Cheeky offer?

[vinoandbrie]

We like a house that is on for o/o £1.5M. It’s been on for four months and has had no offers on it according to the estate agent.

What would you put in as your starting bid, and what would you expect to ultimately pay for the house?

I’d like to start with an offer of £1.3, but would that be too cheeky?

Could you start with 13.5m just as that's 10% which I think is reasonable. Good luck

@vinoandbrie i’d start lower than the price you actually want to pay so 1.275 and work up to 1.3. Or just offer 1.3 and not budge. Definitely don’t take @ManicMonday007 ‘s advice and over offer tenfold 😂

Really, you don’t think 1.275 would annoy them too much? Interesting thank you. I’m so worried about not giving offence I’m finding it difficult to be rational!

I definitely would’t go under 1.3M that would be pointless.
They are at the point where their agent will be suggesting they drop the price by at least 50k to 1.450M so they will be starting to accept that they probably won’t get more than 1.4M.
I think 1.3M as as a starting offer is just about ok but no lower. When they reject it (which they will) the agent should ask them to give a counter offer so the negotiations can begin. But they may just respond with 1.3 being far too low at which point I would offer 1.35M (if you think it’s worth that) and say you are leaving that offer on the table.

I renovate houses so buy and sell a lot. As tricky as it is, try and take the emotion out of it, it is just a business transaction and that’s why you use an EA to negotiate. It might be that it is priced incorrectly/hopefully but Providing you’ve seen it and can demonstrate you are in a great position and reasons why you are offering what you offer you don’t need to feel ‘cheeky’. You might get all the way with an offer of £1.5m only to find the surveyor doesn’t agree with the valuation either. The only instance in which it might be tricky is a divorce so establish why they are selling.

As an example, I just bought a house for £430k that was up for £475k. Needs a full Reno, not been touched for 50+ years, fabric wiring, gas lamps (!) the works. EA adamant they wanted £475k, but I knew no surveyor would value it at that so just left the cash bid on the table and even after they accepted a bid of £450k I wished them well but to let me know if anything changed, and it did. I’m guessing the surveyor didn’t agree with £450k either. Despite an owner wanting to price a house at what they feel it should be, the acid test is getting a surveyor to agree. If your gut says knowing the market it’s worth £1.3m then stick to your guns. Good luck!

@Twiglets1 I don’t think it’s pointless, it’s about giving the EA and vendor somewhere to go in the negotiations which does help sometimes. I’m happy to just keep saying no, but not everyone feels comfortable doing that. £1.275 may draw out what they actually want for the house. You can always go up but not down (without finding JKW/subsidence or a flying freehold/whatever). There is no bidding war and the OP appears to be in a one horse race so she has nothing to lose at this point IMO.

That'd be a massive reduction. What would you be happy to pay for the house? If they wanted £1.3m for it they'd have listed it for that.

Well that’s your view and I’ve given mine. I’ve also bought and sold lots of properties including my father’s recently that was on at 1.325M. We would have been insulted by any offer not close to 1.2M.
I think if the OP offers 1.3M that is still £200,000 under the asking price so highly unlikely to be accepted after just 4 months.
This amount of time to sell is unusual on a house on at 1.5M as fewer people can afford it compared to houses on at about 500k.

Exactly. They would try re listing it at 1.45M or 1.4M before accepting 1.3M or less at this stage.
Having said that, I do think an offer of 1.3M is an acceptable point to begin negotiations.

@Twiglets1 we’ll agree to disagree but I wouldn’t be insulted by an offer unless it was from someone who’d never visited the property or was trying to take advantage of someone else’s misfortune (hence my comment about establishing if this is a divorce, Ditto bankruptcy). I’d find that distasteful. If the OP is happy to pay more than £1.3 then £1.3 should be her opening gambit, if she ultimately wants to pay £1.3 then offering her best bid from the outset is a risky strategy. Obviously the vendor may just say no to anything under £1.5 anyway…

I work on the premise that a house is worth what someone will pay. Whether a seller wants to accept that is another thing but if they're short on offers....

If it's been on for ages there's no harm in asking. I'd low ball because they'll come back with a higher offer

If you’re short on offers after 4 months you reduce your asking price first before accepting the first offer you get that is 200k (or more) under the asking price.

I think they probably do need to reduce their expectations & getting an offer of 1.3M will help them to understand that. It doesn’t mean they will be ready to accept 1.3M after only 4 months however. That is why I think OP should offer 1.3M with a view to maybe increasing to 1.350 if they think it’s worth it and then leaving the offer on the table for the vendors to reflect on.
To offer under 1.3 is needlessly antagonist, in my opinion anyway. If they were prepared to accept closer to 1.250M they could offer the house at that price point on Rightmove (OIEO 1.250M) and no doubt generate a lot more interest.

Thank you for all your thoughts. I think we’ll go in at £1.3, and (hopefully) negotiate from there…

@vinoandbrie What did you offer in the end and how did the negotiations go?

Well, we went in at £1.3, then upped it to £1.4, they refused and took it off the market (in a sulk) and it has not come back onto the market since.

I think they were silly as these were the heady days of post-Covid and very low interest rates. I don’t think they’d get £1.5 even now, and of course inflation has done a number on us all since then!

We ended up getting a very good price for our home and bought somewhere we are all happy with and feel settled. Yesterday was the second anniversary of our move!

Thanks for the update @vinoandbrie I always find them interesting.

I think 1.4M was a good offer … I guess they just weren’t that committed to selling it. Glad you found somewhere else anyway & are settled there.

Thanks for the update! I'm looking at houses now which have been on the market for a while and am wondering about offering lower price so always interesting to hear what happened for other people in their negotiations

We offered £1.4 on a very quirky house that was on for £1.5 for a long time and had no offers or much interest. The little lady never even got back to us, and kept lowering by 25k every few months and eventually took it off the market. oh well never mind. We got a slightly smaller house for 1.3 in a much better location and love it so much 🤝

People often assume if a house is on the market a long time they are doing the seller a 'favor' taking it off their hands and offering so they offer crazy amounts like 20% under asking.

Truth is if a house is on for a long time especially with no or only a small % drop in asking price the sellers don't need to move and want a very specific amount... they are very unlikely to accept much less.

There are houses round here that have been up for years, they are overpriced but thats what the seller wants. They don't need to move so they will just stay at that price indefinitely thinking some day someone might offer what they want.

Houses that sellers are motivated to sell usually sell quickly for a reason, houses that sit overpriced and no movement do so because theres no motivation/need to sell.

It is also knowing the market though. Up here in the deer northern villages high price houses (so here £75k average house price although houses up to £200k are still within range, anything over £300k though is usually is deemed 'high' and pricing itself out) start struggling to sell even if they are worth it.

Theres a 1.5 million pound farm with luxury stables etc... for sale here, lovely house been for sale forever because no one round here has that kind of money. Would they accept 1.3 million if a millionaire came along, maybe because its so rare here.