Offer at guide price rejected??

[Running365]

We have found a house we'd like to buy and have an offer from a first time buyer for ours so we are ready to proceed. The house is listed as guide price £550k - £575k. We offered £550k yesterday and were told no other offers have been received when we viewed in the morning. The estate agent phoned me this morning to say the owner has looked at their finances and rejected the offer as it's too low. I'm slightly confused why guide price was listed at a price 'too low' as we assumed this would be the minimum acceptable offer. We don't see any point in raising our offer just because they rejected it based on price and there's no other offers at the moment. What would you do?!

If that’s your final offer then just leave it open for them to consider - if they don’t get any more then they might come back to you.

If you really want it though you may have to accept that they were thinking of the higher end of the “guide price” range and increase a bit.

When I was selling the guide price start was put at a number which hit more people's searches on Rightmoves, the number I'd accept was in the middle of the two. It's probably that - a marketing tactic

You’re probably looking at offering closer to the 575 mark.

I think it depends, if it's only been on for a very short time the seller might be holding out for a higher offer.
Unless it's been on for a year then I would be rather baffled as to why they rejected a price that's supposedly within their acceptable spectrum.

Our friends had a similar encounter guide price was 375-395 they offered 385 and were rejected...they loved the house so offered the top end of the guide and were still rejected as apparently the buyer was hoping it goes into the 400s
Last I heard they sold for 365K after keeping it on the market for ages and a new estate was built in the vicinity and interest dried up.

This is useful clarification thank you. It all feels like such a game! I think I'll go back to the estate agent and ask them if they can give me an indication of what an acceptable offer would be. It has only been on the market for a month but was reduced from £600k last weekend but now I assume that was to try and encourage more interest like you say.

Guide price is an interesting term, I usually take it to mean that the EA and the vendor don’t agree on the value (though that’s not always true, sometimes properties are difficult to value). Possibly the EA thinks the lower and the vendor wants the upper. Possibly it’s a marketing thing for rightmove. If it’s not been on the market long then it could be that they just want to wait and see. How much do you want the house?

Be careful, many people on here think that 1% below the asking /guide price is always a horrible insult and anything below asking +25% is just soooo 'meh'.

I think under those circumstances they would never accept offers at the lower end of the scale. However, if comparable properties have sold for what you've offered then you may find they come back to you. It is a bit of a game, unfortunately. We were told not to accept the first offer unless it was the full asking price so your first offer is rarely a 'serious' or final one.

I have never seen a guide price in all my years of buying homes and property development. Except for those going to auction, it's usually asking price, or oiro.
Is it a geographical thing, or new?
Looking at downsizing ourselves soon and would like to be aware, obviously.

I'd up the offer a bit, and be prepared to sit it out if you really love the house.

'Guide price' over' and 'offers in the region of' are very irritating things to see. I know what I can afford and I don't want to waste their time or mine, so be clear about what you're looking for. If you won't actually accept anything under 180k, don't list the guide price as 170-180k, that's stupid.

'Guide price' also tends to mean 'selling through the "modern method of auction", at least in this area, and that puts me off immediately also.

I hate this house price dance.
Why can’t people just say how much they are prepared to accept and leave it at that?

It just feels like we are 'bidding' with ourselves at the moment. We do like the property but it seems ridiculous to just suddenly offer an extra £10k-£20k just because that's what the vendor thinks it's worth but equally we don't want to lose it by not upping our offer soon enough.

Haha the British hatred of negotiation. I live and work in Middle East and love the dance of haggling. You’ve given an offer, they’ve said no, it’s now their job to counteroffer - don’t give them any other numbers, just pressure them to outline what they want. Your counteroffer to that should be incremental, and you’ll come down somewhere in between. Make sure you know all of the faults with the house, that will help keep the price down.

