Acceptable Offer Or Not?

[myron]

We have just viewed a fab house today that we would seriously like to make an offer on. It's on at 575K and has been on the market for exactly one month. Apparently, they've had tons of viewings but only one offer which was under serious negotiation but then went nowhere. The owners want to downsize to a newbuild and are under pressure to exchange pronto from the developer (as always). We are in rented already so will have no chain. Now, considering how much interest they have had - even though it hasn't seemed to translate into any acceptable proceedable offers, would you accept £499K from a no chain buyer? Secondly, could I tempt them with a slightly lower initial offer than that as a cash buyer? It's not in London and no real comparables since each house on that road is totally different. The most recent sale further down the road was in Dec 2010 for £490K but we can't tell whether that house is a comparable or not. Sorry, I'm not posting any links cos we really like the house!

Offer what you think is about right and fits in with you. No-one can tell you whether it would be acceptable or not. I would have no qualms about an offer of that sort. Would save a few k on stamp duty.

Don't give away how much you like the house. Be cool. Make the offer and wait patiently for an answer.

there is no harm in the offer. you could be pleasantly surprised. we made an offer in a similar situation around a stamp duty limit and got the result we wanted - they accepted our first offer. we really felt the price we offered was more than fair (in fact, over what we wanted), so it was a good compromise.

Start at £475k you can always increase.

We've decided to have a 2nd viewing first and take the gamble that no-one loves it as much as us. We would love to pay under the stamp duty threshold but 100k under the asking price? Would that be too cheeky?

The worse they can say is 'No'! Personally I think houses are still going on the market at high prices and are selling for a lot less than the asking price or sitting on the market for months and months.

I don't think anyone would accept that offer but you have nothing to lose by trying. Is the house extended? We looked at a house in the same road from the one we bough. From the front the look the same but inside & extension wise they were nothing alike. We paid around £70k more for ours & it was definitely worth that much more, to us at least.

I think they know as well as you where the stamp duty threshold is and if they've put it at £575K rather than £515K it's because they want to get nearer their asking price rather than closer to 500K.

I would be surprised if they would accept such a low offer when they've only been on the market a month, but you can try. There do seem to be some big reductions at the moment on houses that have been on the market for ages at unrealistic prices (they're finally realising they need to cut their losses) but I don't know that the market is panicky enough yet for vendors to accept that much less this quickly. But you've nothing to lose. Good luck.

You can try, but don't be surprised when they tell you to take a running jump, especially after only a month!

Nope, not extended, just painted and decorated extremely tastefully! Considering we have seen avocado bathrooms and early 80's kitchens in many houses of the same price bracket - it really appeals. We think that it is competitively priced because it's a good location plus in a good sized plot. However.... the house down the road on a similar sized plot (thanks to google earth) sold for £85K less in Dec 2010. Inside, it's quirky - definitely not everyone's cup of tea - probably why, it hasn't been snapped up in the last few weeks. Anyway, we've arranged for a 2nd viewing and the agent has agreed that they is some leeway on the price so we shall see....

You can ask and have nothing to lose but if I were the vendor I'd think you were taking the piss, chain or no chain.

But then it depends where you are - round here things are going for near asking price.

Round here anything decent goes for on or near asking price, and fairly quickly too. I doubt they'll drop that low. Fwiw, I sold house in similar bracket this time last year for 10k reduction in asking.

I try to think of it in terms of % reduction rather than an actual figure. For a first offer I think anything between 5-10% is passable as a first offer but I think offering nearly 15% off is pushing it really. I put in an offer of 6.5% off and eventually we agreed on 5.5% off.

I would say it will depend entirely on the vendors. We bought a house about a year ago for £50k under the asking price, having offered £75k below. The vendors were not short of a penny, and were very keen to move. They had been in house about 8 years, and seen it pretty much double in value.

We also looked at a house that needed a lot of work. Offered £25k under the asking price, and then I think we went to asking price. They haven't sold 18 months later, and the house is back on the market for £100k more!!! They don't want to sell.

Good luck.

