Making a lower offer on a property we think is overpriced.

[sar302]

We're planning to offer on a property. We could afford the asking price, but there is a virtually identical house on the next road (same estate, same size, same decorative state) that sold two months ago (through the same estate agent) that was marketed for £30,000 less than the one we're looking at, and actually sold for about £40,000 less in the end.

The house has been on the market for around 6 months. There are no other recently sold houses on the estate (by recent I mean within the last 30 odd years) to compare to.

How do we word a lower offer, in a way that is, I suppose, polite, but still highlights the discrepancy. We're first time buyers and this is our first offer, so it's all a bit new!

Thank you!

Should add, 40,000 off is about 10% of the asking price

I don't think it matters how you word it, just offer what you think it's worth and they will either accept or reject. You can always negotiate up to what you think you would be willing to pay for it, but if it's been on for 6 months, perhaps they don't want to lower the price?

I don’t think you need to justify your offer.

If the house has been on the market for 6 months and not sold, it probably is overpriced. The vendors are unlikely to be expecting a full asking price offer at this stage, and if they are expecting one it’s pretty unrealistic.

I’d definitely go in 10% below asking, and potentially be prepared to negotiate.

I’d go in lower and if rejected say ‘well can you keep it on the table for now, while we look around other properties’ and see if they’ll come back with a counter offer.

Don’t rush into anything even if the EA tells you there’s other interest.

You just make the offer, you don't say why. If you expect/are only prepared to pay the £40k reduced price you need to offer less than that in the first instance.

Unfortunately people often price their houses at what they "need" rather than what they're worth, so it may be that they can't afford to sell at the same price as the neighbouring house or that they're happy to stay unless they get what they want. It will come down to whether you want the house or they want the price the most.

I assume you will be offering through an estate agent. They will be aware (or should be) of how much the other house sold for. You can say you are also aware of the sold price and in light of that you want to offer £X. The agent works for the seller and will try and get the best price possible, but a buyer in hand is worth more to them than the few hundred more they would make on commission at a higher sale price. So, they may try and make you offer more but are also obliged to put your offer to the seller.
You can offer below what you are prepared to pay to leave room for negitiation, or offer what you are prepared to pay and say this is your 'best and final' offer. You have a good case for a lower offer as the other house is of equal size and condition and sold so recently. Be prepared for an initial rejection or a counter offer no matter what you say, but if you've said 'best and final', stick to it.
It is not a matter of being polite. This is how it works.

What @Pipandmum said, but also suggest that in light of the other house's price you believe the bank would be unlikely to lend you an extra £40k for what is essentially the same property.

Most buyers think most sellers overprice their houses! You will no doubt do the same when you're a seller. Just offer what you think and prepare to be refused.

Some people put houses up for more knowing that people will knock them down in price to make sure they get what they want/need
All you can do it offer and see what happens.

When my FIL went to sell his property, the house next door had sold 3 months earlier, exact same layout, same plot size etc but was a probate sale so they took a slightly lower price for it because it was a probate sale and they wanted it shifted (we knew the family).

FIL realised he couldn't justify his asking price being much higher so also took a hit and sold at the same price. I get his feeling on it but fact is it would have been hard to argue a higher price. After all a property is only worth what someone will pay for it.

Just offer lower to the estate agents giving your reasons for why it is lower. They will probably reject it, but leave the offer on the table.

You don't need to worry about the wording behind your offer to the buyers. You shouldn't be dealing with them direct anyway (unless they aren't using an Agent).

You can put your reasoning to their Estate Agents (keep back the fact you can afford to pay more). See if they come up with any counter arguments.

If their Estate Agent has any sense they will do the negotiating for you.

Thank you all.

Yes, we will be dealing with the estate agent, so I think I need to relax about the wording.

We will go for it and see where we get to!

Sellers will often get their house valued and decide to put up for a higher price than it's been valued at. They very rarely get the price they want if it's priced to high, estate agents will advise them of this when an offer is put in.

Don’t forget to stress that you are FTBs, so no chain, and flexible re completion dates etc.

I wouldn't bother. Overpricing usually speaks volumes about a stubborn and unrealistic attitude of the sellers.