How much to offer

[Rightnow1245]

Would like to get some Opinions on what to offer on a house!

So as we all know house prices are going down and we have seen a house we like for 450k.. it’s only been on the market for a week and we wanted to offer 400k
We are first time cash buyers so think we are in a good position!
I don’t want to offend the vendor so she doesn’t sell to us but we can’t get a mortgage and we only have 400k.. we may be able to get a little loan hence why we looked at the property... what’s everybody thoughts on offering lower than asking price?

Thanks

That's quite a big reduction but if that is your top offer then do it and see what happens.

Just offer the most you would want to pay.

I don’t know how the market is in your area - where we are there is quite a healthy interest within our price region. The vendor of our dream house wanted to get at least 8% under asking price. We expressed interest from the beginning and told the vendor we absolutely loved the house but had a restricted budget, so we didn’t put in an offer as there was another bidder who started bidding at 20% under asking price and went up in increments to 10% under asking price. I think the vendor hoped he would offer once more, but he didn’t budge on his final offer. Summer came and went and there was no other offer (or viewing), as asking price wasn’t reduced. Meanwhile the highest bidder moved on and bought another property, so we took our chance, emphasized again how much we loved the house and went in with our max bid of 15% under asking price! The vendor remembered us and because he wants a quick sale now (house is unoccupied), he accepted our offer, as we were so keen from the beginning! So there is a chance your low offer might be accepted, but it completely depends on the circumstances- and a big portion of luck! I would offer 400k with an explanation of your financial situation. But I would also be open to get an extra loan to go up a bit. It all comes down to how much the house is worth to you though and if there are other potential bidders. Good luck!

Depends where the house is located

Most areas other than London either have small rises in the past year upto 4% or small reductions.

A 11% reduction is pretty big so unless they over priced it and they've has no interest I would politely decline, especially as it’s only been on a week.

But what do you have to lose? Just offer it! Worst they can do is say no and start a thread on here saying how insulted they feel.

Thanks for you advice.. how long after viewing the property is good to make the offer? We went to see it on Friday so would Monday be to keen?

Motherof3Dragons You got a great deal in the end! It’s north London

Squirreltamer haha that would be funny 😂

A week on is a bit early to drop that much but who knows , they might

Don't get carried away by the ' market is dropping ' as some area its very buoyant still with good prices being achieved , it's just a bit slower than the previous couple of years and totally expected with 29 th March looming , people are being understandably cautious

If I offer I usually do so straightaway , I show proof of funds to the agent straight away too , that way they know I'm serious .

Offer, if the accept, great. If they refuse and come back with what they'll accept, you can either try and negotiate or leave your offer on the table.

I’ve been looking at sold prices on that road and there has never been a house that’s sold for more than 432! That was also in 2016 when the market was much stronger.. so we should be able to get it closer to our price??? Well that’s my thinking 🤔

speakingtruthfully I know not everywhere has dropped so much but in London it’s defo a good time for first time buyers! Well it’s just outside London 😊

sbplanet I Defo think that’s a good idea to negotiate and if she doesn’t take that, we will have to leave the next offer on the table 🤔

Honestly I'd say after a week of being on the market your chances are slim. Offer by all means, but expect to be turned down. If you 'only' have £400k, you are stretching yourselves looking at £450k houses, think about it logically, why would the vendor take 50k less after a week?

I did get a similar discount BUT that was after the house being on the market for over two years, and a sale falling through.

there has never been a house that’s sold for more than 432

Have you checked the photos and floor plans on the old listings, to ensure that you're comparing like with like?

E.g. Is this house extended and therefore bigger? Is it newly renovated while the others needed doing up? Those sorts of things do make a difference.

In London the market may be dipping, but that isn't the case in my area.

I did get a similar discount BUT that was after the house being on the market for over two years, and a sale falling through.

This is my experience too. Vendors will consider lower offers further down the line, but not after a week.

I too would add that offering more than 10% under when it has been on for a week is highly unlikely to be successful.
People take a lot longer than that to reassess their house value... Some take years like another poster has mentioned

Go for it, you never know.

user1484830599 I think you’re right I don’t think it will be accepted but we also got 50k off a property before but ended up not going ahead for personal reasons.. so I know it’s possible but like you said it’s only been a week!

