How much to offer on a 750k house

[whatafineday]

The property was first listed six months ago then got taken off from RM by the agent, and reposted as new listing with a lower asking of 750k this month. We did the viewing after the price reduction. It checks most of our boxes. Though inside and outside do require some work. It's been a rental so not in the best condition. But since we have been looking for more than half a year and do have a deadline, need to move before the school term, we are keen to make an offer. But unsure of where to start.

How much can you trust valuation estimates from websites like on the move? It has it down at 700k.

Recent transactions are either much bigger houses or smaller flats. One similar one has gone under offer but the agent refused to say at what price. and because of this, we worry that there could be competition looking for similar properties.

Do you think 700k is a good start or we will be dismissed? Part of me wants to try 680, 10% below asking. But anything under 7 could risk offending the seller. We are a cash buyer. Do feel that we are at a strong position in this market. But do not want to over pay. The agent has hinted that he has at least 5 viewings scheduled for the weekend....and he said no interest earlier due to tenant being there and not supporting viewing. Now no more tenancy so presumably more interest. This is making me anxious!

When did it last sell? If last 5-10 years, work out what they’ve done to it, offer accordingly.

Last sold price * local market change since then + improvements

eg. If they bought it in 2015 for £500k, have done single story extension but not much else, and the market locally has approx increased 25% = 500 x 1.25 + 50 = 675.

I firstly try and figure out if that calculation is anywhere near the asking price. If it’s a mile off, then I’d probably avoid entirely as they are CF.

I would personally offer what you feel comfortable with - it is so easy to get swept up and end up offering too much due to the fear and pressure in the moment.

With my current house we under offered by £75k as looking at other sold prices nearby etc we just could not justify anything closer to asking price and knew it would leave a bad taste if we had.

The sellers rejected the offer and the estate agents were not thrilled by the offer. We accepted this and kept looking, a bit sad as we loved the house but decided to hold strong as we genuinely believed it was not worth more than we offered.

5 weeks later they called us back to ask if the offer was still valid and if we were still interest - we ended up getting the house.

So may not always pay off but just wanted to share with you.

Good luck - I know how stressful it is, hoping you get something soon!

If they have already lowered the price, I cannot see them wanting a lower offer again. Price guides online are not always correct as the longer ago it sold the more uncertain it is, and is they have done any work to it since buying to, the guide maybe reflect this.

Sorry silly fone. Should be may not reflect this.

The only way to do this is to like a price per square foot for similar properties in the area. Prices are all over the place at the moment with interest rates up no one really knows what anything is worth with a high degree of confidence. Then it’s complicated by the fact that it takes months for the Land Registry to be updated following transactions and that info to be available on zoopla.

estate agents’ List prices can be meaningless. We ended up buying our house earlier this year for £1m less than it was originally listed for last spring and £175K less than was told would even be considered when we looked at it in September last year (pre Liz’s disastrous budget).

But basically it’s not your problem. You are happy to offer £700K. If the agent wants you to increase he/she should provide you with recent market comparables that justify the requested price on a per square foot basis. You can look at those comparables and say are they good comparables in similar condition and location.

Build costs are still all over the place so you are right to discount for work that needs doing.

Well it completely depends on the size, location and condition.

By the way those online valuation tools are based on price last paid and market trends so are only as reliable as the last person paying market value as it was. Of course some people get good deals and others over pay. It’s better to look at price per sq foot and this is how agents value properties. You can straight up ask for comparables to justify their pricing. Agents sent us a bunch when they were telling us houses were worth more than we thought. Just be confident about it. Lucky for me my husband works in real estate valuation and doesn’t get emotional about houses so I just leave him to crack on with it now.

I would offer between £710,000 and £720,000, I doubt they’d accept £700,000 if it’s just been reduced.

You need to work what your comfortable range is. If you don’t want to pay more than £700K, offer that and if they don’t accept it then walk away. However, you’re on a deadline so what will you pay to reach that deadline if that’s the only suitable house? You could offer lower and if there is some negotiation you offer above £700K on the provision that is completed by late August. We put an offer in on a house a few weeks ago, we went straight in at asking because we felt it was priced fairly compared to what else we’d seen, we knew what else we’d seen there been competition on and we’d lost out on one but we weren’t prepared to go above asking.

