House on market for £535k, offer of £495k. Would you accept?

[AnnieMated1]

Our house has been on the market for about 6 weeks and straightaway we had two full asking price offers of £535k.

They have both since been withdrawn because one couple couldn't get their mortgage approved, the other because she cannot sell her own house at a high enough price to be able to afford ours.

Last week we received an offer of £475k, which was increased a day later to £485k. They have come back today with £495k.

The agent reckons they can squeeze them to around £499k ie just under the stamp duty threshold, but that they will not budge beyond this. I get that - I would do the same!

But, but, but - we have no real clue whether to accept it. We haven't found anywhere, and in fact will probably got into rented for a short time to make sure we don't rush into anything.

The issue is that £40k below asking seems low to me - thinking of it in terms of real cold hard cash that we have available to put towards our next home - but is it? It works out at 92% of the asking price I think - is that low? Or about what you'd expect?

We are in Surrey - easy commuting distance to London - and the agent reckons the MMR process is already cooling house buying here. My fear is that this then is the top of the market and we wouldn't get this price again in a year or so when we really do need to move for secondary schools.

Any thoughts? Would you accept?

Are other houses in the area getting their asking price or not?

I've just considered selling a house which was valued by various agents at between 140-150k and the agents said to get between 135-140k, maybe 145k. So about 10k less. So 40k less on a house 4x as much sounds reasonable but it depends on the local market.

Nationally prices still seem to be rising. What's mmr?

Part of me thinks six weeks is nothing and if you've had 2 full price offers there'll be more. But the stamp duty threshold will be a sticking point for many.

I'd accept. It's less than 10% below the asking price and if the market does continue to cool then it is less and less likely that you will find a buyer who is willing to pay the additional cost of buying over the stamp duty threshold. The house is worth not only what someone is willing to pay for it but what they can afford to pay for it, and it sounds like your first two offers are cautionary examples of this.

We offered on a house that was on at £515 and offered just under threshold. Unfortunately there was LOTS of interest and to have any chance of keeping in the running we had to bite the bucket and accept that it would need an offer over £500. Finally sold for £570. Given you're on at £535 and in no rush too sell, I may be included to wait and see what happens. You can always decline and if they don't up their offer within a week or so then go back and accept lower offer. Usually most people will keep the lower one on the table...

10% below asking is a reasonable offer I think, depending on how popular the area is. I can understand the stamp duty threshold issue too: push for 499 though.

The first two lots of people offered you the asking price, but actually they couldn't afford it.

I'd push the current potential buyers to 499 and accept that.

There are various sites (mouseprice for example) where you can see the average asking price:sold price ratio in your area. That would be good. If it's 95% + I'd hold firm.

But if not, stamp duty is a big'un. If people aren't going straight to asking price, and are hovering below 500k, it's unlikely they'll go above. What about proposing a deal eg 499,999 for the house and then 20k for some of the fixtures and fittings? I THINK that's legal!

It isn't legal any more stinkingbishop. Unless you can prove they are worth the 20k.

Ah. Well don't do that then!

That's tricky. It is quite low, assuming that 535k was a fair price. The agent wants you to accept so that they get their commission - they don't care about the extra 40k. So don't take their advice too seriously.
How many viewings have you had - is there reason to believe you will get further offers if you wait?

I think it's true the market is cooling, so yes, I would accept. If you're going into rented for a bit it could well work to your benefit if prices drop. Might not work out like that, but i think it's unlikely prices will rise any higher at least.

The problem with saying no, is that there is plenty of publicity about the housing market cooling, interest rates going up etc. You COULD find yourself dropping the price in a few months time and wishing you'd taken this. But of course it's all a gamble.

Accept.

Accept.

Hold out a few more weeks if you can, but you may have to accept.

We just accepted an offer for asking price on ours (which was higher than agents suggested asking) the day after our open house. It was on the market for 10 days. The house we are selling is 2 up 2 down terrace. The houses we are looking at are 4 beds big garden.....and we are being sent more houses at new lower prices than we are houses new to the market. So we are making silly low offers or holding out.

That said, if our dream home came available, we had the cash to pay for it, and it seemed a fair price, we would pay asking just to get moving.

I don't think I'd risk being out of the property ladder in case the market keeps going up.

On the other hand, it's 40k, but it's less than 10% the asking price, which is perfectly reasonable, particularly as you are so close to the tax threshold.

You won't get many good offers until you find yourself a new place, I don't think.

This is off-topic, but I thought the stamp duty changed at anything OVER £500k. So £500k still pays the 3% stamp duty, but £500,001 pays the next stamp duty band (5%?).

So you could get them up to £500k.

Why not reject it but keep looking for your next place. You can always accept it in a couple of weeks' time. The market isn't going to drop £40k in a month or so.

If it wasnt for the stampduty threshold I'd say reject it as presumably the Agent said it was worth £535k? Or did they say put it on at £535 to get £500?

However with the threshold, it is unlikley someone will offer £510 or even £520 - so you're looking only at people who'd offer more or less full asking price and thats rare.

They sound like they really want it and the fact you have had higher offers mean its likely to be popular.
However houses just above a stamp duty threshold often struggle sell for above it, because people, just have a psychological barrier about paying the higher rate. So they may be willing to pay £575k because its substantially above, but not £510k if you see what I mean.
So, did you price it expecting to get £499k or did you really expect the extra 35k?

I wouldn't worry about the market dropping anytime soon. You can brave it out and hold out for more and hope these people are still about if you don't get it. Or you can accept £499k.

For most people, paying £35k off the mortgage takes a fair while. Think of it like that and if you really can do without that money towards your next home.

Whats is correct about it being over 500k to tip into 4%

No you pay it on the full amount. so 4% of 535,000.

I think pricing any property at approx 30-40k above a SD threshold is asking for people to put their offer just under the threshold - it's ridiculous because it means you either face putting it on artificially high (but being prepared to take an offer) - eg. on at 565k accept 530k. I do often think when I see an asking price "are they pricing it at X because really they want Y?" - a good example being a house I like the look of which is priced at £765k - I think they want to get £750k for it. All conjecture of course [:)]

I think you should take the offer, if you can handle the hit. FWIW, I've just put my place on the market in London and all the agents I've spoken to have said the same about the MMR cooling effect having taken hold already. I think it's a bit tumbleweedy now whereas just three months ago the market was a crazed frenzy of activity. Only in a frenzied market, in my experience over the years, would I expect to get the actual asking price or over for a property.

the stupid setup of stamp duty (thresholds rather than gradual) gives you a problem.

push to £499,950 and accept.

I'd accept it as I think it's reasonable to expect consider offers of 90% of the asking price. Add on top the market starting to cool a bit and the stamp duty threshold, I think you will struggle to get an offer close to your asking price.

It's all swings and roundabouts really in the property market. We sold our flat at the start of the boom in 2007 and by the time the sale went through in the June we could have asked £30k more for it. But most of the flats that went on then at the higher prices failed to sell and then the market plummeted. So yes we may have got more but I was just happy to have sold and have the money to move on.

£500,000.00 is still 3%, it's £500,000.01 that goes to 4%.

So tell them £500k or nothing.