WomanWithAltitude yes I have looked at photos and the house actually had a loft room, which this house doesn’t! It is also done to a similar spec.. so hopefully that’s a good sign 🤔

alex She is moving for a job so I know they haven’t got a lot of time.. but I know a week is a very short time 😬

peachy Thanks I have spoken to the EA but not yet put in the offer.. I wanted to know a few more things before making it.. hopefully will hear back from the EA soon!

If there are time constraints from the seller then I would definitely put your offer in and leave it there

£50k is a a lot off the asking price! I wouldn’t be surprised if they say no especially after a week

I think you should go for it...you don’t have anything to lose by doing so.

I’d give reasons to qualify/explain your offer eg the previous sales prices you’ve found, any things that may need addressing in the property, concerns about a stagnant if not falling market (tie this into your views/research re previous sales), etc. Also sell the fact that you are cash buyers who can commit (eg a large deposit) quickly and complete quickly as this has real value.

Good luck!

OP we have knocked almost 70k off the house we are buying and it wasn't on the market that long.

Thanks everyone for your messages!! so we put our offer forward and she rejected it 😢 I thought it would be the case, like most of you said! Now the question is where to go from here??? I really love the house and don’t want to lose it but I’m not paying asking price as I don’t think the house is worth that much in this current market.. even the EA tell me that business is bad 😂
How much would you go to in the next offer? Or would you do one last offer with the best you can do? So we will probably have to get a loan for the rest of the money so we can only get so much anyway.. what’s the best way to do this! We wanna get a good deal 😊

peachy Wow that’s a great discount.. well done you 😊

There is no formula unfortunately and it is really down to what you want to pay and whether they agree.

10% off a 200k house is very different to 10% off a 450k house, as you have found out. With the house being on for such a short time, you have little wiggle room.

Is it unique, the best around, have you viewed the others and decided nothing compares? If so then offer the most you can afford and cut out the stress. 445k too much? What's your gut feeling to 435k? Etc. That's the way to work it out.

OR - is there something else comparable that you like? If so, offer a price that you can live with, and if it falls through, offer on the other.

People will tell you the market is slow. I beg to differ. Sure, we dropped ours massively to sell but we were eager to move. The people we are buying off drove a very hard bargain - they were in no rush, unlike us. Many properties are still going for over 97% of the asking price here. It comes down to how much you like it and how far you want to go.

Offer what you think it is worth, and provided you can afford it.

Thanks for your messages.. We are going for a second viewing to see if we want to increase our offer!! Thank you everyone for your help 😊

There are 3 good reasons every FTB should not be shy about making low offers in this twitchy market:

1/ It might be accepted.

2/ You're an FTB, so by definition, not under the same pressure to buy as somebody with an offer on their place accepted - if your first offer is accepted, you could probably have bought it for less. You have time to walk away from a few. Prices are no longer keeping up with inflation and are falling in some places. You don't need to rush.

3/ If every first time buyer low-balls sellers, then it will lower their expectations. Many other buyers already are. If you offer 400k and the two viewers both offer 410k, they are much more likely to counter-offer and negotiate with one. So, make a couple of low offers, eventually you'll make one to a fed up seller ready to talk - refer to point 1.

For people saying £50k is a lot of money... depends who to!

If you're a seller with a vacant property you own outright in London that's up for £450k, but objectively worth £425k, then the first £25k is in your imagination anyway. If you hang on for that £425k and it doesn't materialise, a 6% drop in prices wipes it all out - then you'll still have an unsold property in a declining market worth under £400k.

On the other hand, if you're a first time buyer, at the current standard variable rates, borrowing another £50k to rush in with an asking price offer because "it's perfect" will cost you about £275 a month for the next 25 years.

Food for thought?

IMO £50k less than asking price does seem a lot off, but as time passes and if no other offers come in then your offer will be in the back of the sellers mind, so no harm in trying, but maybe brace yourself for a quick no.