How low is too low when it comes to making an offer?

[Amtheyest17]

Hello,

Just wondering when making an offer how low is too low? I only ask as I thought it wasn’t really the done thing to go in any lower than a couple of grand in certain scenarios but my friend just said she had, had an offer £80k under asking.

Understand that quite often it won’t be accepted but at the moment there are no houses coming up within our budget but even going up £30k-£50k the market opens up a bit and these places have been sitting on the market for a while so wondering if it’s worth viewing and if we like something making an offer within our budget and within reason. There is one property that 100% is priced way too high and should be more in line with our budget - our offer would be £60k under asking if we liked it.

Conscious that although this would be allowed might not be a great thing to do and sellers might see it as insulting/wasting their time. Have also had a friend who lucked out with this approach as sellers were desperate to move to accepted £30k under asking.

It's really more of a percentage thing than arbitrary figures. £60k on and £800k house is very different to a £200k house.

It does also depend on the market where you are. Where I live the market is still pretty buoyant and people are getting 10% over asking.

5 to 10% under asking would be normal
So 80k under on an 800k house would be normal
80k under a 400k house might be seen as cheeky and make the seller think you are likely to be unreliable

But there are no rules

If they’ve been on the market a while you could try asking the agent first

“I’ve seen this property on right move and noticed it’s been on the market a while, what’s the history? Has it not had much interest or is the vendor holding our for a particular price? It’s appears to be what we are looking for but is listed for more than we wanted to spend - we don’t want to waste anyone’s time if there isn’t a deal to be done”

See what they say?

It frustrates me that people say it is "normal" to offer under. There are no rules. Everyone is different. Lots of people on here will say its a commercial transaction and don't get emotionally involved. That may or may not work if you have a seller who takes a more personal approach to their home. Just be up front. Do your research, say what you think the house is worth, set out your reasons and don't play games.

I’ve just bought a house for 18% off the reduced price, not sure what the original asking price was!

Can I join in please?

We are in the same boat, OP. I don't see many houses coming up.

We are about to view the house for the second time after half a year. It hasn't been sold yet.
The price has been reduced from 550 to 525. My partner wants to offer 475. I don't think this will be taken well. What would be realistic? Hard to determine

@Newusernameaug wow! Congrats? For how long has it been on the market? Any obvious faults or was it just the market?

Thanks all! For context the house I am thinking of is £625k and we would be offering around £565k. One recently went on the market in slightly worse condition but bigger sq ft for £575k but in a slightly better location - around five minutes closer to a station. Same style of house.

@Movinghousehelp love that approach! Will deffo give it a go

@MulberryDerry I think it depends what you think is fair taking everything in to account; location, how much work it needs etc on the surface I think £475k from £525k sounds cheeky but without knowing the details it’s hard to say! I always think you should offer what is fair and not just try and get money off for the sake of it. I keep trying to look at comparable properties and what they were on for and trying to find what they sold for using net prices so maybe try that? Also, if you put £475k on the table and someone came in at the same time and offered more and got it, how would you feel? Always best to put your best foot forward and just pay what it is worth to you!

Also no houses coming up is infuriating - literally one property every month in our current budget!!!

I'm also wondering the same OP, and think the local market conditions make a difference. Some areas things selling fairly well, an offer might be perceived as cheeky but not in others.

Where is everyone looking?

I'm in East Sussex and thinking 10% though can move quickly as no chain.

I'm in East Sussex and thinking 10% though can move quickly as no chain

I agree with @Africa2go above. You simply cannot apply blanket %off figures for all properties that are currently for sale.

Asking prices are arrived at by sellers and agents in different ways, with differing opinions, and varying expectations. Some properties would still be too expensive if you got 20% off the price, others would be a good deal if you paid 5% over. Every property should be assessed individually.

I agree with @Mildura

It really depends whether it's priced sensibly to start with bearing in mind condition, location, size and local market! If the price is market value compared to similar in the area recently sold they are unlikely to accept an offer under asking price as they won't need to, it will be sold at asking. If it's overpriced then of course make an offer. Some people deliberately price things higher than they expect to achieve to leave room for offers whereas some sellers don't bother with such games and simply advertise at a reasonable price that they expect to receive deliberately to avoid the drama of negotiations.

I've always priced properties I've sold fairly and if someone had made an offer 13% below asking as OP suggested I would have rejected it. But that was because I knew it was fairly priced in the first place and would sell at asking price.

If people make low offers just being cheeky when there are no issues with the house that support a lower valuation then yes it may get a seller's back up and they may refuse to sell to you at all, even if you increase the offer subsequently, because it gives the impression that you're someone who will try it on and be a nightmare to deal with through to completion.

Why didn't you offer on the one for £575k? If the other one is on for £625 the vendor might accept £610ish. I would not have thought lower than that but you can look on housepricessold to see what prices actually sold for in your area.

I’m watching quite a nice house. Has been on for 6 months, started out at 495, now 425, having gone SSTC at 440.
There are no rules.

