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Original poster

Please advise on what offer to make?

26 replies

FlimFla · 19/01/2021 09:33

Hello - this is my situation.
I am interested in a house but cannot afford the asking price which is 400k.

The vendor has declined an offer from someone else because they are not proceedable. I don't know what offer they made.

However I am proceedable, being under offer myself to someone who doesn't need to sell. And I do not need to get a mortgage. So I think that puts me in a favourable position?

The house in question is not lived in, so the vendor doesn't need to find somewhere to move to - it has been rented out previously but is now refurbished and empty. Perhaps this means the vendor will just hang on for the highest price.

What would be a sensible offer for me to make on an asking price of 400k bearing in mind my proceedable position? I really hope my position makes me a favourable prospect, although of course anything could still go wrong! Any ideas welcome !

OP posts:
SollaSollew · 19/01/2021 09:40

If I was you I think it would depend on two things, what I could afford and how much I wanted it. If I was desperate for the house I would put in a one time offer of the maximum I had and be clear that there isn't any more. If I was less bothered I might start lower.

I'm not sure that's the most business savvy thing to do though!

StephenBelafonte · 19/01/2021 09:44

Standard is to offer 80% and then negotiate upwards and meet in the middle at 90%. Do you know how much they paid for it themselves?

Original poster
FlimFla · 19/01/2021 09:57

Yes they paid 270k according to my online research. This was obviously a while back!

OP posts:
Proudboomer · 19/01/2021 09:59

Is the asking price in keeping with what similar houses in the area have sold for in the last few months?
Is there anything special about this house which might attract a premium or anything that would reduce the value.
How is the market in the area? Buoyant with plenty of sold properties or do houses sit on the market for months?
There is no set formula for working out what to offer as it would vary widely between areas, type of property and the buyer and sellers own positions.
Unless the house is vastly over valued asking for a 20% reduction on a £400k house could well mean they think you are going to be time wasters. Look at what a comparable house in the area has sold at in the last couple of months and go in within a few % of that property

HerMammy · 19/01/2021 10:01

What is your limit? We can’t really advise without that.
I’d go in at £330, has it been on long?

Horseradish01 · 19/01/2021 10:11

Hard to properly advise, depends on how it compares to other houses in area and how long it’s been on for.
But on your info I’d go in at £360 and work your way up to £375 as final, unless you desperately want it and want to/can pay more.
Agree with pp starting 20% lower would irritate me as vendor. Would think you were time wasting and would have no confidence in you completing even if we agreed a higher price.

Original poster
FlimFla · 19/01/2021 10:12

There is nothing comparable that has sold recently. Next door went for 360 in 2016 though. Other houses have sold more recently for more but they have an extra bedroom, upstairs bathroom, and the gardens are "done."

There's nothing particularly that would attract a premium, and on the other hand, the only downside is It has a downstairs bathroom - big minus point for many! (not us).

Difficult to know what my limit is because don't know about stamp duty (probably won't be able to complete in time though).

OP posts:
Original poster
FlimFla · 19/01/2021 10:16

PS it has been on since December and was reduced this month.
Hard to say about market in this area - seems to be buoyant with lots of people viewing but there's not much in the market and I don't know what is being offered. I certainly accepted a below asking price offer on my own place (in same area) - it was the only offer after more than 20 viewings since October.

So an offer of 360 isn't too cheeky?

OP posts:
Ghostella · 19/01/2021 10:27

Honestly, the asking price is 400 and I wouldn’t offer much below unless for a specific reason (not just because you can’t afford the asking price).

Proudboomer · 19/01/2021 10:28

£360 would be 10% below so not that cheeky. They must be quite keen to sell if it only went on in December and they have already reduced the price.
Worth a try and stress what a good position you are in with the chain only being your buyer, you and them and even if they refuse they might indicate the lowest they will accept so you will know if it is worth pursuing.

GU24Mum · 19/01/2021 10:28

It's not relevant what the buyers paid as any increase/decrease is always partly market forces as well as any improvement (or the reverse!) during their ownership.

Work out what you think the house is worth (ie what they are likely to be able to get someone else to pay for it). That might be £400, it might be £395 or much lower. Then work out what your max offer is. I'd usually go in at below what I think it's worth but not so much below that that you set off on the wrong foot. But without knowing the market, we don't know whether it's priced realistically or with lots of hope value.

Depending on the market, If you can afford, say, £395 but think it's only worth £390, offer under that and look to agree the figure which is right for the house.

If you think it's worth £395 but you can only offer £390 with no wriggle room, offer below and hope to negotiate to no more than your max.

If you think it's worth £395 but you can only offer £378 then you're probably best off being up front, saying that you aren't going to mess around with offers, you know it's a bit less but you are good buyers because of X and Y and that £378 is your offer and you can't go higher.

