10% under asking

[Vespa89]

We're chain free buyers, just offered 10% under asking price on a property that's been on sale for 2 and a half months. Was basically laughed at by the vendor, and estate agent informed me that most offers in the current market are 2-3% under asking price.

Are we deluded or are they?! 😃🙈

They can wait for a price they want. Don’t think it’s a case of being deluded. They want one thing you want another. Standard house selling issues !!

It happened to me last year with two properties ,they laughed, we bought somewhere else, three months later they both contacted us to ask if we’re still interested as they’ll accept the offer , too late .
Unless you absolutely want/love the house raise your offer , otherwise stick to your guns, I hate people that are either badly advised by the estate agents or they’re so cocky they feel the need to laugh at offers, if they had any common sense they should have counteroffer not being d..s

We got an offer of £290,000 with an asking price of £300,000. We were on the market for about 7 or 8 weeks (lost count over Christmas). I think it depends on whether they've found a property they really want. If they haven't, they have time to hope for more. 2 1/2 months isn't long in this market.

If you are not In A hurry to buy say that’s fine the offer is on the table if you change your minds let us know.

You should offer what it's worth to you.
The vendor will accept it if it's more than the place is worth to them, and no-one else has offered even more. If those conditions aren't met ... move on. Don't obsess about it.

Depends very much on the local market where you are buying. These threads are a bit ridiculous because it is so area dependent. In some areas it would be perfectly reasonable to offer 10% below and have a realistic chance of getting the property but we don’t know the situation in your local market.
Of you want the house, leave your offer on the table for a couple of weeks and see if they come back to you. If they don’t you could consider raising your offer to 5% below asking. Of course you run the small risk they will sell to someone else in that time but I would expect a good estate agent to get back to you if they get a higher offer from someone else, to see if you will beat it.

You can't say who is deluded without knowing whether or not the asking price is reasonable for the current market. What's it like compared with similar properties locally?

If it's been on for 2.5 months that would indicate that it's not underpriced and could well be overpriced.

Either someone else will come along, offer a higher price, that will be agreed by the surveyor if they need a mortgage, and the property will sell.

Or it could sit there for months not selling or they could be forced to reduce the price if they need to sell and your offer could end up looking quite good. Only time will tell.

Years ago we offered £10k under asking which was still probably £5/10k too much but it was a nice house and it was refused. That house took a year to sell, and sold for exactly what we'd offered, which wasn't a surprise as it was at the £120k stamp duty threshold and almost no houses sold for their asking price of £130k unless they were significantly better than a £120k house because it instantly added £1300 in stamp duty, which was a huge amount for properties that generally sold to FTB who were usually at the limit with fees, deposit, income multipliers etc.

I think the market may be a bit more competitive than that. If the house is in good order, the vendors obviously believe it is worth more. Leave your offer on the table, but look elsewhere. They may come back to you and try to negotiate upwards.

I offered £480k for a house listed at £575k but that was after it had been on the market for 18 months, and had an end-of-life roof, desperately old kitchen and single glazed windows.

The vendors negotiated and I eventually bought at £490k. It cost £100k to bring the house up to scratch so in the end it was a reasonable price.

Unless you spoke direct to the vendor - how do you know "Was basically laughed at by the vendor,"? They may just have declined - for a host if reasons depending on the house, the market, and their personal situation.

I’ve just received any offer of 3% over asking price for my house and it’s been on the market for under 2 weeks. However, I did put it on the market for 10% lees than similar houses last summer.

If it’s been on for 2.5 months I would suggest it’s over priced and/or they are not super motivated to sell.

Also depends on how they priced the house initially. The house we're buying right now was priced extremely competitively because they need to move quickly. We still offered a little below and met in the middle.

I think you had a lucky escape...

An agent or a seller who think it is appropriate to ''laugh' at an offer is not the type of people you want to do business with.

They probably would have messed you around at a later date (changed their mind about selling, accept another offer after you had already spend money on survey/searches...) even if you had upped your offer a bit to match their requirements.

If it has been on the market for almost 3 months, it is overpriced. You can bet that in a couple of months it will show as reduced on Rightmove.

I honestly never understood the "10% under is the norm" mentality (prior to the boom obvs). Always thought it ridiculous to assume every house was priced at least 5% over what it was worth so you offered loads under, they came back with a slightly higher offer than yours, then both parties felt they'd won. Such tiresome game playing.

Also percentage differs massively depending on price bracket.

I've noticed a lot of houses near me are much more realistically priced lately. So many were constantly being reduced and then just being taken off the market. You just need to know how it's priced compared to similar houses that have actually sold very recently. Ignore current prices of houses that haven't sold, or did sell but 6 months ago.

Wait a month or two and they will call you. At which point you can call them deluded and offer 20% below.

I think the problem your vendors have now is that people have got used to things going to best and final after twenty minutes. So now if something sits around for a couple of months, everyone assumes it's built on top of a sinkhole or something. The new reality is going to take a bit of time to get used to, but def stick at 10% in the meantime.

Thanks everyone! It's a village where not much comes on sale so hard to find something similar that's sold recently. Happy to up our offer a bit, but probably not enough for the vendor if they're holding out for something very close to asking.

Hmmm so unless there's a reason they need to sell quickly, the ball is firmly in their court then really if there's not much on the market.

Definitely offer up to a price you wouldn't/couldn't pay then. You've then done your best. Don't lose sleep over whether they're being unreasonable.

Hard to say. It depends how it's priced relative to other properties to some extent and who the potential buyers are in your area.
If it's still for sale after 2.5 months then it's probably over priced. The market has been falling for a good 6 months and is continuing to do so. Personally, I think it will come down a lot more. I think there is a huge stand off between buyers and sellers at present. Some sellers and agents seem to be wedded to peak prices in 2021/ early 2022 and don't want to accept that things have changed. Imo, it's the sellers that will buckle as the buyers simply can't afford the prices following the hike in interest rates especially combined with other economic factors. Obviously, I'm not talking about every individual seller or buyer but en masse. I also think it's likely that there will be more properties coming onto the market in Spring which would be in buyer's favour.

If you really want this particular property and would be happy to pay a bit more, you could increase your offer, bearing in mind that its value is likely to fall, at least in the short term.
If you are in a reasonably comfortable and affordable situation now, I would say that your offer will stay on the table for 2 weeks, leaving the ball in their court. If you wait another 6 months, you are likely to get more for your money.

There's your answer - a village where not much comes up. Sooner or later someone will pay over the (current) odds because they want/need to live in the village or they'll decide the village overall will bounce back so if they are buying long term they'll still be ok.

I guess the crux of the question is how important is it for you to be in that village or to move before another village property comes up?

'I guess the crux of the question is how important is it for you to be in that village or to move before another village property comes up?'

Yes vs whether you are getting a good price in the current, falling market, which is likely to decline (much) further.

I honestly never understood the "10% under is the norm" mentality (prior to the boom obvs). Always thought it ridiculous to assume every house was priced at least 5% over what it was worth so you offered loads under, they came back with a slightly higher offer than yours, then both parties felt they'd won. Such tiresome game playing.
Also percentage differs massively depending on price bracket.

This.

Why did you offer 10% - just plucked a figure out of the air?

If a house is on at £200k, a vendor might be willing to take a hit if they've priced optimistically and accept 10% under, so £180k.

If a house is on at £800k, very little chance (unless £800k was waaaay over priced) that a vendor is going to drop 10%, so £720k.

Do your research, think what its worth to you and stop game playing!

I've found the opposite is true it's easier to negotiate larger amounts off more expensive properties as the vendors usually have more cash and equity to cushion that.

This might be helpful to you @Vespa89