What would be a reasonable offer in this market?

[Greenfairydust]

I am looking at small 2 bed houses with a maximum budget of £280,000.

I have viewings lined-up for a few places that are listed £280,000-£275,000 after the New Year break and I have already seen one house that I think I might be interested in.

I am looking in a small & popular-ish coastal town but where the market is quite slow at the moment and houses are not shifting very quickly.

Sold my property recently and I have a mortgage in principle ready so I can move fairly quickly.

What would people realistically offer at the moment?

Also, would it be cheeky to view houses that are listed at £300,000 but have been on the market with no interest for a few months and make a lower offer to match my budget?

My requirements are really flexible (don't care about schools & house & garden can be small) & I don't mind something that needs updating so I have quite a few options in that town but a bit at a loss as to play it when it comes to offers.

Any advice most welcome!

You have literally nothing to lose, see properties of over £300k if you like and offer your budget, all they can do is say no.

Some people will have priced their houses above what they hope for to allow some negotiation room, a house is only worth what someone is willing to buy it for. X

Yes, view the more expensive houses, and never be afraid to bid a seller what you think their house is actually worth.

At the end of the day, you can only offer what you can afford, and they will only accept what they can afford to take. However, I would say you will stop getting taken seriously by Estate Agents if you consistently put in silly offers.

It’s all a game OP good luck

I’ve never actually bought in a market that seemed to be on the downwards turn but it definitely always seemed to be the norm to go in below asking price, particularly if something had been on the market a while. Every house I’ve bought (or sold) has been approx 5% below asking price.

Thank you everyone for the positive feedback so far!

It is interesting @Fleabigg to hear that 5% was something you commonly came across.

I thought I was being unreasonable to consider offering that (5% less) on houses listed for £280,000 - £270,000 but it sounds like maybe that could be appropriate.

Considering this I think I will up my search to looking at house that may be listed up to £290,000 so I can still make reasonable offers.

-10% is a very reasonable offer. In your position people should be biting your hand off.

@C4tastrophe Thank you for your comment!

Yes, I am hoping that not being in a chain now that will be in my favour.

I am cautious because I don't want to come across as a time waster by offering too low, but at the same time I want to get the best possible deal :).

Going in at -35% may get you that reputation, but -10 should be normal, and -15 if you can justify it.
Also remember that renovation costs have gone up, so any necessary updating ( like replacing a kitchen from the 90’s or a 20 year old boiler ) is likely to cost more than you may have anticipated.
Don’t fall for the ‘It’s priced accordingly’ nonsense, do the maths yourself.

I think it’s silly to suggest you can just knock a certain percentage off asking price on any house. We’ve just put our house back on the market for 7% less than we put it on for last August. (It sold immediately with 12 offers, all over asking, but later fell through). So the listing price in our case is already reflecting the downward turn in the market. I’ll be a bit naffed off if someone now offers 10% less again purely because they want 10% off asking.

Do your research, look at what the property is actually worth and go from there.

@Lenor Thank you for your comment.

But in a way I think what you are saying confirms what previous posters have said.

If I understand correctly, your house did not sell in August at the price you wanted and you had to put it back on the market at 7% less now. I imagine if you had considered an offer from someone in August at 5% less than the asking price you could have potentially sold it then and avoided a loss.

Also if you had 12 offers recently but the one you chose did not proceed it also shows that sometimes it is worth going with someone who might offer less but who has their finance in place and won't flake out.

I’ve just told you that every single offer was over asking price… there wasn’t an offer below asking price to accept.

The offer we accepted was from a cash buyer. It was also the highest offer, but the other 11 were all within 15k so no one went astronomically over.

The sale fell through because they asked for money off AND refused to exchange for another month for no reason. We were willing to
move on the price, despite nothing being wrong on the survey, if we could exchange but they weren’t prepared to do that and we weren’t prepared to wait longer after reducing the price so it fell through.

I’m not really sure what point you’re trying to
make… that my house is worth 17% less than it was in august because I’ve chosen to reduce by 7%?🙄

They also didn’t ask for money off until the day we were meant to be exchanging 😄so yes, really lovely people and the fault should certainly lie with myself for not accepting an offer below asking.

@lenor ''I’m not really sure what point you’re trying to
make… that my house is worth 17% less than it was in august because I’ve chosen to reduce by 7%''

Where did I say that?

I don't think you understood my post at all...

I am not suggesting you reduce your house by 17%, the point I was making is that considering a lower offer in August (like the 5% below asking that have been discussed on the thread) might have secured you a sale then and meant that you did not have to re-list with a reduction of 7% at a later date. That was my point.

