Offering under asking price - how low is too low?

[CityDweller]

Let's say, hypothetically , a house is on the market for 1.1million. House is lovely and in a very desirable location, and quite unique. But definitely needs a new bathroom and kitchen and garden needs some serious attention. Windows probably need replacing too (single-glazed, and only have those old fashioned fasteners, iykwim). Plus is has a history of structural issues (subsidence, recent, but resolved - we're aware of the implications of a house with such a history).

If you were still interested enough to put in an offer, and barring any further 'issues' that may be revealed by a structural survey, how low would you go without feeling like you're taking the piss? Been on the market for about 3 months, but owners not in any hurry to sell.

Is £925k, i.e. about 15% below asking price, rudely low?

I was always told if you're not embarrassed making the offer, it's too high

Hmm - so perhaps we should go in stupidly low then... I don't want them to think we're not 'serious' though. But I also don't want to pay over the odds when we're going to have to spent an arm and a leg doing it up.

It really depends on whether its a fair asking price or not? The agent should be happy to justify its price and say that he's allowed for a new kitchen and bathroom. He may not of allowed enough for the garden, or the subsidence history (which sorted or not would put alot of people off).

Just to ask for a 15% reduction ie because thats what you can afford is one thing, and thats fair enough - but unlikely to produce results in an unmotivated seller.

Its always better to justify that price with comparables or work needed (that hasnt already been taking into account).

Getting a true value is hard for more expensive properties as they do tend to be more unusual and hard to compare, but equally they tend to appeal to less people and people think as they're spending £1m they shouldnt have to compromise.

Good luck

That's the thing - it's really hard to know whether it's a fair asking price or not. It's an unusual house and houses with similar number of bedrooms can go for anything from £600k to £1.6m in the surrounding area, depending on many factors.

We could afford the asking price, but I'm just not convinced the house is worth it, and have a feeling the sellers put it on at a high price to 'test the market' kind of thing.

Ask the agent to justify it. Tell him you think x or y compares and that sold for £800k or whatever. See why he has priced it that high.

Someone just offered £17k under the asking price for ours, due to "a loose floorboards, oh, and the patio stones have some weeds in."

If you can justify a low offer with research/genuine work the house needs then no problem.

I'm surprised he listened to himself and wasn't embarrassed!!

If it's unique and in a very desirable location it seems likely a buyer will come along and offer a good price for it, I'd have thought.

i always offer what I think it is worth.

typical research will be comparison of recently sold houses or try to use landregistry/rightmove/zoopla estimation value sensibly

I used to offer 88% of asking price of 900K house recently, and the agent sounds surprised but nevertheless she has to pass my offer to the vendor anyway. It was rejected and after a few days the vendor decided not selling and take the house off the market. At least it is a good way to find out how much commitment of the vendor want to sell..

Estate agents don't have to pass on every offer if the vendor has given them permission to reject offers below a certain point (this is what I do when I am selling to avoid having to discuss unreasonable offers). So there is every chance, the sellers might not even hear about your -15% offer, much less your justifications for it.

I guess "unreasonable" is from the sellers prospective, if sellers sets asking price much higher than "fair value" and don't want to negotiate lower offers, that means seller has little incentive to sell except for making profit, I will try to avoid this kind of property

I would screen out too low offers, also. So I wouldnt even hear about them.

Anyway OP, are you going to show us the house?!

I always sell at asking price or very close to so I guess I must, having done research and taken advice, be asking a fair price. It doesn't stop people putting in absurd offers though which is tiresome.

In the OP's case, it does seem very difficult to value this house given the spread of values for the surrounding area and the uniqueness of the house. The garden needing work and a new kitchen and bathroom being desirable wouldn't knock a whole lot of money off the house, imo (although that hints to me that there might be a lot more hidden stuff to do - wiring/plumbing etc) but the subsidence could mean it is virtually unmortgageable and so all bets are off in terms of value.

Can I ask a question. Single glazed windows with old fashioned fasteners......................surely they don't affect the value of a house?

Am I way out of date? Where I live, they appear to be the norm. (Victorian terraces abound)

Keeping original windows is, imo, a very middle class trait. I live in "naice" area of SW London, all period houses, nearly all of which have original windows or very carefully matched replacements. When we lived in not-so-nice area of SE London, they were a rarity. We lived in a listed house and couldn't replace them - our neighbours used to tell us how sorry they felt for us...

But, no, unless windows were rotten and/or couldn't be closed, I wouldn't have thought they would make a huge difference to the price.

The house is on the market for the first time in about 40 years, it's on a sort of private road with only one other house that sold 10 years ago (and is a different configuration/ size). There really is no way to logically determine what it's actually worth. To me, a house is worth what someone is willing to pay for it and the fact that it's been on the market for 3ish months tells me that it's priced too high - otherwise it would have sold by now because it's lovely and unique and while there's a lot of work that needs doing to it, it's not a wreck. I guess the subsidence history could also be putting people off, but it's in an area where subsidence issues are common.

And yes, I agree about the windows not reducing the price. I viewed the house again and saw that actually they're in a fine condition and have additional locks to make them secure. But the garden would cost a lot of money to sort out (it's completely un-child-friendly, in fact very dangerous, for a house that is, essentially, a family house). I'd guess it needs at a minimum £50k spent on it, and it would be easy to double that. In doing up the bathroom you'd lose one of the bedrooms, which would in turn lower the price of the property a bit. And then you need to take into account the subsidence history.

For comparison, I just saw online another house about 10 mins walk from this one, in same school 'catchment', same number of bedrooms. Not as 'unique', but completely done up and with v. large garden. On for £1,075,000.

Replacing original windows with modern windows actually devalues period property. Most sash and cash windows can be prepared, if not replicas are best ,
If not listed can get wooden double glazed sash and cash, if listed may need single glazed, original single glazing would have been thick 6mm glass not ordinary 4mm standard single glazing

I would offer just under 1 million

You should offer what it's worth to you and be prepared to walk away or negotiate. There are no rules on this.
Sometimes a low offer may come in when the timing is right for the seller.

Thanks for responding about the windows. Thought I was losing my marbles for a moment there.

OP ..the other one is 150k more than you want to offer, but it isn't as unique. Ok. Is it also on a private road?

I don't think 150k covers a new kitchen and bathrooms and some gardening, if the other one isn't on a par, regarding privacy and specialness. BUT! What do I know?! Zilch, really.

If it's listed you may not be able to change the style of the windows - might be worth checking.

I always look at subjective changes that need to be made - "I don't like the bathroom" and objective changes - "the roof is falling in"

I would accept a reduced offer for objective changes but not so much for subjective changes.