Deciding whether an offer is reasonable

[abbey44]

If you have a house for sale, obviously it's unlikely you're going to get an offer at full asking price, I accept that, but how flexible is reasonable?

Say you've made sure there's nothing to do to the house, it's neutrally decorated, well presented, you've covered all the bases... And then someone comes along who loves it BUT they don't like the kitchen, say, or want to add something to their own particular taste - not because it needs doing, but because they want to... And they calculated that at, say, £50,000 and put in an offer that much below the usual margin. Would that be reasonable? (House is valued at c£550K)

I'm just trying to clarify in my own mind where my boundaries are.

No. If the house is worth the asking price, i.e. correctly valued, then why would a seller take a hit on price in order to fund the buyer's different tastes? Cheeky verging on rude and I would hold out for a better offer.

It's reasonable to the buyer, of course it is, they can only offer what it's worth to them. They cannot offer what it's worth to you. A valuation is really only a guide, it's never going to be a guarantee of what someone will pay.

It's your call. Can you afford the reduced offer? How long has it been on the market? Has there been other offers? How are houses selling in the areas? Do you need to sell quickly?

Ultimately a house is only worth what someone will pay. You can decline and wait for someone else. You can decline and wait for the market to catch up with you. If it does. But really it's a judgement call based on the above factors.

Thanks - that's neatly summed up my either/or views!

House is, I think, fairly valued, using very similar properties locally that have sold in the last couple of years. Even a bit below others, given that mine is larger and has land, so I'd say the price was ok. But the market in my area is slow. Stagnant even, at the level I'm at. Buyers aren't that thick on the ground, and those that are are extremely picky - the feedback I've had is along the lines of "lovely house, beautifully presented but..." and every "but" is different, which isn't helpful.

Whatever I sell for has to buy me another (smaller) house, plus enough in the bank to supplement my income enough to live on, given that I'm in that awkward pension gap age. It's been for sale for about 18 months now (but that's really not unusual round here) and I've only had one half-hearted offer ("its our dream house but we're £100K short - any chance...?") which didn't go anywhere, unsurprisingly. I'm in the position that if I have to drop any more I'll only be getting what I paid for it six years ago, and in that case I'd rather stay and look at a Plan B for income.

I'm very ambivalent at the moment....

I'd say well priced houses would sell within 18 months. One offer, well below the asking price, is (to me) an indication that it's likely to be overpriced. I think you need an honest EA ha ha or friend to give you an objective opinion as to what needs doing/ what they think it's worth and why it's not selling.

I don't think buyers care whether it's what you paid for it or whether its enough for you to move on, they just care what the value is to them usually based on the market/ other sold comparables.

Erm, that one offer was a try-on! The quote I gave was verbatim.

I've had two estate agents, both have valued the house at the same price, and I've dropped it £25K from that. I've tracked local sales on Rightmove & Zoopla and can see that I'm at or below what very similar properties have achieved, which backs up the valuation. I've had all the work doing that needs doing, and a house-dressing company in to make sure it's presented at its best and to confirm that there isn't anything I've missed. It was filmed for Escape to the Country and they loved it, so clearly I'm doing something right... I could give you a Rightmove link, but unless you're local to here, it probably wouldn't be much help.

I know what you're saying about buyers not caring about what I paid or whatever, and I agree, but that was just to point out that I don't think I'm being greedy about it.

10% below isn't that bad in a slow market and as an opening offer it's fine assuming you went back with 530.
Buyers watch property programmes and get bargain hunty ideas. I bought my first house at 10% below asking after offering 20% below as my first offer. You need to decide your floor price and keep an eye on your target houses.

You need to think about what the market is doing to the type of houses you are buying too.
I realise this is slightly different as I was moving up the ladder not down but I sold my first property at a MASSIVE loss, however I was able to buy the next house up at a price I could only have dreamed of 6 years previously. The 'price' of the house isn't particularly important whilst you are both buying and selling, what is important (for people going up the ladder) is that the jump is affordable, and (for yourself, downsizing) that the amount you will release from downsizing is enough to make it worth your while.
So, if the market is that stagnant where you are, I guess the houses you are looking to buy might also be prepared to take 10% less, so you have to look at the maths then.
Remember of course that an opening offer is just that, it doesn't mean it is necessarily their final offer. The longer it is on the market, the more likely people are to put in lower and lower offers.

I wasn't criticising OP, sorry if it came across that way, but your response effectively means that you've not had one serious offer in 18 months (if the only offer was, as you say, a try on). What I mean is that sometimes, because we live our own houses and decor, we value the house as we see It, not as potential buyers see it. So you think yours is larger and has land so I presume you think it's worth more. That's where you need an honest friend.

I am sure it's a lovely house but 18 months in the market - even a stagnant market - suggests it's overpriced and if you've had an offer 10% below the asking price, that might be indicative of its real value so definitely worth considering.

Maybe it's too perfect? People like to put their own stamp on a house, they like to have something to do to it. I remember back in the 80s we got to a silly stage where everyone wanted to do the Changing Rooms thing and make money on property: you could buy a perfect house for £X or buy a bit of a wreck for £Y and then spend £Z doing it up. It often ended up that Y+Z was more than X!
Can you put suggestions in your sales blurb along the lines of "what an amazing opportunity for the wannabe Beeny purchaser to build an annexe / add a garden room". Whet their appetite.

