another low offer

[spagboll]

How best to do this? We are fist time buyers. House we want is on at £250K, we want to pay £150K. It has been on for six months, it is a three bed townhouse, no garage, tiny tiny garden, ok internally.

It is not selling because no storeage, garage or garden to speak of. Market has gone down significantly here but agents still are optimistic Vendor very pleasant, he wants to move asap.

Ha! If someone offered me 100k less that the asking price I would probably, after picking myself up off the floor, just think you were time wasters and would probably tell the agent not to bother me with anything further you had to say (I would be concerned that you were going to have problems getting any sort of mortgage as well)

And the price someone paid for the property is completely and utterly irrelevant IMO.

You can offer whatever you want on a house - my BIL bought theirs about 15 years ago and got nearly 40% off the asking price then - now the house is worth 6 times the amount they paid for it!

I really don't get the logic of 'they've made a low offer therefore they must be timewasters' - can someone please explain to me why they think it follows?
There are all sorts of reasons why people make low offers, ranging from them being simply the kind of person that likes playing hardball, to them loving the house but literally not having a budget to go higher, to them simply being bearish about the state of the market. It might equally be someone who has done their research and is open-eyed about the state of the house and makes them less likely to drop the offer after survey than someone who comes blithely in and offers the asking price without really thinking it through.
In a rising market you can see why it would make sense, but in a falling market writing off buyers because you don't like their first offer seems like a really risky strategy.
If you don't like the offer, fine, ignore that offer but then deciding you're not interested in subsequent offers from that buyer seems to me to risk cutting your nose off to spite your face.

I think there is a difference between a low offer and offering way below a property's true offer, seth. I could make an offer on a property that was 40% under the asking price because, perhaps, it had been overvalued by 35% and I might be able to show why I thought that offer reflected its true price. But to make an offer of a certain amount because that was what I wanted to spend looks, in my opinion, idiotic and I wouldn't blame a vendor for refusing to have anything more to do with that buyer. It shows that the buyers are pretty naive and unlikely to make a smooth purchase. Ultimately, unless they are absolutely desperate, why would a seller want to engage with someone who offers 60% then perhaps is nudged up to 62%, 64% and so on? As you say, they don't have to accept an offer and they are such poles apart it looks unlikely that they would be able to meet anywhere in the middle so many sellers would just prefer to look for someone else.

How does his asking price compare to other things on the market in the area? If he's being wildly optimistic and other similar properties are on for 150-175k, then an absurd offer such as that may be worth making. If not, all you can do is make it and be prepared to be disappointed.

Hello all, thanks for all your thoughts. Saw it again today. did not like it so always good to do that second viewing.

Had a frank and honest discussion with agent who admitted willingly falling market but said if we could get it for what we want to pay we wouldn't as he would gazump us and then flip it! So that is where all the hsg bargains go.

He as much as admitted that in 18 to 24 months time it is not unlikely that its value may be around what we want to pay.

C'est la vie.

What does "flip it mean"? Is he saying he would pay a bit more than you and then sell it on?

Seth - when we were selling our house we were really worried about accepting an offer, taking it off the market and then getting blown out by the buyer a couple of months down the line. If someone had come to us with a crazily low offer I would have been really suspicious that they weren't serious about buying it, or that they weren't able to raise enough money to buy at a more reasonable price. As another poster suggested, I might have accepted a higher offer from them, but I wouldn't have taken the property off the market as I wouldn't have really believed it was going to go through.

spawn yes flip means buy it and sell on immediately (or after small renovations) at a profit. It indicates that the Estate Agent recognises that if the OP's offer is along way below market value.

If someone came to me with a crazy offer I would be inclined not to bother with them - people like that tend to be hard work and not worth the effort in the long run (I have learnt this lesson the hard way after renting out properties)

Just a quick point to all who have said they wouldn't consider a higher offer from someone who offered too low in the first place.

Yes you would.

What is a serious buyer or not serious buyer ? They are just variations of the same thing.

People who want your house. If i offer 100k, then 150k and its accepted but you don't believe me, you will when i pay 1K for a structural survey and your solicitor informs you my mortgage is approved.

Anyone no matter how much they offer can pull out for any reason until you exchange contracts. So don't think you'll be all huffy about it. Be real.

