are offers 10% below asking price cheeky?

[stilllovingmysleep]

Hi all, we're soon to buy our first home (renting so far) & I have no idea how things work (we're in London). Frankly, I'm finding the prices ridiculous and in some cases unexplained--at least to me (eg 2 very different properties at same asking price). Would it be unreasonable to come in with offers that are 10% below asking price? It has to do with affordability for us too. We are chain free & ready to go.

Generally, any advice to be able to buy a nice house (not fancy, just a decent 3 bed near a station) at lower possible price much appreciated. E.g. what would you be aiming for (needing some work or ready) and how would you frame your offer to attract (and not offend) sellers?

Being chain-free and ready to go is a huge attraction to most sellers, so that's a really positive point for you.
As for the offer, it really depends on what the market is doing, how long a particular house has been on and what the sellers position is. Round here, houses are taking 6-12 months to sell but it seems because everything was very buoyant last year, sellers have possibly inflated ideas of price and not many are taking cheeky offers (we've tried a few!) . So the same houses sit there for months.
Can you research actual sold prices in the area for similar properties? It should give you a good idea of whether your idea of the price is more realistic.

Completely reasonable. Make the offer, treat it as an opener from which to start negotiations or justify it.

You are in a very strong position as you have nothing to sell and that makes you an attractive proposition. Always mention that in your negotiations.

If you are buying from someone on a chain, they may be able to pass the hit on when they make an offer (we took less than we wanted on out London flat, but went back to our vendors and reduced our offer to reflect the loss).

If there is a lot to do, make sure you are clear that that has formed the basis of your offer.

Even if you have an offer accepted and the survey comes back with loads that needs to be done, you can renegotiate at that point too.

And be prepared to give a final offer and walk away. They may come after you.

You are in a good position not being in a chain. Remind them of that at every opportunity. You could be the key to your vendor moving and getting what they want.

Good luck.

Of course not. A property is worth what someone is willing to pay for it.

If you gave genuine reasons for the offer (needs building work, it's overpriced, it's as high as we can go) and it's not time wasting (offering a ridiculous amount) it's perfectly acceptable.

If you are right, and that's what it's worth you may get it. If you are wrong you will be out bid. Be prepared for counter offers.

We got our house at 10% discount which was luck (they had a new property mortgaged and were under pressure to sell) and the property being "unusual" for the market (a large family home with a tiny yard) that suited us so we had no competition.

Right move show sold prices for similar (if not the same) properties. And Zoopla.

Thanks so much for this. For example, there's a house we really really love (both DH & I), a lovely period property, but it has a big negative which is a tiny bathroom with minuscule bathtub (would have to be made into shower room I think) plus on busy road. I've asked architect to check whether loft conversion possible in future which might mean possibility of bathtub in a few years...but for now I think the house has these negatives & I feel is overpriced (looking at sold houses / other houses in area). Sellers keen to move out quickly as want to leave country I think. I'm thinking of a 10% down offer, thoughts? Should I go even below or is that then too much?

It's just an opening figure. When we were looking we always went in 10-15% lower. One house that we did that on we lost as they wouldn't budge on asking price but we genuinely believed it was only worth what we offered as it needed so much work doing to it. We lost it but ended up with the right place so going with our gut feel worked out. Again offered about 12% lower, ended up getting it for 95% of the asking price.

Do people get offended? It's just a financial transaction. I would expect a bit of negotiation.

It is never a problem to offer low. I always look at it as at least you would be giving the vendors the opportunity of selling. But don't assume such a low offer will be accepted, regardless of whether you think it should be.

If you think the busy road is a problem, others will too and that could make it difficult to sell. Use that to your advantage.

The re-modelling I see less of a negotiating tool as this is down to personal needs/wants - but still worth mentioning.

We accepted an offer 10% below the asking price on our last house as we were desperate to sell and we put in (and had accepted) an offer 10% below on the one we're in now. It had been on the market for ages and a previous sale had fallen through which we knew. Not London though.

No! Definitely not. Houses are all put on the market with low offers in mind.

Your first offer should cause offence. So some say. I kind of agree.

We offered 30% under the asking price for the house we live in now . . . Reasons: it had been on the market a long time, it was clearly overpriced, the market was falling at the time, we had the cash in the bank ready to go. For us it was definitely a 'good enough' house, and that was all we were willing to pay. The buyers dithered for a long time, then took it!

They were second home owners who wouldn't be in the area, but still, we also made a low offer to some people we knew. That was very much in terms of 'we love your house, this is all we can possibly afford, we totally understand you will probably turn us down'. They did, because they got a (slightly) better offer, no hard feelings on either side.