Londongent · 19/01/2021 10:52

If it is priced accurately, and I was the vendor I would dismiss 360 out of hand and would be wary of you as a buyer. 375 would seem a more serious offer but expect to pay more. How much do you think it's worth, and what is your max budget?

lastqueenofscotland · 19/01/2021 11:02

A house isn’t worth just what you can afford. If that was the way it worked I’d not be living in a small 2 bed semi!
I don’t think with the backlog that you will make the stamp duty deadline, so factor in SDLT to your budget, what does that leave you with?

Africa2go · 19/01/2021 11:05

I think if someone offered me 20% less than asking price as a pp has suggested, I'd reject it out of hand and tell the estate agents I didn't want to deal with those buyers - at all - whatever they came back with. It would just be a waste of everyone's time and I'd think they were game-playing and would wait until they had you over a barrel a couple of days before exchange and they'd make a ridiculous reduction / threaten to pull out.

Even at 10%, I'd be irritated, and think its cheeky, given that next door achieved that 5 yrs ago and prices are likely to have increased. I think as above, £375-£380k would be more realistic depending on market / what you think its worth.

bluubear · 19/01/2021 11:09

I'd go for £370k minimum if I'm honest otherwise I do think it looks cheeky. What can you afford?

Mildura · 19/01/2021 11:16

Standard is to offer 80%

I think that's an 'interesting' strategy!!

Asking prices are NOT a statement of value.

One of the best purchases I have made I paid over asking price.

FAQs · 19/01/2021 11:20

What was the original asking price.

crazylikechocolate · 19/01/2021 11:45

I don't know what area you are in so that limits me being able to answer but here in the southeast most property is selling above the guide price , it's difficult in so much as we are in lock down and viewing is very limited but not a lot is coming onto the market and property that has been about for a while is now being snapped up

Original poster
FlimFla · 19/01/2021 11:48

No way of finding out original asking price. I suppose I could ask agent?

Interesting that PPs would refuse to deal further with anyone making really low offers. Our buyer did, initially, offer rather low, and I'm glad we didn't tell them to get lost. Also, if we had been in a different situation we may well have accepted the first "cheeky" offer.

OP posts:
Bluntness100 · 19/01/2021 11:51

Shaking my head at the standard is eighty percent. What a silly post.

Op, work out the max you can afford. Assume you will pay stamp duty. Offer that.

No one can predict what they will do. They may be desperate and say yes. They may say no and be unable or unwilling to sell for much below asking. You need to go in and offer and see what they say.

Starseeking · 19/01/2021 11:52

Assume SDLT will be included in your total costs, as starting now it's unlikely you'll make the deadline.

Calculate the amount of SDLT payable on the property, and deduct that from the money you have available.

E.g. let's say you have £400,000 in total available.

Without the holiday, SDLT rates are as follows:

Up to £125,000 = 0%
£125,001 - £250,000 = 2%
£250,001 - £675,000 = 5%

If the property price is £400,000, SDLT will be:
First £125,000 = 0
£125,001 - £250,000 = £2,500
£250,001 - £400,000 = £7,500

Total SDLT = £2,500 + £7,500 = £10,000

If you've already factored in solicitors fees and moving costs, this means you can afford to pay £390,000.

You can use the SDLT calculator on gov.uk to work it all out:
www.gov.uk/stamp-duty-land-tax/residential-property-rates

How much money do you actually have available?

ComtesseDeSpair · 19/01/2021 12:23

I think 10% under is a reasonable place to start, though expect to negotiate upwards a bit. If £360k is the absolute maximum you can afford then unfortunately I don’t think this is the house for you - unless you go straight in at £360k and say that it’s as much as you can afford so won’t be able to respond to any counter offer and aren’t playing a game. They can only say no and refuse to deal with you as some posters claim they’d do - which wouldn’t be a problem for you as you can’t afford to be dealt with anyway!

Original poster
FlimFla · 19/01/2021 13:23

@Starseeking thank you very much for taking the time to post that information.
The question of how much I can afford - well it's complicated in a way because the proceeds of my current sale are going to be split between two properties, and how much the other property will be bought for has some bearing on how much I can afford for the one this thread is about. NB - haven't found said other property yet.

OP posts:
Starseeking · 19/01/2021 14:22

@FlimFla No worries Smile

I'm slightly confused as to how you know you can't afford this property, if you don't know how much you have available to you.

In any case, if the house is in good condition, and you've checked the local market and £400k is in line with comparable properties, I suspect you'll you're going to need to offer at least £380-390k to appear to be a serious buyer. If you don't think you can afford to offer at least that, this property is probably outside your budget.

Bluntness100 · 19/01/2021 14:29

If you don’t know how much you can spend I am unsure how you can make an offer?

What is the min you will have? Do you know that?

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