Should we go to asking price?

[herewegonumberthree]

Any advice please! We have found a house we like which is up for £495k. We know one exactly the same sold next door for £480k within the past month so we are pretty sure it's overpriced.

We've put in three offers and been clear we don't want to go above £480 and at a push £485 but the vendor won't budge below £490.

Should we up our offer to £490 even though we are definitely paying more than it's worth, or cut our losses and walk away (knowing he won't be able to sell it for £490 so might come crawling back in a week or two)

Keen to stitch things up before stamp duty holiday ends so it's a now or never thing

The risk you've got (if you really want the house) is that someone else will buy the house anyway and the higher price may become the new normal for the street as it will be the most recent comparable.

Also possible that the seller won't sell to you if he thinks you've been half-hearted about it and will end up selling to someone else at the lower price in which case you've still got to wait for another similar house to come up. Do they come up reasonably often?

@GU24Mum very true. I think he would struggle to sell at full price in a normal world but this is the only decent house with these specs on the market in the area at the moment so there probably will be competition. As far as I can see, the other house is the only one on that street that's sold for years, definitely don't come up often on that street or in that area so should probably just suck it up and go for the higher offer!

You have decided the house is ‘overpriced’ but there is no such thing: houses go for what people pay, or what sellers accept.

The other house might have been ‘underpriced’ because the vendor needed to sell within days and stipulated a very short, or even very long completion date. All sorts of things affect the price.

Round us the market is flooded with starter flats but it is a sellers market for family homes.

Perhaps the sale was agreed months and months ago and the conveyancing took a very long time. If the sale was agreed say 10 months ago, you'd need to take property inflation into account if you're in a property 'hot spot'. Or it may have been a private sale with no agents fees involved. etc

there is only a narrow window for the stamp duty holiday (unless it is extended which is not known at the moment) and so if there are few houses available then there will be upward pressure on price. Sounds like the case here. Of course come January the situation could be different again, volatile times. this is why no one can guarantee to play the market

But I'm also mega pissed off that all negotiations have been blocked... I don't like being held by the balls so to speak

I don't understand you. If he's sure he can get the price from another buyer, why should he negotiate?

In this circumstance, I don't think I'd want to lose out on a near-on £500k house for the sake of £5k, particularly considering the current stamp duty saving.

I think you need to take the emotion out of this. A house is worth what someone will pay for it. You seem angry at his asking price and that he doesn't want to negotiate. Just as you want to pay the least amount possible, he wants to obtain the highest amout possible. There is no reason for him to sell to you at the price you want to pay.

As the stamp duty holiday nears its end and most properties have already been snapped up, he could be in a very strong position to get his asking price due to high demand and a small supply of houses in the area he lives in.

@SomeSmotheringDreams yep, I think that summarises it all perfectly! I am annoyed about the negotiations because we gave valid reasons for the price to be dropped and doesn't everyone put their house on for higher than they want expecting negotiations? But as you say, in the current market, he just does have the upper hand and can afford to hold out for a higher offer but we can't afford to wait due to stamp duty.

@KatyandClover I think it's just that he sussed out our desperation and used it against us that is so annoying 😂 even though we tried to bluff and play it cool it is just annoying that he knew we would go to his price despite the valid reasons for why we wanted it dropped. We met our buyers in the middle so just frustrating we've done all the budging but I do know it's totally fair enough

We overpaid by 15kish on our house. It was on at offers over they were holding out for that amount because they needed it to fund their move and weren't budging.

Don't regret it for an instant.

Thanks @helloxhristmas we have definitely decided now not to lose it for such a small amount so that's good to hear you don't regret it :-)

As always on Mumsnet, a lot of homeowner are getting emotional by prospective buyers thinking offering anything less than asking price. Let me flip the coin and say that we are on the cliff edge of an economic recession with a gloomy Brexit in a middle of a pandemic. If the seller was so convinced he would sell for more to all these buyers apparently lining up, he would have moved on already. He/she has as much to lose as you do so don’t feel like 5k is not more quibble for you than it is for the seller.

