A lowball offer?

[Sandals12]

So been searching for a house since 2018 and watched the rise in prices. Own a ftb type house outright worth around 120( before sept). We have two small children so looking more space etc.
So was happy to ride this out in anticipation of price drops. However saw a house we liked. It's been on about 5 weeks. Prices and 285. Went to view on Friday. It has no offers as yet. We have a sizeable deposit but because of interest rates we would need to sell our house. ( we have large childcare costs over 1/4 of our combined incomes).

Do you think a low offer of below by 20percent is way off the mark? This is in anticipation of price drops plus I think i would be happy to sell my house 20percent below pre Sept prices. Apparently the vendors are in the process of buying another house.

So hard to know what to do. To put it in perspective 4 years ago this house would have been on market for about 170. I could see us living here long term. If only we had a crystal ball!

But it isn’t four years ago, so that isn’t relevant now. The vendors may not be interested as you aren’t proceedable buyers if your house isn’t on the market. You could try a low offer, but be prepared for a knock back. B

Bear in mind that you might not sell your own quickly, particularly at this time of year.

Low ball and not proceedable probably isn't attractive.
Put yours on the market and then put in an offer when yours is sold. I'd go with the same estate agent as the house you are hoping to buy is on with, and state you are only interested in selling for Xproperty. Make sure you aren't tied into the sale if your desired purchase goes under offer before you have sold.

20% below when you haven’t even marketed your house yet and they’ve just gone on the market? Probably not realistic, to the point where they may reject a sensible offer from you when you’re proceedable because they don’t trust you.

Personally I wouldn't except an offer from you as your own home isn't even on the market (which is very slow at the moment and things are taking months to sell). Get your house sold and if they are still not having any luck perhaps a offer 20% lower than the asking price might be OK for them at that point.

Before Sept when we were bidding we always stated we didn't have to sell before buying (as we have a 90000 deposit plus extra as a loan from parents if needed) however now with interest rates and a slow market plus stamp duty on second homes it's expensive not to sell first. @Quizzed of I sold however and they didn't accept then I just need to pull out of mine. I was thinking if only try and sell based on them considering low price. It's a catch 22. I was planning to sell very competitively priced. I have a lot to think about I think.
But at the end of the day I was happy to wait it out a year or so as I know I'm in a good position.

As I own the house outright I wonder could I release equity on it to fund a bigger deposit.

Doing the calculations with a 130000 deposit 90000 of our own plus 40000 gift over 20 years. We could actually proceed without selling. But that's based on a 17 percent reduction. If they are in a rush to secure their new home before a good mortgage offer runs out for example it may be tempting.

So I could put it across that at 230000 we are able to proceed without selling and leave it there. Tbh is be afraid to spend much more the way things are looking.

I think what you've said is fair enough - low ball offer on the basis that you can proceed without a mortgage and without selling. Only thing to factor in is that you'll have to pay a higher rate of stamp duty on the purchase but you can reclaim that once you've sold. We had a surprising low ball offer accepted (admittedly only 10% but much more than we were expecting based on our estimate of the value of the house) partly because we weren't selling and were able to exchange and complete within two months.

Doing the calculations with a 130000 deposit 90000 of our own plus 40000 gift over 20 years.

Do you have to pay back the gift? We had a gift & family had to sign legal forms that they would never expect the money back.

Of course you can do this, if you’re actually asking if they will accept. Likely not. But you’ve notthing to loose.

A low ball offer is more acceptable if your proceedable.

"But it isn’t four years ago, so that isn’t relevant now."

That is correct, but it is relevant, interest rates four years ago were at near zero historical lows, offering 170k now could see you losing money, unless you think the magic wage fairy is making up the difference (with cost of living increases I don`t)

@finallydones I would pay it back but yes she woukd sign to say that ok.

@mynameiscalypso yes we woukd have a mortgage as the 130000 is made up from the two sums. Ah yes aware of the second home stamp duty that can be claimed back later.

So tempting just to forget this one, get my house pictures taken etc ready to put on market and wait it out to see what happens with market. But the house is in a good position. A bungalow on a 0.5 acre plot but also with neighbours and beside desirable school. Although school near me currently is good too. Such a tough one.

I am selling one at the moment and would not entertain any offer that low, especially if you were not proceedable

Am currently considering one 3.5% below that I got on Friday and agent said they are seeing mostly offers of up to 5% under

I mean you can try it by all means - but I would be insulted and not sell to you!

You're asking someone to take £50k less than they're asking for - that £50k will almost certainly mean the difference between them getting the sort of house they want to move to next, or not.

It's all a bit theoretical anyway - we'd not consider an offer from someone unproceedable.

@jackstini thanks, it's good to hear about people who are in the process. I will have to suss things out this week. If I wasn't getting a reduction I would probably just leave it until such times as prices decrease naturally as I'm in no immediate rush to move. To add the estate agent did hint at offers around 250 but not sure if that was based on anything. That's 35 below asking!

LOL, and 80k more than they paid with a global recession just round the corner, I bet they are crossing everything that someone bites!

Yes but you’re way way below that at nearly 60 below asking. It’s huge.

@DeadHouseBounce I don't actually know what they paid as I can't find out easily. I was just saying four years ago it would've been worth about 170-180. Yeah if they have a house to buy they would be hoping to get a sale unless they dont mind pulling out. Four weeks in and they have no offers on the table. Not even low offers. Too much uncertainty for people atm.

There is a time limit for reclaiming the stamp duty- if you don't sell the previous one in time, you get no rebate. I think it was 18 months when we did it, not sure what it would be now. Just something to be aware of.

@BlueMongoose 3 years (I hope, or we've got a problem!) to reclaim stampduty.