Buying a house - what would you offer for this, is agent playing a game?

[ASecretLemonadeDrinker]

My mum is buying a house, being told by some agents chains are crashing all over the place, by others they cannot get enough houses to meet demand . My mum and I saw and fell in love with a house, viewed 7 more but decided tomake an offer on house 1. My mum is a cash buyer. It is on for £279,000 but has no garden really, is overlooked, is abit quirky but perfect really for mum. THe owners say they have lived there for 22 years, but zoopla says it sold in 2009 for £250,000. We have been told previously (no idea when) a sale had fallen through at the last minute - would that make it seem like it had fully sold when infact it hadn't? Anyway, mum offered £250, it needs alot of work - nothing major but it's all very tired. That offer has just been turned down. Surely 250 seems fair for a house that sold for that in 2009? I think we will regret not getting it though, but offering the min. £275 they want will leave zero money to decorate/new kitchen/bathroom and possibly a little to finance. (mum is retiring in a month). THey also say there is an offer of £277 but that person is in a chain (I still though their offers counted?) Is there really another offer?? Are houses reaching a tiny bit under full asking price? My mum came down 30k on hers. :(

Yes stamp duty threshold! Excellent notion mamatomany.

There's a big difference between £250k and £277k. I do realise there is a stamp duty threshold, but £250k as a first offer is not good.

How about offering £260-£265k?

Whether or not it sold in 2005 is neither here nor there with regards to price (only that the agent might be telling fibs). Yes, house prices have dropped in some areas but you also need to take into account the rate of inflation etc. Its not just as simple as thinking they should be less.

Plus, never go by a Zoopla valuation! It says my flat should be worth £330k (its on the market for £285k). And I have seen it completely undervalue other properties as well.

Hometrack show 91.9 percent of asking price being achieved in January, and it's heading downwards. I really can't see that £250k is a bad offer. Of course, that doesn't mean that they will necessarily accept it. Lots of unsold houses sitting on the market month-on-month, year-on-year around my way.

Hometrack Summary

mum upped it to 260 (meaning a few more thousand in stamp duty too) but they want 275 and no less. We are giving another one a second viewing on Sunday, it's nice enough I guess.

Walk away.

definitely a cash buyer should get at least 5% discount. walk away more houses coming on the market over the next few months

Whether or not it sold in 2005 is neither here nor there with regards to price

You can look at the land registry details on www.nethouseprice.co.uk and find out exactly what they paid for it in 2005, the fact is that house price inflation is in the eye of the purchaser, they set the price, if nobody is prepared to pay £277 then the house is not worth that amount, end of conversation.
Persuading the sellers of that is the estate agents job and they simply are not used to breaking bad news to people so they don't and the house will sit on the market for years, one in our street has been on 4 years in March.

I think its a question of how much you like it - a house is worth (to you) as much as you're prepared to pay for it. Obviously if there is a mortgage etc then the bank has to be satisfied it has adequate security but if it is "the perfect" house for your mother, then paying slightly more than you want to is probably not too big an issue?

I agree with the other posters though that you have to stand your ground if you're determined not to go above the £260k your Mum has offered, it sometimes comes down to who can hold their nerve. The question is whether you'd be upset at losing it for the sake of £15k (or less perhaps if you upped your offer) or whether you're prepared to walk away.

Whilst the info about sale prices being 91% of asking prices is useful - I think there are pockets where the market is different - could this area be one of them? I know where we are, there is a shortage of reasonably priced houses, so although some of the expensive ones are going for less than the asking price, the family houses that are affordable are going for the asking price or more. We bought a few months ago and had to go to sealed bids.

As others have said a house is worth as much as anyone is prepared to pay for it. If your mum really loves the house and thinks it is perfect then she needs to ask herself whether she is prepared to let it go for the sake of £x.

If she is then fair enough but to lose out on a property just because she thinks you shouldn't pay asking price may be silly:

some houses are realistically priced from the outset

some house are sold by stubborn vendors who will not drop price regardless

some area of the country are still experiencing price rises.

