Buying: how to pitch an offer

[Mendi]

Please help because I am rubbish at this! I've found a house I really like, but its marketing price is well above my budget. It's on at £495k. The most I could afford to pay is £425k (at a push).

It has been on the market since start of March. The vendors bought in 2001 for £200k. Zoopla estimate of current value says £408k BUT vendors have added a small extension which adds a living room and fourth bedroom to the original layout (which is presumably what Zoopla bases its estimation on, then applying a percentage increase in line with property sales in that area in the intervening period? I'm guessing about how Zoopla works!).

So, first question is: would an offer around £425k be way too low for a house on at £495k? Next question is would an offer around £425k actually be over-offering, given the Zoopla estimate?

It's worth what people are willing to pay, so something like zoopla is a very partial picture. If that's all you can afford give it a go, they can only say no. What do your own comparisons, including the renovations you know about tell you?

offer what you are willing to pay. They will either accept or refuse.

it is a business transaction. No need to worry about causing offence.

It's hard to know LastOne. From other houses I've seen, this one looks very expensive at £500k but if it was being marketed for £450k I would think that was fair and expect to pay around £405k-£415k.

As you say, it's only worth what someone will pay. I think I'll look at a few more before deciding about whether to offer.

I just spoke to a couple of people who have had their house valued for market. Both were told to price at between 5% - 10% above what they were prepared to accept, in a reasonable market in the south/south west.
Obvs. following that rule you'd be looking at offering £475k down to £450k but if it's been on since March and they haven't had any offers you never know. Definitely worth a go at £415/£425 - they can only say no but you could be lucky.

i think it depends on how much you can afford, and how much you want it, a bit of a balencing act!!!! We have just moved. As we moved to a more expensive area, could not afford an equivalent house to the one we left. So when this house came along, it was the first one that came anywhere near to what we were hoping for, and it was empty, which was an added advantage. After a lot of thought, and a lot of zoopla/land registry searching, we went straight in at the asking price the day after it went on the market. There was nothing truly comparable on zoopla sold prices section to guide us, and we didnt want to risk loosing it. I guess a house is only worth what someone is willing to pay for it, and the vendors must have been rubbing their hands in glee. I guess we could have tried knocking the price down, but such houses go so quickly that it was a risk we felt we couldnt take. Incidently, the zoopla value is now 25k more than we paid for it, but we all know zoopla estimations arent very accurate!!!

Zoopla was about 75 out on my house.

Owners have extended, may have loft converted or converted an unlivable project into something nice. It's really hard to know how much they have done and the origional state they bought the house in many moons ago.

Ignore Zoopla, 4 indentical houses on our developement, one sold before the banking crisis, we offered a week before, the two others after the banking crisis, one by some time and after the first buyer lost their mortgage offer. On Zoopla the valuations vary by 100k. Yes a couple are slightly nicer plots but not 30% nicer.
Offer what you can afford, they can say yes or they can say no. I think it depends on their situation and why they are selling.
ie, they have made over 250k and my be willing to take a hit on this if they have found their ideal property or are downsizing. They may not be desperate to sell and sit around for a really good offer. They may be splitting up and need every penny they can but in the mean time need to sell quickly.
Can you ask the estate agent what the situation is ?

Zoopla estimates are based on the actual sold prices in the same postcode... So if you are looking at a street of similar houses where there have been plenty of recent sales, you will find they're reasonable accurate. But if you're looking where house types vary, or where there are only a couple of sales each year, they can be so far out they're useless.

I would ignore Zoopla and look at other houses in the area. And certainly don't worry about making a low offer - the worst that can happen is that they'll say no.

My house has been on since March and we've just accepted an offer at 5% under. We feel happy with that as we wouldn't expect to achieve asking price and the buyer is chain free.