Offer

[BAIL08]

We have recently done a second viewing of a house that we love. A year ago the house was on for just over £1m, it only got one offer but that fell through.

They’ve now relisted the house at £950k with a new estate agent who said they last estate agent overvalued it. It is a lovely 5 bed Victorian detached house with high ceilings, but they’ve lived in the house for nearly 15 years and have done absolutely nothing to it (literally nothing) it’s very dated. The kitchen is also very small for a house of that price and size, same with the main bathroom, so you would need to spend money repainting, flooring, carpeting, taking out water tanks, making a bigger bathroom and kitchen (knocking through walls and extension).

We made an offer yesterday of £100k under, giving the reason that with the current interest rates being what they are and potential housing crash we need to be realistic and the house needs a good chunk of money to do it up. I also think for a buyer to basically sit in a house for that long and rely only on inflation to increase the value is a bit much. This is coming from a perspective that the house we have (also Victorian) was also very dated when we bought it and we have renovated it from top to bottom over the last 5 years and you can see as they estate agent said, why our house has jumped up in value.

With all of the above though, do you think it’s very cheeky to make an offer of a £100k under? They have rejected the offer and told the estate agent to not even record our offer. The estate agent also made a cheeky comment about us maybe just not being there yet to buy a house at that price. I took a bit of offence to that considering we’d have a significant deposit and already have a mortgage in principle so know we could afford the asking price and more if need be, but we are trying to be sensible and realistic.

I don't think that's cheeky. You are simply pricing it in line with expected value in the VERY NEAR future. Its not surprising though that they reject. They thought they were getting a million for it and now the situation has changed in a very short period of time. Your offer will at least have started the process of coming around to reality.

Your prerogative to offer what you want to pay. I’m in Scotland where houses for sale have a valuation by a surveyor transparent to all prospective buyers and I wouldn’t have offered 100k under that, not the done thing in our area. But 100k under an estate agent valuation price? Probably would have if I didn’t think it was worth it. Whether they think you are cheeky or not is no skin of your nose. Raise your offer to your best and final if you still want it and then walk away if they refuse it.

I agree, I think if someone tells you you could get a million (even if done incorrectly) for your house you’re going to struggle to want to accept less. But it really is a very different market at the moment and my big bug bear is that they’ve not done anything with it, not even really furnished it properly. Which makes me thinks they’ve not spent any money on it.

You are not wrong to offer what you consider the market value to be but equally they are not wrong to reject your offer as incorrect. Only time will tell who is right. You chose to improve your property they didn’t or couldn’t afford to but there’s no moral imperative here. It’s all a business decision.

@Littlessweepy i agree with you, it definitely is an estate agent valuation (in England). I said to my husband I wish the house was valued by an independent valuer, because you would know what the actual value is. We’ve also compared it to a house we viewed 2 months ago which was much bigger than this one, and on for £50k less.

I'd take the comment 'you're not quite there yet' and reverse it back onto the sellers. They're not quite there yet in realising they're trying to sell in a falling market. Give it a month or two and they'll soon catch on.

Also, may be a bullet dodged there, with the amount of modernising you'd need to do. You wouldn't be able to guarantee you'd get a good return on your investment until the market stabilises.

I understand why people don't do up houses. I put a new kitchen in, year later sold it only to watch new owners rip it out. What a waste.

I get what you’re saying @crossstitchingnana but I do think if you’re in a house for that long and want a lot for it, you need to at least paint it and replace carpets that are in tatters.

@Darkandstormynite very true. I think the estate agents aren’t being realistic either, but they’re probably dealing with a seller that wants a certain price and if they don’t agree with it they may lose the listing. Equally if they don’t sell it that’s probably worse.

I take your point but this is a business deal so try to take your sense of outrage out of it. They may be right that they can get more, or they might prefer not to sell at all if they're only getting £850k for it. You offer what it's worth to you, which may be more or less than the market value and then the rest is up to them.

Whether they accept might come down to why they are moving? Do they need to? Do you know?

