How do you work out what to offer on a property

[shinybrass]

Any tips? How low can I go, a few properties in my area algae been on for a while and I can only think they're not worth what they're up for.

One I really like but has work needing doing to it, it looks like a probate and I was thinking of going in £100k under the asking price of £800k because I can't afford it at the asking price.
What's normal? I'd like to know because me and dh feel well out of our depth when it comes to working out what's a reasonable offer or what's ridiculously low and estate agents might not help us if we take the biscuit on offers. We have no chain of thats makes any difference, we will have a mortgage but nothing to sell.

Do you ever watch location location....they explain their offer theory a lot.
Look at what similar properties in the area have sold for, look at properties in the road's selling price, look at the amount of work needed on the property you are interested in (needed not wanted), look at how long it's been on the market (this could indicate they are more willing to compromise or alternatively they absolutely will not budge - hence that's why it hasn't sold), what's your position are you ready for a quick sale e.g cash buyer etc

Put all those factors together and it will inform your offer.

I agree with PP. You also need to decide what the maximum you can afford to go up to is taking into account legal fees and stamp duty. FWIW my parents accepted £45k below the asking price of £750k, it was on for about 5 months so I do think you have a bit of wriggle room.

Thanks. Yes I actually applied to go in location location but although they did enquire about me and dh, when we sent a photo in they declined us ha!
Perhaps I'm offering too low. It's a property that done up nicely would be worth more than the £800k so we would buy it if we could but saying that no one else is buying it.

The bank has decided what we can afford and we're trying to accept it's not going to buy the palace we dreamed off
I've set aside separate amounts fo SD solicitors and surgery's though.

Surveys not surgery's?!!

You have to look at comps rather than your budget. If the other properties do not support what the house is on for then you have a basis for a lower offer. But going more than 10% below asking and you'd better be in a fantastic position and they'd have to be fairly desperate.

How long it's on doesn't necessarily mean anything. They could be holding out for a higher offer or only be able to afford to sell at X price.

We were on 10 days before selling for £12k under asking (about 5%) because we had seen something. Our vendors weren't in a rush so accepted only 1% off. Their vendors were divorcing so the one who didn't want to leave the family home would not accept offers.

£100k (13%?) below asking is incredibly ambitious.

What if we are first time buyers with a mortgage in principle and are ready to go no chain and have solicitors ready (already have family ones) would this make a difference to an offer or is it just a case of give it a go and see.

Will estate agents help with what kind of an offer someone is willing to accept or not really? I know they're on commission but maybe on a property that's been on for a while.

You also need to do your research. It doesn't matter that it needs work if its been priced accordingly. If renovated comparables would go for more than £800k, then perhaps the sellers have already accounted for the works pricing it at £800k, and offering massively lower won't wash.

No-one can tell you what position the vendors are in and whether they'd entertain lower offers. I think they'd need to be on-their-knees-desperate to accept an offer £100k lower, and you risk really cheesing them off so they won't see you are serious buyers even if you subsequently increase, but you can only offer what you can afford.

What it’s worth to you and what it’s worth to the venders can be poles apart. It really depends on their individual thoughts and needs.

You can justify it any way you want, if they don’t want to sell for less than x figure they won’t.

So as others said look at what other properties similar are selling for in the location, and the relative conditions, then how much you can afford and offer.

How they will react is up to them. But I’d say 100 lower is very, very likely to be rejected. And you do run the risk they will see you as time wasters. But you never know. All you can do is make your offer ans see.

Also I’d say if for example your budget is 700 then viewing properties ar 800 is pointless. It’s just going to habe you wanting what you can’t afford snd lower priced ones won’t look as good. However you do have a tiny chance,

If someone was willing to accept 700 and was proper desperate then they drop the price and list it for that.

Again, you can try and you never know but prepare yourself for a no. I think 740-750 is a more realistic start point if you want to low ball them. But again, no guarantees they won’t see you as a pair of time wasters.

Thanks all, very helpful . I think I will stick to what we can afford our maximum would be £750 but that wouldn't leave much left over for renovations.
I'll get my head back out the clouds then!

Let us know how you get on with your offer, I think the market is blowing hot and cold at the moment depending on the property.

Not sure why the UK is the only place in Europe where people advertised the number of bedroom rather than the surface (square meters) but that confuses people on what to offer.

So let’s come back to the basic. Presumably you re in London or near with this budget, so I expect that some comparable transaction happened nearby in the last 12-24 months, work out how much they sold for per square meter, maybe apply a 30-50% discount for square meters in low ceiling/loft, and add extra on total price for au unusually large garden for instance or take some off for having a main road, you get the idea.

Second do the same for other houses currently on the market, check if the same price apply (say £5000/sqm), it ll be very obvious whether the house you re looking at is overpriced.

If you were to buy in Paris or Berlin, you ll have a detailed map on how much each district are worth per square meters making it easy and very transparent market. The idea here is to get a sense of value depending on the few areas you re looking at, you ll immediately spot the outliers that usually end up sitting on the market for a long time.

I second what @Paulina23 said.

If the square foot isn’t on the Rightmove ad try putting the postcode into the governments EPC website. The EPC will tell you the square foot and give you a very rough idea of property condition.

find-energy-certificate.digital.communities.gov.uk/find-a-certificate/search-by-postcode

If you’ve got local house prices to compare but they’re a bit old then use this calculator to find out what they would be worth now (remember to select your region!):

www.nationwide.co.uk/about/house-price-index/house-price-calculator

Good luck!

Sq m price is an excellent idea bad one I hadn't thought of. I do always check out the sq m if it's there but it isn't always.
Thanks for this.

The good news is we have now run our figures through all the banks and can actually go up to £800 if we need to so hopefully this expands our search a bit too.

@LemonadeFromLemons thanks for the epc lol was super helpful

@shinybrass good luck in your house hunting have you found anything good to offer on?

I think it’s worth a chat with the estate agents. You should be able to gauge whether the vendor is open to offers, and what their situation is. Sometimes they will tell you what offers were rejected previously.

@Didicat no nothing really to offer on which is a bit depressing. Am slightly obsessed with checking every morning though so fingers crossed I suppose.

Checking rightmove I meant to say

@shinybrass since we dropped the property we were going to buy last July, we have found one this month that we have offered on and been accepted. I understand that desperation of what happened to all the houses for sale???

A probate property in the area I want to buy in was originally listed at £999k, then reduced to £899k after 3 months. It sat on the market for a further 3 months before it went off the boards as having been sold.

I've recently seen that the sale price for this property as per the Land Registry was £760k! So things aren't always as they seem at face value, and if it does need work, and it's been on for a while, the vendors may be underestimating the amount it needs (buyers tend to overestimate this figure, unsurprisingly).

Rather than what you can afford, do your research throughly, then I'd offer what you genuinely think it's worth, and hope that is within your budget.