Your principales are sound, i was in your position few months ago, i will never pay over the price and yes houses goes over because of silly buyers.
I lost a few, but i knew i will only need to get lucky once, my current house the agent asked for more based on offers on the table, i stuck to my offer(my maximum budget) i put put my case forward with nice word.
However, your comparison is wrong.
Your bargain hunter like me, but 5k for 500k house is nothing.
Asking price doesn't mean always is negotiable.
Sold recently almost 20% over asking price.
I had to give a hint to a buyer not to bid anymore, tipping him that they are in good position.
I genuinely was not happy with over price l started to get worried as the buyer was willing to go even higher.
Bottom line if you can afford it don't quible for 1%

You sound very emotional about it.

Prices can vary dramatically on a street. Just sold a family house for the same as the extended one over the road.

Reason - huge garden which is Soyth not North facing.
Decor is dated but it has a new-ish roof, new central heating system and good quality appliances (Miele) in the dated kitchen.

Interesting it sold for exactly what we the family (who watch the local market) thought it was worth.

And it sold to someone else who lives in the village (we don’t know them).

But 10% over surveyor valuation.
Surveyor didn’t appear to understand the vagaries of the area (garden variation or that the 4 beds elsewhere on the estate have one less reception room so about 18sqm floor space less on each floor).

This is why I get so annoyed with the house buying process.

You completely acknowledge that you've been playing games with him, calling his bluff etc. Plus, you're basing your whole approach on one house (albeit next door) which you have no idea (other than photos I presume) of the condition, what issues it had (not visible without a survey etc) and a reported sale price (which could actually mean that it was sold months ago).

You also accept that its the only decent house with the specification that you want on the market in the area at the moment and that these houses don't come on the market very often.

You also stand to make a substantial saving on stamp duty if you complete soon.

Yet, you're cheesed off because he won't accept the price you're willing to offer?!!!

It's all very well dismissing surveyor valuations as not understanding local area etc, however when it comes to remortgaging if prices have gone down then the loan to deposit ratio will change - so now isn't the time to dismiss surveyor caution. Trying to remortgage in 2-3 years the loan ratio may not be as favourable and won't be able to opt for the better deals.

The increase in prices is due to the stamp duty reduction. The surveyors are currently assessing on price can be expected after stamp duty holiday (see article above I linked to, or any other number of similar articles).

People will overpay something because of stamp duty holiday, which may be cheaper after stamp duty back on table - human nature or lemming behaviour, but is the way some people will behave.

@Fizzydrinks123 I agree you are right to be cautious but not everyone needs to (re)mortgage.

Seems a shame to miss out on a property you really like if you can afford it.

Pressed post too soon.

If you end up in a house you don’t like & end up moving down the line that will cost a lot more than 5k.

In that position myself. Lost out on the flat I really wanted as I couldn’t stretch further.

Now 4 yes on I can afford it but am having to pay the difference between the property values + legal fees + stamp duty.

The latter two are more than the initial price difference. It’s so frustrating.

You saving more than 5k in stamp duty
It s small %
Either you want it or you dont

@Embracelife

You saving more than 5k in stamp duty It s small % Either you want it or you dont

How do you know the seller hasn’t factor this 15£ in the asking price? Especially when OP mentioned a house was sold for 15k less few months ago. It’s a small % for the seller too, why is it for the buyer to fudge be default?

Once stamp duty ends, buyer may lose out on the 15k incentive but sellers will be also affected by the lack of buyers so who knows what net effect will be.

Very very unlikely you will make it before stamp holiday ends

The tipping point (because of Christmas and that conveyance solicitors so stretched and many not accepting new business was actually two week ago.

I am afraid OP... that ship has in all probability - already sailed

@Jroseforever why? We've got 4 months even if you take the whole of December out for Christmas. No chain either side.

Unfortunately this is the word amongst agents and conveyance solicitors. Really.

And that’s if you manage to secure a conveyance solicitor. Have you?

Many of them are drowning in work, from home.

Given you’ve not even offered
I would be gob smacked if secured stamp duty holiday

But all the best