@Tormundsbeard i don’t think they actually need to. So I do think that’s a big part of it, they can just sit and wait for the money they want. I’m just not sure how long that may be, but equally you never know and someone may offer closer to what they are looking for.

You say you saw a better house last month for £50k less. Why didn't you buy that one then? They can list their house for any amount they want. You can make any offer you want but if they already reduced their house by £50k and then you offered £100k under that, then I can see why they not only rejected your offer but didn't even want it recorded as an offer. If you don't want to pay the listed price then just walk away, look for something else.

They got an offer when it was on at £1 million even if it did fall through so you are being cheeky to expect £850 five minutes after they listed it at £950.

I wouldn’t think twice about rejecting your cheeky offer either. Even if it turns out to sell for £850 in a few months’ time, I would at least know I had tried to get more and I would be no worse off if I was moving elsewhere as those houses would have dropped in value too by then.

It's impossible to say without knowledge of the property. What does House Price IO say?

It will show a current - inflation adjusted - value. You don't want to be paying anywhere near that because of the upcoming falls.

If the property is that much over-valued then they are not sensible vendors and agents to deal with, and you're wasting your time dealing with them.

@caringcarer it wasn’t the right area for us school wise unfortunately. They did reduce it by £50k from an overvalued amount, which the estate agent said was the case and the sellers appreciate that. They’ve relisted it a year later in a completely different market.

but I do get what you’re saying, if that’s the amount they want then that’s absolutely up to them and we’ll just keep looking.

@Whatevergetsyouthroughthenight the original offer fell through because the buyer made the offer and then literally stopped taking calls and they never heard from him again. So it’s questionable if it was a real offer in the first place. Who knows.they had no offers other than that, and as I’ve already said he estate agent and sellers know it was overvalued.

that’s completely fine if you think we made a cheeky offer, hence why I asked the question. The house has been on the market for a month, so hardly 5 minutes after, but I didn’t make that clear so I can see why you may have thought that.

I recently read that houses at the moment sell at around 20% below the first listed value on Rightmove. Which would suggest that estate agents are vastly overestimating the value of properties. By that reasoning an offer of £100k below asking is not crazy.

The longer they wait, the less they will get for their house. But then that's their prerogative.

Agree with so many of the comments on here about how sellers are unfortunately not getting the memo! In this current climate EAs are really chalking up prices and then when the offers come in lower they can’t understand it.

we had exactly this recently OP, the owners hadn’t done anything to it in 6 years, they wanted a grossly over estimated price and in the end they pulled it off the market, as I think they didn’t need to sell and so thought they may as well stay put.

so it’s not cheeky, it’s the market and I think it will all come down to how much they need to sell.

This^ I'd reply to the EA that you were comparing with the bigger one that was 50k less, and that perhaps the sellers are not being realistic.

I have viewed multiple properties priced at double that amount and am appalled at the state of some of the houses. They’ve been allowed to disintegrate yet because it’s an expensive area, they can command these prices. The penny is slowly dropping and some are lingering though. On the other hand, where we have walked away in (private) disgust, others have marched in and clearly offered a price. According to the local EAs, they’re offering asking price or above. Indeed when I checked the sold
prices, one house we rejected went for 400k over the asking price! I think it all
depends on conditions in hyper-localised markets.

I agree with this. It almost doesn’t matter what the actual realities are. It’s a business deal that’s highly personal, so you are entitled to your opinion on their decor and asking price and can offer whatever you think is reasonable and they are equally entitled to think it’s not enough and they won’t accept. You don’t have to buy it and they don’t have to sell to you.

It's not cheeky to offer what you think the property is worth/ what you are prepared to pay. Obviously it does need to be in line with the local market and you know what those are at present.
I agree with those who suggest not taking it personally. The agent sounds rude. It may be that the sellers and agent are very unrealistic and haven't come to terms with the current falling market and mortgage turmoil despite it being very heavily covered in the media for 2 or 3 weeks now. Plenty of very unrealistic sellers out there at present.

@BAIL08 hi, how did it work out in the end :)