How much to offer in current market

[SammySays]

Essex based and viewing a property on Friday. It is VERY dated (don’t think it’s been decorated for 50yrs)- peach bath, artex etc so there is a considerable amount of work to do but the bones of the house look good and if someone could put the money in, could make it a lovey family home. Asking price is currently £360k which is competitive for a 4 bed in the area, however, given the current market properties are sitting for months in this area and being reduced multiple times before selling and often coming back on the market. They want a quick sale as chain free with owner going into care. Mortgage rates have increased again today and if I’m honest £340k would probs be our max budget for the property and that would be difficult. Given the current rates I do think we are mad to be considering taking out another mortgage at this time (we’d port our current but would need a top up also), so obviously want to get it at lowest price possible. What % under is acceptable as an opening offer in the current market?

Previous purchases were a new build with fixed price and current property we paid £1k over the asking price in the end so haggling is new to me! Any advice/opinions welcome.

Personally, I'd be starting around £300K and citing examples of why and reasons. our current house had been on the market for a long time, as fairly unique and flawed for various reasons (which we've solved). We started at £275 on a 350 asking price and got for £285k - as yours needed and still needs work - we are currently moving and updating one bathroom and about to split a room and make a bathroom smaller that'll make it 4 double bedrooms with 2 en-suites.

@somewhereovertherain thank you for your advice! I wasn’t sure if going more than 10% under was too cheeky but in the current market I suppose a property is only worth what you can/are willing to pay and times are difficult for everyone. Sounds like you negotiated really well on your property!

We had a few (very) low offers from people ready to proceed (cash buyers, or no chain). If we’d been in a position where we needed to complete ASAP we’d have certainly considered them. Our new house hasn’t actually been built yet though…. I wasn’t offended/put out/etc, I understood the value behind said offers, and was happy to say thanks but no thanks.

So, offer what you are happy to pay, and see what happens. Worst case, they say no.

@mummymummymummummum you are completely right, thank you for that perspective 😊

50k under, be prepared to stop at 40k under. Unless you're going to do it all yourselves with secondhand stuff, that's what it's gonna cost you to do it up.

Even just a rewiring can cost 8-12k, without considering all the walls and carpets that will get ripped up and need replacing or fixing.

Not sure they'll go for it tbh. The baby boomer generation and people selling their deceased relatives properties all seem to be on the 'it will get better if we wait long enough' train. They seem to be absolutely determined that their homes are worth what Zoopla told them last summer, and not a penny less.

Our view was you can't go down later. and worst case they'd say no - it was a probate sale and had been on the market a while.

My son is buying a property that was on for 325
he offered 315 and they accepted same day

however the house is been totally refurbished even had a home garden office with electric and lights
you could just move in with your clothes 😂it’s a forever type home

the other house that he looked at was 325 he offered 310 they wanted 320
he carried on looking and found the one he made an offer on

a few days later they came back and said did he still want to pay 310 but he wasn’t interested

@SammySays don’t worry about being cheeky, it’s probably a cheeky asking price.
Renovation prices are horrendous now, don’t underestimate that.
The owner probably has 200k+ of Equity in that house, and hasn’t spent anything substantial on it in the last years.
I’d go 50k under also.
Bear in mind, another .5% is baked in on interest rates, as a best case scenario.

Thank you everyone, I really appreciate your opinions. I didn’t want to put an offer forward and be laughed at but feeling a lot more confident since you have shared your experiences. I’m very excited about viewing tomorrow now 😀

How times are changing! I got slammed here 6 months ago for suggesting 20% off was a cheeky offer

The EA will have heard this time and time again recently, and unless the house is already underpriced by 50k, they should be advising sellers to take it.

New boiler, 3-4k
Electrics 8-12k plus replastering and decorating
New, lowish end bathroom 8k
New, lowish end, quite small kitchen 10k
Carpets ? Well I had a crappy grey carpet replaced in a rental room last year that was 15x15 and it cost £410 including fitting
Double glazing. Even if they have it, it has a shelf life of 25-35 years so if they have done nothing, replacing DG and doors could run 10-20k.

We are talking serious money for doer uppers. That's why there are so many sat on the market.

What makes it worse is the availability of tradesmen. Good luck getting a quality electrcian or plasterer within a six month time frame. If they think the job is too small they won't even bother coming out to quote. I wanted all the washers changed in our rental and was let down six times by two different firms who presumably got a better job on the day.

So, make the EA know you are very aware of what an absolute ballache it is to get a refurb done these days, and don't let them fob you off with 'oh but we have a list of all these tradesman who can do it quickly for you' - that is just EA talk, and not to be believed.

It is
However, something is only worth what somebody is willing to pay.

Fingers crossed somebody isn’t willing to pay more than you.

I'd probably offer £335-40 if I really wanted the house and for vendors to remove from market.

I’d start 50k under. We offered 395k on a 450k house at start of March, citing high cost of renovations currently against backdrop of fall prices and rising interest rates .They came back and said that was lower than they were looking for at that point, could we go higher. We then said 405k as felt they would need to feel they had cleared 400k after fees and they accepted.

Family member accepted 305k in January on something that started at 350k in December another house in the family is set to complete soon at 55k under offer that was accepted last year in the frenzy of the spring but fell through due to a death and needing probate (480k to 425k).

Thank you for so many responses! Have my first viewing soon and very excited- I’ll keep you posted!

What would it be worth in a done up condition

@Alexalee hard to say as there are only 200 homes in the village. I would say in excess of £400k.

Saw the house and it’s even more work than anticipated even down to replacing the stair case. One of the plans would have been to knock down the wall between the kitchen and dining room but on inspection today I suspect it’s a load bearing wall.

any experience on the cost of knocking one of those down and putting up steel joists?

So they have allowed for the 50k refurb in their asking price... I think they would probably negotiate some but can't see them going much lower personally