If you want something sometimes you just have to pay.

And FWIW cash buyers don't make that much difference these days since many agents now require purchasers to have their mortgage offer in writing before they are permitted to submit offers.

I presume your mother doesn't have the pain of considering schools etc, so can pretty much please herself? And is a cash buyer, let's not forget, so the ball's very much in her court. If she wants to offer 260, then that is a more than positive move on her part. Especially if the house needs work to make it nice.
There will be many more houses - every house is different and every vendor situation is different. I presume she's not on a tight time frame? Don't be in a rush!! It's such a lot of money, and it needs to be right & at the right price.
A house is worth what someone is prepared to pay for it. (Cash has an actual value; it's a bit more intangible when it comes to bricks & mortar). I would imagine that is a very careful consideration when it's your very own hard-earned quarter of a million. If the vendor won't accept less than 275, then not much you can do apart from walk away and find an alternative.

Put your offer in writing to the agent (and post through the letterbox to the vendor direct, if you like). Specify time that offer will be available for. You can always go back if it hasn't sold and you haven't found something else in a couple months time.

Re-state your offer at £250,000 and walk away.

You're in a fantastic position and there are some serious bargains at this price tag because some people are desperate to sell and move whilst recognising their property is compromised by being priced so close to the stamp duty threshold.

Plus more and more houses will be sure to come on in the next couple of months as March is traditionally the busiest month for estate agents.

FWIW, stamp duty is a really unfair tax (on sellers too). It distorts the market and unfairly penalises because it isn't a stepped tax.

The New Forest is a very desirable area even in this economic climate most people will try to hold out for a good price.

They may well hold out for a 'good price', whatever that means, but it doesn't mean they'll get it. And if a vendor won't/can't sell to a chain-free cash buyer, then what?

What is the market in the New Forest? Second homes or commuters to London? Local job situation? Health of local employers? Public sector jobs? All groups of potential buyers shrinking? Cash-strapped families unable to raise the mortgage?

OP's mum has offered nearly £30K under the asking price. LR figure from 2007 could easily be a red herring as mentioned above.
There's a lot of room between 250 & 279 and whilst the stamp duty threshold is a factor (and I agree it's very unfair) we're not talking about an asking price of, say, £255K where it really would be of significance.

So the asking price is the only important factor? OPs mum made an offer based on affordability, and because there were a few compromises - needed work & overlooked. She has upped her offer in good faith and past the SDT. She doesn't have to up her offer any more. LR figure neither here nor there.

Why so stuck on level of the asking price? Surely it is simply a guide? A sale can only be achieved when both buyer & seller can come to terms; when the requirements of both can be met, surely. The vendor is quite free to reject and wait for more, and if they have no immediate plans to move then that might suit them - and why not. However OPs mum can always go elsewhere & buy something else that meets her requirements - position, state, price can be agreed closer to her comfortable level. That is the market.

Do get real.

Ah, yes. I see. It's the last ten years isn't it. Vendor asks for X, buyers flock, banks throw silly money at them and vendor ends up with X+20%. God forbid anyone should question the all hallowed 'valuation'. That would just be rude.

Can I also say that I don't believe anyone on this forum should be 'advising' the OP to add more to the offer her mum has put forward. That is a very dangerous precedent; to be giving financial advice to someone you don't know, and who's position personally & financially you know very little, and a marketed house about which is known even less - to be advising someone to spend another 10, 15,20k on it? I find it appalling. Shame on you.

Consider paying for a real valuation. The problem with being a cash buyer is that the vendors will think you won't check as you don't have a mortgage offer to comply with.

Personally I think the price is one of those which houses tend to get 'stuck' at - there are 3 in my area at that price, all have stuck. They are not good enough to be 300k ouses and they are not substantially better than 250k houses.

I would get a valuation and then reconsider based on that. And state to the estate agent that my offer at the moment is 250k and I may offer more if the valuer says it's worth it.