OTOH, we offered well over the market price for a piece of land we desperately wanted, where we knew the owners were uncertain about selling - we were looking to make an offer they couldn't refuse. So it all depends on the circumstances.

I think it really depends on what the market is doing - things are going for over the asking price here. I am always slightly surprised that people assume you can knock off a sum because it has a negative - if its something as obvious as a busy road, the vendor has surely priced accordingly. So whilst as others have said, you can make whatever offer you like, don't be surprised if the vendor says no.

I think it depends on area. Like others said, right move shows marketed and sold price. I have never seen anything sold for 10% less than marketed. When we bought in 2009 we tried at 10% less and was rejected for 3-4 properties! Our neighbours all sold within a month outside London. And I thought London is supposed to be going above asking price?

I mean we gave up on the 10% back in 2009 as the vendor weren't even interested in giving a price back at that offer.

House prices seem to be dropping in London so I'd go in with the low offer. We offered 15% below askin price for a property in East London in 2011, and the seller accepted our offer when we put it up to 13% below. We had just been gazumped on another property so we had our mortgage in place and were ready to go. The sellers were also keen to sell asap as they had inherited the house, so they preferred to sell it immediately for less money rather than wait and get the asking price. Worth a try?

Mandy, I don't at all get the sense that vendors price accordingly, I think they price way higher than they should (in London): just my view. The houses in the area we're looking have asking prices for much much higher than a few years ago (even 2 years ago). If London is not an over-priced market, I don't know what is.

And also, if you can't suggest a lower sum (to start with) on the basis of a perceived negative and also on the basis of 'that's what I can afford' then on what else will you base it on?

I agree, OP. Some estate agents foxtons actually deliberately overprice their properties in order to get the vendor to use them, then cut the price several weeks later when strangely enough it hasn't sold.

A house is worth what a buyer will pay for it, not whatever random figure the seller and EA have decided to price it as today. Yeah they might say no, but equally they're not going to offer to knock £ off of you make a higher initial offer so don't ask, don't get. Go for it OP!

Its all about how you phrase the offer. Sellers clearly want the best price possible but they know they won't always get the full asking price.

IME the thing that is most likely to make them refuse an offer is if they think that they can do a lot better just by waiting another week or two (wouldn't you wait a week if it meant you'd get another £10k?). So sellers always ask the agent if they think you could go a bit higher - the magic words to indicate you can't are "final offer".

The second most likely reason that people refuse offers are because they have taken a dislike to the potential buyer. Maybe the buyer has come into their home, sniffed at their choice of decor, made sarcastic remarks about the house and garden or been at pains to find minor faults in the hope of weakening the seller into accepting a lower price before finally condescending to make a lowish offer in the hope of getting a bargain. It really does not work. I've seen sellers cut their noses off to spite their faces rather than let an obnoxious buyer win.

Thanks for all this info. I'm keen to make the 10% below offer just to try. Of course it might not work .

We are not going to talk at this stage about a 'final offer' but I also won't mention it's a 'starting point' as that invites them to come back asking for more. As for sarcastic remarks etc about the house, that thankfully is the opposite from us as we've fallen in love with this particular house.

Say you like the house but let the agent believe that there is another house you like too (sold by another agent). Make the offer respectfully emphasising your ability to be flexible i.e. move at a speed that suits the seller. This way you'll have the best chance. Good luck.

PS Until the words "final offer" are said, the agent will be likely be advising the seller to try for a little more. It doesn't make much difference to his commission but it helps the agency's reputation for getting good prices, which will be what you will be looking for when you come to sell. Obviously its the seller who chooses and pays the agent, so that's who he ultimately wants to keep happy.

You could try to soften the agent and the vendor up by indicating that you'll probably make an offer but it may not be as much as the seller might like. Then give that message some time to sink in before you actually make the offer.

The real problem is that I bet the agent got you to register with him before he showed you the property and you told him how much you could spend if you found the perfect property (which does not exist, of course). So, now the agent knows how far you can stretch.

If you don't ask, you don't get. We put an offer of £85k on our first flat as it was the absolute maximum we could afford. It was on the market for £95k so I was quite sure we'd be turned down. But to our surprise the seller accepted straight away. He was going through a messy divorce and wanted rid.

I would have said yes but a friend has put in an offer of £360,000 on a house with an asking price of £330,000 and been turned down as the seller had 19 different offers So I guess it depends on the local market!