This is all totally valid and I agree with it all but I just thought I’d offer an alternative from the sellers perspective.
We’ve previously sold in a tough market but we knew what similar houses had gone for, how much we’d invested and how much we needed to come away with to make a move worthwhile. We received a really low offer, nowhere near asking. It pissed us off as we felt like they were time wasters…why view a house at a certain (market) value if they can’t afford it? We rejected, we had further viewings and sold to people who were much closer to asking price. Even when the initial offerers came back with an improved offer, their initial ridiculous low ball had put me off doing business with them.
Offer what you are comfortable with but if there is competition you may make yourself undesirable if they feel you have been cheeky.
Ultimately if they get no offers at the price they’re asking, they’ll have to take it off the market or reduce again.

They bought the house 10 years ago at half the asking and did a loft extension. No potential to add more square footage as garden is small and a mess - I'm hoping this will deter other potential buyers and help us get the price lower (unless some family is having the same thought!). We don't want work but feel that since it is outdoor, it can be done later.

They bought the house 10 years ago at half the asking and did a loft extension. No potential to add more square footage as garden is small and a mess - I'm hoping this will deter other potential buyers and help us get the price lower (unless some family is having the same thought!). We don't want work but feel that since it is outdoor, it can be done later.

They bought in 2013 for £350k?! Yes, they are being CF then. Unless they massively underpaid, then I’d argue MAX they should get is:

350 x 1.2 to 1.4 + 100 to 200

20-40% increase, £100k to £200k extension.

If you gave benefit of doubt, and did £350k + £200k * 1.4 = £770k.

And I think it wouldn’t cost £200k for a loft extension and I doubt prices in that area have risen 40% from 2013 to 2023.

I’d probably be looking at £600-650k offer. Unless there is some other reason for 100% value increase in 10 years.

OP should take the area into consideration. I trawl through land registry and find all sold prices in the area and work out an average % (trying to dismiss those I can find online with massive extensions, etc).

Where we are buying has risen 96% in the last 13 years. The house (465k) has gone up 100k in the last 2-3 years (Covid led exit to London accessible countryside villages).

Worth spending the time to figure out historic area trends for price increases.

We bought our house in 2016 and the area has significantly risen in value. We put it on the market for 35% more than we bought in 2016 and it’s sstc for 45% more. We have done an extension, although there is a space to do one, but have done some improvements but mostly ones which are unseen and haven’t added value. Our area has just seen such a huge rise over that time. We were looking at another village and that has risen even more than our village due to some infrastructure that has been added.

*We haven’t done an extension but have done other improvements.

Depends how much you want it and how much competition has been generated now it's dropped.

I don't understand this logic. Doesn't this depend on local market conditions? Market being the operative word - there is no intrinsic value other than what someone is prepared to pay for that house, as determined by the state of local supply and demand in that market?

Where I live prices have doubled in the last 10 years (there was an article just a few weeks ago in the press showing the percentage increase in house prices by area. It’s astonishing!).

As it has recently been reduced, I doubt they would consider any offers below 700k.
I would offer 700k if you have done your research into comparable properties in the area & know this represents good value for money.

Yes, I’ve given a guess at local market conditions. They could be 100%, but that is surely rare.

The national average is more likely to be 20-40% I am sure.

And what people are prepared to pay for it? Idiots with too much money and not doing enough research is what has lead to the dire housing market we find ourselves in.

You could use the Nationwide house price calculator to get a sense of the change in value since 2013. But if there aren't any comparable houses around it will be difficult to know exactly what it's worth. I think if you have been looking for a while, there isn't anything else you want, really like this house and are willing to buy it, then the pricing is probably about right. You should get a discount for being a cash buyer though. You could offer 680 if you're not hugely bothered about whether you get it. If you really want it I would go above 700. Appreciate that in these times you don't want to overpay, especially as a cash buyer, but you've got your deadline and I'm assuming not loads of other options.

Called up the agent just now. Did not make an official offer but wanted to get additional information and gauge buyer's bottomline - though i think i sounded a bit too keen and therefore have lost already 😂 agent said there was an earlier offer at 725 that was rejected. presumably because of chain. should have caught him out on it but instead i just nodded - regretted about making the call!

It was first marketed at 775. The seller has been trying to sell it for over half a year. So 10% below expectation a year ago should not offend anyone?