Stupidly low offer

[Indablungerlow]

Selling house. Only been on the market a week or so. Received an offer of 50 - yes 50k below asking price. Really pissed off someone could be that cheeky. Anyone else received cheeky offers lately?

I have bought 2 houses and sold 1 so my knowledge is not extensive, however, both properties were / are in hot markets.

My BIL works in strategy for property e.g. a company wants to invest £10 billion in UK property, they come to his company to get advice and direction. Because of this he has to know about macro & micro markets, infrastructure etc. Fascinating and interesting job

When we bought this place (remember hot market) - our hopefully forever home - we asked him advice about offers and what to accept. He was really clear, anything that is 8% or less to the asking price and they are a good proceedable position should be looked at very seriously.

£700k - 8% = £644k.

He said for a long term investment 8% is nothing over 20 years and it's important that we get the property we want and get to exchange quickly so that people are locked in.

I've always offered 5% - 8% under, and for the house I'm currently in we met in the middle. The other two offers were snapped up straight away.

We paid slightly more than we'd have liked for this house, but this is a long term home for us. We'll be here for a decade or more, maybe 20-30yrs, and in that context it was more important to get the right location than to quibble about £10k here or there. And it was the right choice - we're very happy here.

Well I have experience of buying and selling in Bristol in the last 5 years and am about to sell there again (not a property developer or anything , just circumstances).

The very desirable properties there generally get an asking price offer within 3-4 days tops (yep, days!). If in a week you’ve only had 1 offer for 50k less, it’s unlikely you’ll achieve your asking price, and once properties hang about on the market for over a few weeks people start to walk away from them assuming there’s something wrong.

My personal modus operandi has been to get as good photos as you can, price realistically (ie slightly less than the EA recommends), and make the property as clean and clutter-free for every viewing. Will see how that one goes next month…

This is something I warn people about when they claim it's always worth chancing it by putting in a really low offer. If it really pisses off the vendor, they may well refuse to sell it to you even if you up your offer and would be happy to buy at that higher price.

A vendor that takes such huge offence at an offer 7.2% under asking is not a vendor I'd want to deal with anyway 🤷‍♀️ It's not a "really low offer"

Well it's offensive if you think someone's taking the piss and trying to lowball you, to be fair.

Someone who thinks that 7% under in a falling market is "lowballing" (it really isn't) is clearly going to be an absolute pain in the arse to deal with as a vendor.

Honestly, anyone who thinks 7% under a valuation that was made in August (before the mini budget, before the rate rises, before the recession started) is an offensive offer right now is clearly not the sharpest tool in the box.

I'm a homeowner and have bought/sold houses before - it's a business transaction and is affected by economic conditions. Some people struggle to accept that though.

It is lowballing if the house is on at a fair price...

A "fair price" isn't a fixed objective value. It's will fluctuate with the market because a property is only worth what someone is willing and able to pay in cold hard cash.

The OP had her house valued in August. What has happened since then that has affected the housing market? Why do you think her original buyers fell through?

Affordability has plummeted, as has confidence - both of those will drive prices down.

Doesn't seem cheeky to me.

The reductions are already starting to come through in the monthly stats, but even just anecdotally I can tell you that houses in the areas I follow that would have sold in hours/days a year ago are now sitting on the market for weeks if not longer. Things have shifted significantly.

The idea that houses have an objective "fair price" which only ever goes upwards is a complete fantasy.

But it almost certainly isn't a realistic price as loads of people on this discussion have posted. In August, prices were higher and market confidence was better. Then came along Liz Truss and puff, market confidence gone.

But estate agents and sellers aren't catching up and are still trying to get too much money for places. Plus it's pre-Christmas and nobody's really interested at this time of year. A house in my road has been on the market for several weeks now. It's on for £750K and I wouldn't pay more than £650 for it!

DH is selling MIL's house currently, they had an offer almost immediately but post Truss had to agree a reduction of £25K. DH said if they try to reduce the price again eg on the eve of exchange he would refuse but I think it wouldn't be unreasonable for them to drop it by another £15K or so. And then you'd have to put it on the market again.

In these situations it depends how much you want to sell.

And how much the buyer wants to buy. Some people get emotionally involved and want a house at any price, but I don't.

To be fair (begrudgingly) to Liz Truss, interest rates would have needed to rise anyway to counter inflation and currency risks, and the housing market was already clearly at the peak phase of the cycle/bubble. She just hastened the inevitable...

I dont think it is cheeky at all in this market.

We got a house originally on for 1.35m for 1.1m. People want buyers, especially if they have prior mortgage offers at good rates which were due to expire.

That's entirely subjective. This seller appears to think that what she was able to achieve in August is still 'fair price'. Lots of people are saying that it isn't.
To offer 7% below asking price is pretty standard particularly in a slow or falling market. Buyers will offer what the house is worth to them. They may regret it if the sellers choose to be offended and won't negotiate at all. Equally, the seller may regret declining the offer in a falling market as we have now.

How many offers have you had OP in past 2 weeks. If this is the only one, you will need to patient or be more open to negotiation.

If money isn't an issue, might be worth considering what it's worth to you to delay.

I think it's a reasonable offer. You could negotiate up.

It depends how much you want to sell. Prices are being reduced all the time so you may not get your asking price.

It’s not just the house price though. Most people need a mortgage which is affected by interest rates.

its just a business deal. no need to be so emotionally invested in it

An asking price for a property is not a reflection of its value. It is little more than an indication of the greed of the owner and/or the optimism of the estate agent.

If an asking price is set 20% above the market rate achieving an 8% reduction is hardly a good deal.

As asking prices are arrived out in different ways, with differing motivations and objectives, basing an offer strategy on achieving a certain % of the asking is not necessarily wise.

However, perhaps as an investment strategy when buying 100s of properties at a time it averages out...?

its just a business deal. no need to be so emotionally invested in it

Presumably you've never made a house a home or moved your family for a better life

Can't see the prob really , if you only own one house and are buying one house just offer the proportional amount less for next house , the only ones who gain are the banks for lending more money ,
a house is only worth what someone is willing to pay , not what some price tag has been attached to it ....

What rubbish. Of course we've all made a house a home. But selling and buying houses is basically buying the bricks and mortar of it. Of course it's emotionally draining, but people buying your house are doing a business deal with you.

@CorporateBull that doesn't mean OP isn't allowed to be offended by someone essentially telling her that her home is work £50,000 less than she thinks it is.