The second point was that as you found out sometimes going with the highest offer is not always the best option if the buyer is in fact bluffing and does not have their finances in place.

I'm just about to list my property at £280,000.

If a cash or chain free buyer is interested then I'd accept £275,000. But my property is newly renovated, lovely area, and next door sold last month for £280,000 and mine is in better condition so I'm confident in the price.

5% less wouldn't be considered and I'd wonder how serious the buyer was, or if they were just taking a punt.

Offering isn't as simple as X amount less, it depends how long a house has been on the market, what position you're in, how desperate the seller is to sell, the condition of the house, etc.

The PP had no idea the buyer would mess them around, though.

Unfortunately there's no way of truly knowing how serious your buyer is until exchange, regardless of whether their offer was the highest or lowest. A lower offer doesn't guarantee completion.

Hindsight is wonderful!

I sold mine at the peak and even then had offers below the asking price (sold within two weeks for 5% over) so it is perfectly normal to disagree with the asking price and put in a lower offer. And I was never offended or upset - it's business.

I also have a family member who manages an estate agency group and the market is of course horrible at the moment. She tells me that offers of 10% less are typical, with room for negotiation. Venders don't want to be stuck with the house worth even less in six months and buyers don't want to overpay. Offering the asking price now doesn't make you 'not cheeky' or 'serious' it makes you a bit of a mug. They can only say no.

If you read a single one of the selling up threads in this forum you will see that there is no magical number that stops people from pulling out. People change their minds, circumstances change.

12 offers within 15k of eachother would suggest no one massively overpaid. For context, 15k is 4% of the house price.

It’s very very unusual in this market to get 12 offers. You can see from rightmove that most places are hanging around for months. One house being for some reason very desirable (even though it wasn’t in August), doesn’t mean the general guide that it’s fine to offer 5% under isn’t right.

I think Property Log would be useful to you as you can see house reductions on unsold houses there.

It does sting when the EA initially overprices and you have to reduce, then someone offers even less.

Our house is on the market for £300,000 at the moment. We're willing to accept £280,000. We priced it based on the estate agents recommendation. Around here most people are expecting offers below asking now the market has slowed.

Thank you everyone for all the really helpful advice and feedback.

So far I have mainly seen houses that definitely need a bit of work rather than places that have been renovated well already. I am also focusing on smaller properties that don't really appeal much to the family market (small garden & small second bedroom) but are still in decent location and have potential to make a lovely home.

There also seem to be a lot of buy to let landlords at the moment in the area who are off-loading their properties and these houses, although they were maintained to pass electricity/gas certificate requirements , have not really been done up and/or look a bit ''tired'' because they were tenanted.

So basically I am in no way thinking of viewing a perfectly renovated/kept house and expecting the sellers to know £20,000 off the price...There are good reasons why offers of 5%, or even 10% in some cases, would seem appropriate to me.

Take notice of the electrics. Particularly the number and location of sockets. I see a lot of both old and allegedly renovated places with very inadequate number of sockets.
Apparently rewires are relatively expensive nowadays.

We'll be upsizing in the next 12 months so we'll be putting our current house on the market for 240k as per our valuation. Will certainly not be getting offended or upset by any lower offers.

There's no harm in putting the offer in and no obligation on the seller to accept it.

We bought our house in 2017, it was listed for €165k (and had been previously listed for 180k) but we offered 140k and the seller came back saying they wouldn't considered anything less than 145k so that's what we offered and a week later they accepted.

It's not offensive to offer 10% under asking, certainly not in this sort of market. It's pretty standard unless it is a strong, seller's market like in 2020/21.
Sensible and realistic sellers will be expecting offers below asking price at present. Obviously, their individual circumstances will dictate what they accept.

I think you’ve misunderstood me.

I got 12 offers over asking price in August, so not ‘in this market’. This would suggest that the figure it was listed at was realistic and not over priced.

We have now listed with a 7% reduction on the August price, because we are keen to sell and want to reduce the chances of it sitting on the market. We recognise that there has been a big change in the market since August.

Someone offering 10% less that it’s current listed price again, just because they believe 10% is the golden figure would mean I was selling it for 17% less than it was marketed at in August.. and 21% lower than the offer I accepted. This is a far greater reduction than any of the media has predicted, especially at the current time and in the NW (where I am).

My point is that you need to do research into what houses are worth in your area, and what they were worth at peak in May-Aug and decide then what reduction to go with, if any. Not just take the listing price as an overestimation and automatically offer an arbitrary amount lower.