How much to offer? Don't want to overpay, don't want to be rude

[Foxongiraffe]

I could really do with some advice. We are looking for our first family home. Our max budget is 350. I am seeing two houses this week (one is a second viewing) on at 365 and 369. Both have been on the market for five months, both want to sell quickly as they have houses in mind. Both need some work doing.

We are chain free, ready to go (currently in a local rental property) with our deposit and mortgage offer sorted.
Bearing all this in mind, do you think 345 would be received as rude if we wanted to proceed? In this scenario what would you offer?

I'd offer 200 if that's the going rate for that type of house in that location.
Sorry to be flippant but what you offer should not be based simply on the asking price (or a % below that) but rather the state of the market and historically what the house would have fetched. Look at past sold prices and consider whether your market is going up or down.
Also don't worry about being rude - unless you've regularly got 350k to spend in which case you can afford to.

345,000 sounds fine.

Yes my post was probably too brief - the house that is asking 365 - next door sold a couple of months ago for 325 - It is smaller but in better condition.
The other house has a weird sloping garden, lots of stairs and a few odd things but is quite a nice size. Needs new boiler and new electrics. In that road (and very close by) houses haven't sold recently so it is hard to tell how much it is worth.

I am worried because the agents have obviously priced the houses for a reason and so I don't want to cause offence to the owners who may think they can get the asking price. 5 months in this area is quite a long time and as we haven't got a chain and are flexible for their needs I was hoping it might be possible to pay less. Maybe I am being naive.

I was taught that if you are not embarrassed when you make your first offer you've gone in too high. Served me well over the years

Our current place was originally priced at 150k more than the asking price at the point we bought it - and our purchase price was a further 50k below. So a total of 200k under the original asking price. Don't just assume there is a 'reason' for a given price (beyond the vendors would like that amount...)

You don't know these people. Do not worry about being rude.

It is a business transaction. Pay what the house is worth and no more.

I would go in lower, so 330 for your first offer, then you have the chance to up it to a final offer of 345.

In a well functioning market asking prices are usually 5-10% above the final sold price, so you could knock 36K off the asking price and it shouldn't cause offence.

However house buying is no place for being polite and worrying about the sellers feelings. You are buying your biggest ever purchase and you need to buy a place that is right for you and at a reasonable price.

The agents have priced the houses on the basis that they will earn more commission and they can talk about an improving market if they achieve higher than £325 on the first house. Whilst they may know the local area, they don't know any better than you or I do whether the market will be better or worse in a few months' time. They're salesmen on commission - remember that whenever you talk to them.

I'd go in at £325 on the basis that the market is very quiet and you're in an excellent position to move quickly (with no chain). Do not raise your offer straight away if it's turned down. Leave it and look at others and come back at £335 in a week or so's time. The sellers have been waiting for ages for you to come along - you're talking about a huge amount of money, don't give it away, you'll need every penny for when you move in.

Good luck.

Great advice. Thank you so much.

You have 2 houses to choose from they have, probably, only you interested. You could offer on both at the same price and see which you can get cheaper. You can also make the estate agent aware that you are doing this.

Remember they won't except your first offer but expect some amount of bartering. I would also go in lower to start with to give yourself more room to go up.

Don’t worry at all! Offer what you think fair for you. They shouldn’t be upset (unless they are ultra thin-skinned!!)

Having seen a few houses we now think that the 365 house could be a goer. Since starting this thread I have found out that the 365 house was originally on at 390, they rejected 375. Then after a while they had 2 offers at 360 which were accepted but the sales fell through.

As it has been on the market since August I am minded to offer 330. Do you think this is a decent offer? It is a quirky layout with a bedroom and bathroom on the ground floor and needs work.

You're in a decent position to move quickly - offer what you think you want to pay but make sure to stress 'chain-free, ready to move'. The amount you are proposing is only about 10% below asking, so not excessive. As others have said, this should be a business decision. (Yes, I know that's not so easy if you've fallen in love with the place.)

If it helps, think about it as you spending well in excess of a quarter of a million pounds - it's not small change from under the sofa (I assume!).

In your place, I'd probably kick-off at 15 - 20% under, but I am fond of not paying full price unless necessary.

Good luck whatever you decide.

It's highly unlikely that they'll accept your first offer.

You are the perfect buyer.
What do you want to pay for it, offer below that initially.
I'd have no hesitation starting at 310 to test the water.
Remember you have a lot of buying power in your position.

Oh and good luck :)

Thank you so much. It really helps. I think part of it is due to the fact that they should us round rather than the agent and they were so nice!

*showed us not should us!

I agree with Issy.

Also you are in a very strong position to move quickly, most vendors would be foolish to let a no chain buyer with all their finance in place slip away for an extra 5K from someone who still needs to sell, or may be locked into a long chain, or is struggling with finance etc, etc. All sorts could go wrong and they'd be back to square one. Use that to your advantage.

Offer 325 and go from there. Expect to get rejected then offer 330. They must be gutted they turned down 370!!

In such a strong buying position Im still of the mind 310 is good for starters.