Guide price is an interesting term, I usually take it to mean that the EA and the vendor don’t agree on the value

We have our place up as a guide price.
We had 5 agents to value the place. There were 2 outliers who were around £500,000 different and 3 who who were around £120,000 different. We put it up for the average of the middle 3 with the middle valuing agent, mainly because the others just didn’t seem interested in it.
It went on for less than this agent valued it at.

We would like an offer somewhere near the price but otherwise we have a much lower figure in mind so if anyone wants to make a cheeky bid they might be very happy.

Before this sale I always thought guide prices were for auction properties.

It's a game, as you say. Only you know the local market, how desperate the sellers are ( or will be in 3 months...), How much you want the house, to know whether it is worth upping your offer immediately to secure it.

Other than auctions, I’d also perceive as ‘guide price’ meaning that agent and vendor don’t agree on what it should be. It also looks like they might have reluctantly lowered the price for 600k but probably still feel the house is worth more than what they’ve now got it on.

It's such a mind game and difficult not to get carried away. We've just had an offer accepted.

I'm in Scotland. The house was offers over £340k and home report value is £380k. The offers over number is just to get interest which I accept so didn't expect to pay that. We offered home report value for it but it was turned down due to there being loads of interest. Solicitor told us to expect to pay anywhere up to £420k if it was a popular house. We were prepared to offer more on it if pushed but solicitor suggested not increasing it right away because it shows your hand and it gives the agent the opportunity to push other offers up and create a bidding war that could see us priced out if it really was as popular as they were saying. We sat it out waiting to hear about a closing date, however, four days after rejecting the offer the estate agent came back to say the home report offer was accepted. Massive relief and meant we avoided a closing date with best and final offers but we had four days of stress and sleepless nights thinking about it.

All that said, this happened within days of the property going to market so I can understand why the seller would reject an offer so early. If the property has been on longer it's worth asking if there's a figure they would accept to take it off market to try and cut through the mind games.

It's really stressful and there's no way of knowing what's right to do - it just comes down to the personal circumstances of the people involved. Our seller had an offer accepted elsewhere so suppose they didn't have the luxury of time to wait for a better offer.

Lots of luck OP.

I’d also perceive as ‘guide price’ meaning that agent and vendor don’t agree on what it should be. It also looks like they might have reluctantly lowered the price for 600k but probably still feel the house is worth more than what they’ve now got it on

Where as we are the opposite.

I can see that it is well worth the price it is on for. But I will accept much lower and wanted to put it on for less than the agent just to get it gone and move on.

Years ago you would take the price as a guide and offer what you thought the house was worth so there wouldn’t be so much of a problem as getting the price absolutely correct

Eg if something was up for £375,000 then that would mean an offer of £325 or £330,000 wouldn’t be too ridiculous where as now people seem scared of offering £368,000

I think that really depends on the area and how common homes are. My area you're a fool to pay more than 95% of asking price. I've yet to see a house go for over asking (although post covid that may have changed). If things are overpriced they stay on the market for months. I don't know why you advertise at a particular price and then refuse to take it. Maybe not accept for a few days just to see what on average people will be willing to pay but beyond that people generally expect 95%

When we were looking we viewed at house with the guide price £335-350k. EA told us they were looking for a quick sale as they were divorcing and it had already been on the market several months. We offered £335k and were rejected, EA told us the vendors wanted a price towards the higher end. So we offered on a house down the street we also liked with a bigger garden and got it for £338k.

The original house sold 3 months later for £325k. Everytime I walk past it I think how they should have accepted our offer, but fortunately for us they didn't!

So I don't like guide prices but in our case we were lucky it didn't work in our favour!

They are looking at the higher end. That’s fair enough. I also dislike these corridors as they are misleading. If they don’t wish to sell at this price they don’t need to.

Ask as you said what they do wish and decide if it’s worth it to you.

@Oliversmumsarmy so your house falls into the second half of my sentence: houses that are difficult to value (though a swing of half a mil between highest and lowest valuation is surely unusual anyway)