To offer 10% under asking price

[TurquoiseDress]

So we’ve been on the market for several weeks now with our 2 bedroom split level maisonette in SE London zone 5.

We’re on a well known estate agents, price is OIEO £400,000

The best offer we’ve had so far is 11% under asking price (we’ve had 3 offers). It’s not enough to enable us to make an offer on the 2 houses we’re interested in; now just seen they’ve both gone under offer.

The other day we viewed a 3 bed semi on for £625,000 which was nice but on a busy/congested road which put us off a bit.

This house is on with the same agent as us, they’re pushing us to make an offer.

It’s been on the market several weeks too, had a price reduction. We’re wondering whether to offer 10% under asking to reflect the ‘reduction’ applied to ours.

The agent seemed to indicate that the seller would need to accept a reduction.

Does this sound reasonable? If we offered £562,500 that’s 90% of asking price.

Are other areas experiencing something similar?
Or are sellers getting the asking prices they want? Thank you

That's interesting, good for you holding out

Where abouts in the country is this and how long were you on the market for?

Yes estate agents do tend to talk the market up/down depending on what they want you to do...

Their job is also trying to get the best possible price for expensive house, they shouldn't be saying things like that to you.

EAs just want the houses sold ime. They get the bulk of their commission anyway, they don't care about losing a few extra k by selling for a bit more.

OP, 10% off your current house is obviously going to be less than 10% off your new house. You could always take off exactly what you're losing, rather than as a percentage.

Offering 10% off isn’t outrageous at all. Every house I’ve bought I’ve offered under asking (successfully). Our current house we got at just over 15% under an asking price that had already been reduced by 10%. But we were attractive buyers (under offer to a cash buyer)

@ Turquoisedress

We are in central london. The property concerned is a one bed flat in mansion block. It has been on market for 4 months prior to full asking price offer.

@TurquoiseDress

I guess it all depends: a). we are not desperate to sell. b). we think our asking price are fair and reasonable - we had done major renovation to top notch quality, would have costed so much more to do now with the increase in costs of building materials and labour. c). the property is in a superb location - better located than the average comparable properties on the market.

So know your facts well and make a sensible offer / decision.

Question: when the headlines and people say '10% under asking' are they saying it's 10% under the current asking price (after any reductions the sellers might have made) or is it 10% under the original asking price?

For example: House originally on the market for £1M...then reduced to £950k.. then sold for £900k. Technically that's 5% under current asking price but 10% under original asking price.

Offering 10% under asking is definitely not outrageous; it's a business transaction.
It may be v unrealistic in some markets such as the Covid boom. It is much more realistic now with property prices falling and demand being reduced. It will depend on the individual property and area though and some sellers price reasonably and others don't and some areas are more stagnant than others.
At present, though, a lot of sales are falling through and sellers are then listing lower as the market has fallen further or they get negotiated down at some point in the process so having an offer is only the start and certainly doesn't guarantee a sale.

I assume people mean 10% under current asking price. The fact that the property was initially marketed at too high a price is irrelevant for a buyer in this regard.

Hey OP. Zoopla released this update today:

while 1 in 6 are selling at a 10% discount or more.

https://www.zoopla.co.uk/discover/property-news/house-price-index-june-2023-buyers-negotiate-on-price-to-achieve-biggest-discounts-since-2018/

And these discounts may be on already reduced properties as there are lots of reductions in most areas at present.

I also don't believe it truly shows the whole picture. Those in the property business have a vested interest in talking it up. Reality is likely to be far grimmer than they've reported.

Exactly. They will always tend to present the most positive data they can possible find and talk about 'softening of the market', etc.

We are selling (NE London) and have just rejected outright an offer at 10% below asking. We are listed at £700k. Will start negotiating if someone offers £650k. Anything below can’t be bothered with. We are not desperate to move though.

It is sensible to offer what you are happy to pay dependant on the kinds of offers you are getting. Unfortunately, the only sellers who are likely to accept a very low offer are those who are desperate to sell. It’s going to be luck for you that you a) find a house you love and want to offer on b) the seller is motivated to move.

In our scenario the 10% under asking is based on the current asking price

Actually we've got no idea what the original asking price was...Rightmove shows it was reduced to current asking price almost 2 months ago

We haven't specifically asked the estate agency...I guess because that's the price it's on for currently, we never saw it at the old price so it's kind of irrelevant

@TurquoiseDress The house we’ve just purchased for £150k is in the NW Lake District.
5 bed, 4 storey huge Victorian Terrace with sea views approx 200 meters from the beach, opposite a train station direct to Carlise.

I’m still pinching myself!!!

I think if I wasn't that fussed about the house on the congested road, but it'd do the job for me in terms of what I needed of the new house in the timeframe, if I got it at the right price, I'd go in maybe 12.5% or even 15% under. The other vendor might be more desperate to sell that you are, more influenceable by the EA than you are, or both.

Also, although it's objectively bad form, you can accept an offer 10% below and then change your mind. Awful, but sometimes necessary especially in these times - you have to put your family first.

What lots of people are ignoring is that most people arent desperate to sell. They might need more room and have outgrown their current house but if they don’t like the price offered they will stay put (and moan continually!).

I sold a relatives house last month in London. We priced it to sell. In the end we reduced by 4%. It was in a fab location but very dated. It was empty in the last couple of months so we definitely wanted to get shot of it. Our own house - well if we wanted to downsize we would do so now but looking at the housing market we will stay put. We have a very small mortgage. Think loan to value as 5%.

Some people go further and test the market but won’t sell below a certain level. They will just choose to stay put and then withdraw.As others say 50% of people don’t have a mortgage at all!

I wouldn't offer on the house at all as you don't sound very keen on it with its busy/congested road.

Why not wait until something better comes along? Prices aren't rising, they are likely to be stagnant or falling in your area so a house may come up later that you can afford without the compromise of a busy road. Don't let an EA push you into making an offer on a house you aren't that keen on.

Sounds like a bargain!!

Sounds like Workington, or thereabouts?
The only local employment is Sellafield, or the government really, hence the depressed (realistic) house prices.

If you had a chain and everyone knocked off 10%, eveyone but the downsizers would be better off.

Do you actually want the £625k house, though, whatever the price?

10% under is fine to offer if you do. The estate agent can tell the £625k owner that you have a proceedable offer if they accept.

In the last housing slump in 2008-11, we sold and bought...
Accepted 13 % under asking on ours, got 7% under asking on our onward purchase
However, we were desperate to move, and our buyer was a cash buyer.
So...yes. it can work our.
The full picture (and pain) hasn't really filtered through to the housing market yet.
Q4 and Q1 of next year will be "interesting"

To be honest we're really not keen on the road it's on- busy & congested

But it's a 3 bed semi vaguely within our price range (many other 3 bed semis round here are 700k and beyond)

The owners have been there over a decade or so and clearly haven't done anything to it. Many similar houses have had loft conversion, ground/first floor side or rear extension

So no, we're not desperate for the house at whatever price...certainly not the current asking price.

18 months ago similar properties would have been around 550k...

...but of course yes, that was 18 months ago...