Alternatively, can you split some of the land from the house and get more for the two separate lots? Would you get planning permission for a house on the separate plot.

What did Escape to the Country say? What was their reason for not buying.

namechange the try-on offer was 20% below, not 10%. And within 24 hours they'd made an offer (and had it accepted) on a house they could afford, so they clearly weren't serious. And yes, being larger and with land I DO think counts for something. Shouldn't it? How else do you work out value? I've taken the advice of both the agents I've used as to the asking price, and the reduction, and employed the house-dressing company as an unbiased opinion of it - I don't really know how much more I can do...?

senua - too perfect - that'd be a new one! But I know what you mean. Maybe I should just undo some of the work I've done... The opportunities for extensions etc are limited by the planning restrictions in this area, so not really a goer, sadly. And I have made clear in the details that the land can be separated (I've already had three offers for the land & stables, which I am keeping in mind).

The Escape to the Country couple turned up, refused to get out of the car as they said they'd already seen it and threw everything into disarray. I could have whacked them with all the bloody lilies I'd arranged artistically round the house! I think the crew were as gobsmacked as I was as they'd been very excited at how many boxes the house had ticked on the wishlist and they'd already spent half a day filming all the interior and exterior shots.

Ooh please can we have a link

Large houses with land take much longer to sell than a Victorian terrace in an identikit road in London.

No advice how to speed things up tho sorry. Are you with the right E&A?

Could it be a layout issue? The layout maybe works perfectly for you, but not for the potential buyers (especially the case if you have a smaller kitchen or a conservatory). Then if everything is done up to a good standard, it really puts people off paying for a well presented house, but still wanting to knock down walls. Hope that makes sense?

It will sell if the price is right

I was always told by an EA friend that they always value houses around 10% more than they reasonably expect them to sell for and that anyone genuinely interested in the property will usually offer closer to the valuation than those just after a bargain.

By valuing higher the EA has more chance of gaining the vendors business (and being paid more if not fixed price) but the reality is they rarely expect it to sell for that price.

Have you gone back with a counter offer to the 50k below people? I'd never assume that people offer their best price first as buying a house is usually a negotiation.

Like pps have said, a house is only worth what people will buy it for at any given time. Sellers can choose to sell or choose to stick it out.

If you live quite rurally, you need to wait for people in the right price bracket who want to live in that area which will usually take more time than in a town/city.

OK, here's a link - have a look and tell me what you think...

www.rightmove.co.uk/property-for-sale/property-48649758.html

At the moment it's 550 for the house, 25 for the land. I've already had three offers for the land, and anyone interested in the house is told that the land can be separated, in case they just want the house.

I understand about estate agents valuing at 10% above, and initially the three agents I had round all valued it at 595. I've reduced it since then to its current price.

Abbey44 your house is gorgeous and I love the decor. I live in the SE and could only dream of owning a property like yours!

I think that it's a beautiful house, and you're getting a lot for your money. However, I am obviously biased because I live in the South East where property is considerably more expensive.

The only thing which would put me off personally is oil-fired central heating, although I appreciate when you are a rural location, this is one of the sacrifices you have to make.

So if you took £25k for the land from someone else then their offer is possibly ok for house not house plus land?

And, correct me if I'm wrong, but doesn't the rate of Stamp Duty jump up considerably for properties £500k and above? In which case you're unlikely to achieve any more than £499k.

Wow! Your house is absolutely beautiful!

I'd guess the problem is finding a buyer at the right price range who wants to live in that kind of house, in that location. It's perfect for the right person iyswim.

Looking at the similar location/number of bedroom properties, they're all cheaper. There's one similarly priced property under offer, but it looks to be located in a busier area.

If you're a family with a couple of young children who wants land and a rural location, you might be put off by the separation of the bedrooms. I can't really fault it in any other way!

It's very nice. My thoughts (been recently looking for 4 bed house with big garden in similar price bracket although different area) would be. Kitchen too small and separate. Bedrooms comparatively small and far apart. I would want to move the kitchen, but as I said earlier, that would mean ripping apart your beautiful home that I would be paying top dollar for. Not helpful for you but maybe gives some insight into why you might get a lower offer?

Lovely house and well presented ,
firstly please speak to an accountant who is on the ball with property tax law regarding selling the land separately as I think you will be liable for CGT (28% ) on anything other than your principle property .
It's a slow market at the moment but if you have only had the property on the market for a while be patient as you will find a buyer eventually
You will always get some joker trying you out at a silly offer , more so the higher value of property , have you asked the agent to push him up a bit for a better offer ? Go and have a chat to your estate agent and see how serious they think he is , I do think however you need to be open minded at accepting an offer of around 10% less than asked

This won't make sense but to me I'd be put off by the lifestyle. It isn't really a family house, in the way it's presented, more like a boutique hotel. It's lovely but I couldn't see my family running around being mucky. It needs a bit of informalising and a splash of colour or two....