I'd say 20% under asking price is a normal first offer and anything under that is too low.

I used to live in an estate where all of the houses were similar and built around the same time. Our neighbors across the street hadn't done anything to the house in the 30 years since it had been built. They never painted, never did anything to the garden, never redid the baths or kitchen, etc. When they put it on the market, they priced it as if it were pristine, full done up, etc. In a very hot real estate market, it sat there for a year and a half as they very, very slowly reduced the price. I used to see potential buyers go in, then come out five minutes later and drive off.

They probably got some offers that were way below their asking price. So make the best offer you can, and don't worry about how the seller feels about it. People who have wildly overpriced their houses are often not ready to face the reality of the market anytime soon. But there's no harm in trying.

@Playgrind East Sussex too. On the coast.

As above, I've always priced fairly. If someone had offered 20% under, I'd just see them as time wasters as they wouldn't have had any evidence to support such a low offer. I wouldn't have entertained any further offers from them either, as having been in a position previously where someone like that played games all the way through and tried to knock off quite a chunk on the day of exchange (thinking we'd accept for fear of losing our puchase), I'd just avoid like the plague.

YOU CANNOT APPLY BLANKET RULES!

In many areas if you offered 20% under asking you'd be laughed it!

Exactly this. It weeds out people who will not behave reasonably. I have only ever had someone make a stupid offer like that once, I think maybe 15% under asking, and the estate agent was even laughing when he called me to tell me but said obviously they are legally obliged to tell you all offers no matter how silly. I believe they did then try and come back with another offer maybe only 5% below asking price and were told I'd already sold the house at asking price by then - because it was priced realistically at what I knew it was worth so had no intention of selling it for any less - but even if they'd then offered more than the buyers I accepted I'd not have entertained it. Moving is hard enough work without having to deal with CFs!

Sorry you had such a horrible experience. I do believe people trying it on like that is always a good tell-tale sign of which potential buyers to avoid like the plague!

So you'd make an offer of £500k on a property priced at £625k like in OP's example, not because of an actual issue you'd identified with the house that legitimately justifies a lower valuation compared to similar properties but just to try it on? I'm afraid as @Mildura said, in the absence of an extremely good reason why the properly is suddenly worth 20% less than the owners and agents have estimated you'd be laughed at and probably the estate agent would not be keen to take you for further viewings of other properties. 20% is a huge discount to expect for no reason, why on Earth would someone sell to you at £125k below the market rate they've had the property valued at?

I wouldn't be offended on an offer of 475k on a house priced at 525k.

Obviously they will be hoping to get about 500k but still, it's not an insulting offer. If they won't accept it you could put the ball back in their court by asking what is the minimum amount they would accept. (if you can go a bit higher than 475k that is, if not then you have to just stick with that amount)

This - you have to know your own market but I agree that 20% under asking is not a normal first offer. It is an offer they are bound to reject and could be insulting as normal is more around the 10% mark in most areas.

It depends. First of all you need to be clear on if the house is overpriced (and why) or instead if you are too poor to afford it.

If you can't afford a £625k house stop looking at £625k houses. Look at the £560k houses you can afford. If there are no houses in your price bracket keep saving

Personally I'd find it offensive if I had a house that I valued as £x'm if someone offered £y'k just because that's all they could afford. When we were selling I told the EA to only allow people who could prove they could afford our list price through the door for that specific reason. It also focused the EA mind to give a true valuation instead of an inflated one.

I'm both instances we had above asking price offers opening weekend for flats in london

@MulberryDerry I would be very surprised in those vendors accepted an offer below £500k.

But as people have said, it really depends on their circumstances. How desperate they are to move (perhaps not hugely if hardly reduced their price while on market 6 months?), whether you can demonstrate from sales of similar properties in the area that it is overpriced (presumably it is if it's been on that long and they've had to reduce it. But how long ago was it reduced, and is the new price sensible or still too high?). I can't imagine a situation where I'd have ever accepted an offer with that level of discount, but then when selling I always priced my properties sensibly so.... different if they have not!

What can be odd is when people say things like "oh the kitchen needs redoing" or whatever and try to knock that off the price when the advertised price may already be lower to reflect that.

The only way you can get a sense of the sensible market price for a house really IMO is to compare it in size, location, work required to those nearby that have sold in the last couple of years and see how it compares on all of those factors. But this is what estate agents usually do while valuing it, before setting a price and marketing! I suppose in some of the cases where properties are overpriced it may be the sellers overruling the estate agent and insisting on marketing at a higher price? Or just useless estate agents who are clueless? 😆

When we were selling I told the EA to only allow people who could prove they could afford our list price through the door for that specific reason

This is such a good idea. I don't intend to ever move again if I can help it but wish I'd thought to do this when I did! Part of the issue may be people looking at things out of their price range and then assuming they can get them for less so a waste of time for all concerned if the advertised price is sensible to start with and not negotiable.