Having been in a rental house for 9 mths, waiting for more houses to come on the market (which they seem to be doing) and watching prices falling in the meantime (albeit slowly thanks to property bee), we're not overly sentimental about it. In that time, we have only made one offer on a house (cos we're picky) and lost out to another chain free buyer within a week of it being on the market. Now, we are glad that's happened since this is definitely a better house albeit in a totally different location. It has definitely opened my mind to wider possibilities - we had been concentrating our efforts before on a specific road but now, we've widened our search criteria, there seems to more attractive options within our budget. Anyway, it's early days and there are definitely more houses coming on the market now compared to earlier in the year. We probably need to compare /contrast a few more and not rush into it anyway.

I would be surprised if they accepted an offer that much under the asking price. The house has only been on the market a month. If I was selling and someone offered such a huge percentage less than the asking price I'd refuse and probably wouldn't take any of their further offers seriously as I would be wary that someone making such a cheeky offer in the first place would throw up problems closer to exchange of contracts after surveys etc. But then I am a suspicious soul!

I've just seen a reduction in my area from 580 to 499 on a house which has only been on the market 3 weeks

the 580 was an obviously silly price when you compare it with other properties but I'm amazed someone would decide on a price then reduce so soon so drastically.

OP, I saw a comment on another thread that if you are making a 'silly' offer you should do everything you can to convince the agent you are serious, so you should really know your stuff about comparable properties and sold prices in the area, have your mortgage in place etc. Sounds sensible to me.

i think it depends on the situation but based on the information you have about comparable houses in the area, it doesn't sound that silly. What's silly is when a house is heavily overpriced, in the vendors' mistaken hope that it will intimidate buyers into offering more than they might have. That may not be the case here, but I don't think there's anything to lose by offering what you want to pay.

The average sale goes for 93% of asking price - and we are in a falling market don't forget.

The OP may not have all the info about the other house in the area though. That may have gone for less because of work that needed doing or because it was for a probate sale. Each house sale is individual and saying the other house went for less means squat, unless you know all the reasons why.

Well, my enthusiasm is somewhat dampened by the fact that I've found out that nothing has sold within 1/4 mile that has exceeded 499K and the most recent actual sold prices were 490K in Dec 2010 and 499K in Jan 2011. Somehow, I don't think that I love it that much to pay above the 'ceiling' price for that road especially in a falling market! Our 2nd viewing will be more critical with that in mind.

vendors are "having a go". the people we bought from were convinced by another agency they could get 100k more than what we paid - and i still think we paid too much.

they were then horribly disappointed by the first round offers. we came in after the price was reduced and still made a low offer, but again - more than what we thought was fair. i really wouldn't stretch yourself, it sounds like the agents are having an optimistic approach to see if someone is willing to pay too much.

Another house we've had our eye on in the same area has just been reduced by 75K and it is on a much bigger plot so we've decided to view that as well.

Well, we are trying to sell our house atm (no where near the price of the ones you are looking at! Are you in London/SE??) and because the chain on a house we like has fallen through and therefore they have reduced their asking price we are reducing our price by £15/20k as of today....

I think a lot of vendors just get a figure in their minds and just wont shift.....

There are houses near me (Derbyshire) that have been on the market for over a year AND THEY STILL ARENT LOWERING THE ASKING PRICE!!!

I think offering £499K for a £575k house is just fine. You might be offering too high since the asking price might be pitched to draw in a "low" £499k offer.

We're looking to buy in commuter Surrey. We're seeing "kite flying", houses put on massively over peak 07/08 prices which get reduced after a month or two by 10-15%. They then sell at another 10-15% below that. So the eventual selling price is 20-30% below the original ludicrous asking price. We looked at a house at £1.95m two months ago, its now on at £1.6m and the EA has told us that a 1.45m offer would get the house (which means we should offer £1.35m!).

The problem is that the housing market has split into a set of micromarkets. Not only every area is different but every price level is different aswell. We have friends in a affluent area of London who have just had to pay £3.5mm (the insane asking price) for a large detached house. However, they can't shift their 4 bed terraced house in the same area. It was on at £1.20mm and they reduced to £1.1mm. They would accept £950k but are simply not getting any interest at all.

We bought our house in January and it was on the market for £575k which was a lot over our budget. However, it was on the market for 3 months, so we went in with an offer of £530K. In the end they accepted £533k. Personally I think £499K is a bit tooo low. But you have nothing to lose, so go for it if you think you have a chance. You never know. I now have my dream house which I first thought was way beyond me.