convincing yourself that a house is worth x only to have the vendors laugh at your offer.

Decide what you think the house is worth, taking into account the work that needs doing. Then factor in you being a cash buyer as that is always worth a few thousand off the price. Make it clear to the agent why your offer is low and leave to the vendor to decide. Your friend's advice is very good and will prevent you paying more than you want for a house.