Would this be a cheeky / pointless offer?

[haveiahealthyheart]

There’s a house on the market where I live, it was added in June and the asking price was £250k.
I fell in love with the location and the pictures, it seems perfect for me, I even dreamed about it 😂 but my budget was set at 200k tops so it really was just that- a wistful dream!

Anyway it didn’t sell over the summer and today it’s been reduced to 230k. On a whim, I booked a viewing for next week.

I’ve been doing all the mortgage calculators and the absolute maximum I could offer would be 218k. There is no way I can go any higher as that would be borrowing at just under 5 times my salary.

Would it be totally cheeky and pointless to make an offer of 218 on a house that they first wanted 250 for? I do realise that I’m almost certainly going to miss out to a higher offer anyway, but a bit of me just really wants to try because I love it so much. I don’t want the estate agent to think I’m a piss-taker though as I will probably want to be viewing more houses listed by them in the near future.

What do you think?

You never know. They might want rid.

True story: when I bought my house six years ago, it had been on the market for nearly two years. They had an astronomical idea of what it was worth.

I offered them 30% below their asking price, and they accepted. I think they were just fed up with waiting.

Good luck!

This is enlightening. I've seen a house that I like (I'd need to sell my house) first, of course. Prospective house needs the existing bathroom replaced and a new bathroom put in. I wonder if the owners would accept an offer that is 10% below their asking price.

Food for thought.

@AlfonsoTheDinosaur

This is enlightening. I've seen a house that I like (I'd need to sell my house) first, of course. Prospective house needs the existing bathroom replaced and a new bathroom put in. I wonder if the owners would accept an offer that is 10% below their asking price.

Food for thought.

Houses are normally priced to take into account the work that’s needed, have you looked to see what similar properties in the area have sold for?

@AlfonsoTheDinosaur

This is enlightening. I've seen a house that I like (I'd need to sell my house) first, of course. Prospective house needs the existing bathroom replaced and a new bathroom put in. I wonder if the owners would accept an offer that is 10% below their asking price.

Food for thought.

You won’t know if you don’t ask. But as Alfonso says they have probably factored it in. Or might be taking the piss.

The thing is they may not see you as a serious buyer if they have priced it appropriately and you still offer 10% below that.

On zoopla you can find out what actual price properties sold for in your area.

All offers must be passed on by the EA, no matter how low. Too low and the EA will say so to their client when they pass the news along. Ours did. They usually say "it's a little low but..."

A 10% below offer will not likely elicit that from the EA. And when an EA thinks it's reasonable, they'll push for the seller to play ball.

Thanks for the advice, @Frazzled2207 and @Garriet. It's only in the contemplation stage right now. I need to give it some serious thought before I do anything else.

Despite my earlier advice I have never managed to successfully negotiate huge sums off a house purchase. I am always amazed when people manage to get 10- 20% off.

First time buyer we managed to get literally 1% off the value, but in hindsight the house was well priced anyway.

Second house was a much more drawn out process where the vendor had already reduced the initial asking price...in the end we managed to negotiate 3% off, but overall it was 8% off the initial listed price. Even getting our measly 3% reduction took about a week of negotiating and their agent was very much on our side. He even let slip that the vendor had no previous offers. In hindsight I think we paid the right amount as it is a long term house, but the in reality another 2% off would probably pay for the work that needs doing in the next couple of years.

I have found that vendors never really want to meet in the middle or counteroffer like classic negotiating...it is very much the buyer keeps increasing in tiny increments from a low offer until you hit a sweet spot for the vendor. Bloody exhausting process. When we listed our property we researched and priced it accordingly, we had 2 asking price offers within days.

Thanks for all the help and advice!
I offered £215,000, the vendor said no.
So I've now gone back and offered £218,500 as my very best offer. Waiting to see what he says.

I was excited until I pressed 'send' on the email but now I am in a turmoil about the wisdom of maxing out on what I can borrow, with interest rates and living costs certain to rise!

Trying not to panic. I can still pull out even if the offer is accepted. No money has gone anywhere yet. Deep breaths!

What's the worst case scenario if, in 5 years time when fixed term comes to an end, I can't afford the mortgage due to higher interest rates? I'm guessing it would just be a case of selling the house?

What is negative equity? Is it that I can't sell the house for as much as I paid for it, or that I can't sell the house for as much as remains on the mortgage? In 5 years when the fixed term is up I think my mortgage would have been brought down to around 175,000. So, am I right in thinking that as long as I could sell the house for £175,000 or more, I wouldn't be in negative equity? Is that how it works?

Yikes this is overwhelming...

Negative equity is when you owe more on the house than it’s worth.
Not a great situation obviously, but unless you have to default on the loan then you can ride it out. If it’s an issue, I’d want to know I’d be happy to stay in the house for a long time.

Interest rates are a concern but I think it’s very unlikely they will sky rocket. If they did an awful lot of people will be in deep shit.
Negative equity is where your house is worth less than the money you have left to pay. Is only a big issue if you want to sell as you wouldn’t get the money back that you originally paid. Again this is I think unlikely BUT if you like the house enough to stay out it’s fine as long as you can keep on paying the mortgage

You will want some kind of insurance in case you get ill and can’t work. More important than unemployment insurance imo.

Stay put

@haveiahealthyheart: to answer your affordability question, selling us not your only option. You could remortgage later/extend the term/switch to interest only. If things get bad in the UK, you won’t be the only one & the government won’t want us all homeless if our houses are repossessed. I don’t say this lightly: I’m a v cautious person but a generation of homeowner are used to low interest rates

Onto your offer: that’s what you can afford so you are not messing around

However, I’d ask more questions: did they have a sale agreees in June? Have previous buyers walked (eg due to survey?). June to Oct is a really long time for house to be on market so either something is wrong or it was v over priced

Btw OP - your nerves about affordability are completely normal- buying a house is a big commitment and none of us can see the future

Good luck, let us know how you get on.
I put in a very low offer on my dream house and it was accepted!
A lot depends on how keen the vendors are to sell. You’re in a good position as a first time buyer with no chain.