OP is right it is crazy to buy a house in a plumetting market which this market is. Very sensible to make a realistic offer. People are still expecting the market to do what it has in the past, those days are probably gone. There needs to be recognition of this. There are a lot of vested interests in the housing market and understandably people are worried. For many child benefit is going, vat is going up, train fares are going up, jobs are going - wake up and smell the coffee!

Also the caps in housing benefit will have the effect of deadening the market.

awubble - really, I wouldn't, and it's irritating to be flatly contradicted by someone in this way...do you really think you know my mind better than I do?!. Massively low offer = flakey purchaser = high likelihood for hassle. I was entirely hassle-averse and wouldn't have taken the chance.

You and Wollstone sound like those housepricecrash loons. I have no axe to grind wrt a falling market. In fact it would suit me v well if that was the case! However I will eat my hat if house prices are going to fall by another 40% in the next year or so.

What?

There's low offers and there's taking the piss.

Spagbol you'll probably be able to buy it at $100k within the next year.

spawn says it exactly right.

I have turned down low offers and refused to deal with people who have made ridiculous offers. Experience tells me these are going to be the same people who want £10k off after the survey because the windows are old - despite this being patently obvious when the offer was made; or demand a £20k reduction the day before exchange because in their opinion the market is falling.

wollstone even if you are right about the "plummeting market" and there is nothing to suggest that this is true apart from a couple of nutters who are desperate to see the crash (and will no doubt be muttering doom and gloom when they are priced out of the market for the second time) then the fact is the vast majority of people will simply not sell their homes due to negative equity.

Those that do sell because they have to will be in the minority and that shortage of properties will keep them in demand.

Nancydrewrocked - ha ha ha....sounds like you are worried about your "investment property"

If you think there is nothing to suggest a plummeting market then you indeed are on a different planet.

Read the papers, watch the news, install property bee, look at property snake, read house price crash website.

prices are likely to fall in a lot of places (though not all) though I wouldn't put too much trust in HPC website etc.... there is a bit of a selection bias in the info on those sites

the trouble is though, you can't realistically expect a vendor to accept a 40% lower offer on the basis that you think the market is going to fall 40% in a year. You have to wait until the market has actually fallen some more; if you don't want to pay somewhere in the region of what houses are actually going for you just have to wait.

Lalalonglegs - thanks for explaining. I still don't get the concept of a property having a 'true price' though - the price is only what someone will pay and the vendor is prepared to accept, it has no objective reality apart from that. If it has only been on the market 6 months I agree it would be naive to think the vendor is likely to accept such a low offer, but after a seriously long time with no offers it's a much more open question what that figure would be.

moos I am not in the slightest bit worried about my "investment property". I have a couple of properties that I have come to let out by virtue of living overseas. One has no mortgage on it and the other will become our family home when we return permenantly to the UK.

I have absolutely no reason to sell either so it matters not a bit to me personally whether prices rise or fall - they will never fall to the extent that I would have negative equity.

Maybe it depends where you live but where I am (London and Home Counties) there is little evidence of any sort of crash. There has been some drop in the market compared to 30mths ago - when the market was at it's peak and you could basically ask (and get) what you wanted but prices continue to rise month on month.

The doomongers have been forcasting a crash "next year" since I bought my first property in 1999. If they say it enough eventually it to shall come to pass

Well I can see that its a bit irrelevant as you no longer like the house but . . .

We saw a house on saturday and are considering putting in an offer at 20% under its asking price. Have discussed with agent as house needs a lot of work and we'd need to do another viewing but I didn't want to time waste if the vendor wouldn't consider such an offer.

However vendor is keen for us to view again and has certainly not discounted such an offer. Must confess I'm very surprised as thought they'd laugh us out of the water but we'll see.

It helps though that I've been looking for 2 years and think I've got a good idea of what is a fair price for the properties in our target market.

SpawnChorus

Well, i think very few people would actually turn down an offer they are willing to accept just because someone had previously chanced their arm with a low offer. Especially in a buyers market.

I agree a 40% market drop would be at the extreme end of possibilities but we're not talking about that here. 250 is the asking price and 150 the prospective sale price.

Who knows how overpriced it is and what will happen in the next 12 months. 15-25% is certainly within the median of many forecasts.

I can see that if you had two buyers offering around the same, you might prefer to go with the one who hadn't previously pissed you off with a low offer, but otherwise I agree with Awubble. If you refuse to deal with someone who is offering money when no-one else is you would need to be pretty confident that another buyer is going to come along soon.