Low offer on an overpriced house?

[Enjoythelittlethings5]

I'm a ftb and I've been trying to get on the property ladder for the last 3 years. I had an offer accepted on a house back in 2020 but it all fell through after 3 months as we soon discovered the house was unmortgageable. Then came the madness of 2021-2022 with house prices rising/bidding wars etc. I was outbid on a house and shortly gave up afterwards and decided to have a break. Things have now settled, prices slowly coming down and properties don't seem to be selling as quickly as they use to, although some sellers still have (in my opinion) unrealistic expectations.

I've had my eye on a house for the last couple of months. It was first listed at the beginning of May for £179,950, then reduced to £169,950 at the end of July which doesn't seem to have made a difference as it's still up for sale. I've checked and the house was first sold in 2006 for 110k then again in 2016 for the same price (inherited??)

It's a 2 bed bungalow with a driveway and back garden. Granted it looks as though you could move straight in (carpets and walls/paint look to be in good condition). It's had a new kitchen and bathroom since 2016 but I can't see anything else that's changed. I have no idea how much something like that would cost but the kitchen is small. It's currently empty. Houseprices.io estimated worth is £156,000, but I'm not sure how accurate that is.

I'm buying alone but I have good sized deposit and I earn a decent salary for a single person, however I don't want to overpay as I'd like to have some savings left over for a rainy day. I'd be comfortable with offering £135,000-£140,000 but is that too low??? On the other hand, is that a low offer when the house is clearly overpriced? I don't want to piss the vendor off but I wouldn't be comfortable or feel it would be sensible paying any more than that.

Obviously I don't know the vendors circumstances and they can only say no, but I just feel like I'm being cheeky with that figure for some reason. I don't want to waste anyone's time, including my own if this is a ridiculous idea. It would be great to your thoughts.

I think it’s very cheeky.
Tho you can offer what you like I guess and they can feel free to turn down your offer

I think it's really hard to know! We have a similar dilemma - there's a house we want that's been on the market for absolutely ages, priced at £1m but we think worth £850k. Don't mind paying a bit more to get it, but we're not competing with other buyers, we're competing against the seller's delusions!

I'd go in at £140,000 and see how it goes. I don't think that's too cheeky for a property that's been on the market a while.

I think that offer is too low, but you won’t lose anything by offering it. I think they will be unlikely to bite your hand off though.

It seems too low to me, and you might find the estate agents won’t submit but if you don’t ask you’ll never know

A house is only worth what someone is prepared to pay for it. It may take the seller sometime to realise that though. I offered 10K less than the asking and it was accepted. Survey came back and said it was actually worth 3K less than my lower offer. I used the valuation survey as evidence that my offer was still too high and that any future buyers would also have a valuation survey which stated this so they accepted the valuation survey price which was all in all 13K less than the original asking price. Your offer does sound too low but it could be a starting point for negotiations, go it at 140K, they reject, offer to go up to 145K based on the fact it has been on the market a long time and you’re not in a chain etc

Don’t offer more than you feel comfortable for a house. Offer what you’re comfortable with but accept that the vendor doesn’t have to accept your offer. However, if you aren’t happy going higher, you have to accept this isn’t the property for you.

Is it overpriced for the area? The improvements made don’t necessarily relate to an increase in value. So a new kitchen and bathroom could have cost them £25,000 but you would perhaps expect maybe £10,000 more for a house that has a new kitchen and bathroom. There will likely be other invisible renovations they’ve put on their house in that time. We bought in 2017 and have done about £30,000 in renovations but we haven’t actually done much that is visible. Some sellers will want to get what they have invested in a house back. However, the market has changed dramatically since 2016 - not taking account of the invisible improvements as they haven’t really added value, our house increased in value by £60,000. So that price increase is possible.

Does something like Rightmove or Zoopla show what similar houses in that street / nearby roads have sold for recently? That may give you a better idea of the current value?

I think it is too low- the seller probably needs to achieve a certain amount in order for them to finance their own onward move but if it’s the highest you feel comfortable going then it doesn’t matter if they say no as you’re not going to try and negotiate further. You’ve not much to lose they might say yes but if they say no and think you’re a cheeky so and so it doesn’t matter as you’ve no onward relationship with them.

2006->2016 didn’t change because of 2008 crash.

Its value probably dipped 15-20% through to 2010 and then took 6 years to hit parity again.

Thanks for your replies! I thought people might think it was cheeky.

I've had a look and sold prices on the same street vary. The most recent were two that sold in 2021. Both a 2 bed semi with a garden, driveway and garage that sold for £143,000 and £162,500.

There is a 2 bed semi that is currently STC on right move that was up for £165,000 (obviously I don't know how much it's actually sold for).

It doesn't really help lol

I thought estate agents had to submit all offers by law? @Beckafett

Gosh I didn’t realise! You learn something new every day 😊

There's no such thing as a cheeky offer, ffs! You offer, they say Yes or No.
It's a business transaction, not a parlour game.

Offer what you like op, they can only say no and you can consider how high you will go🤷‍♀️ last year I had an inherited property up for 210k, within couple days offered 185k, I declined it. Someone else offered 200k, agreed sale within 10 days.
Last one I sold about 10 years ago went up for 150k took ages and lots of viewings eventually accepted 130k as already had new home and wanted rid of it. Depends on the sellers circumstances as to how low they will go and if its empty I'd suggest going in low.....you can always up the offer, good luck💐

As has been said, you can offer what you like, and they can hold out for what they like.
However 3 months ago, they were told they could get £180K for the property. It seems very unlikely that most vendors would then say 'Yes, £135 is fine'.

All that said, what a vendor will accept is very much down to their circumstances. You might 'luck out' or you might just piss them off. None of us know.

So that's about 18% under asking which is a bit cheeky, but it's up to you. Don't ask, don't try.

I haven't been able to exactly get to the bottom of it, but it seems to me that house prices.io only gives value including inflation. It doesn't seem to account for house price surges. It thinks my friends house is worth around 365k, whereas Zoopla thinks nearer 470. Zoopla seems to have factored in stupid COVID house price increases (31% ish over 2 years) and house prices has not.

I haven't been able to compare enough houses to confirm this, it's my hunch.

I might hold off for now, keep an eye on it and see if it's reduced again.... if so I don't think my offer would be too cheeky then. Something else might come up in the meantime too!

I'm not in a massive rush to buy, although I do feel like I've been trying forever now lol.

I’m all for offering below asking, but that’ll just piss them off. I wouldn’t try below £158k personally

A house is only worth what someone is prepared to pay. If you are not prepared to pay over 140K for it, don't offer more.

If you are comfortable at paying 140K, go in at 135K and see what they say. You can then offer 140K.

If they reject, they reject. You will have other options, they may not have any other buyer.

Genuine question to those who are saying this is cheeky - if it is overpriced, surely the offer is realistic rather than cheeky?

@notavillager I’ve been pondering a similar house by the sound of it. On last Oct for oieo £1m, taken off in March and relisted in April for offers around £1.1m..! It’s a lot of house, but looks to need rewiring, new kitchen / bathrooms, redecorating throughout etc. I think it should be about £850/900k, but I assume the owner isn’t for budging given it’s been on the market for nearly 11 months with no reduction.

Make sure I'd tou do offer you emphasize you're chain free, have your mortgage ready and would fit to their time scale.

*if you

Genuine question to those who are saying this is cheeky - if it is overpriced, surely the offer is realistic rather than cheeky?

Well, "overpriced" in the rather subjective opinion of the OP who is looking to spend less money than the property is priced at. We have no objective evidence of that.