How much should we offer on this house?

[Definitelymaybe99]

We are West Midlands based looking at a 3 bed link-detached, currently on for offers over £270k. It was originally listed in June for £295k and has been reduced since then.

It is very dated and needs a fair bit of work to modernise, although seems structurally fine (I.e. won't need rewiring / new electrics etc.) It's currently got a lean-to conservatory and no downstairs toilet, so we'd be keen to knock down the conservatory and put in a utility/toilet off the kitchen. The garden also needs considerable work - the garden is probably 3 times the size of neighbours but needs about a years worth of work to clear and get to a good standard.

House also right next to a very busy road so has a fair bit of road noise in the garden but not inside - something we're fine with but obviously affects the value.

The market is fairly stagnant where we are and lots of properties have been on for a fair few months without selling. Similar properties (3 beds, within the same area, better condition without the road noise but smaller gardens) are listed for £275-£285k but not selling.

The house 2 down (identical layout but with a smaller garden) sold for £160k in 2017. Another similar (but fully detached) sold for £195k in 2020, but there isn't much else to go on.

We'd like to offer £255k but don't want to seem cheeky first time buyers. We think this will reflect a falling/stagnant market and the work needed. We also don't want to risk the mortgage provider down valuing as we can't afford to make up much shortfall!

Is £255k too cheeky / what would be an appropriate % under to give as an opening offer? And advice/thoughts welcome.

This is a business transaction so don’t worry at all about being cheeky. Make the offer you think is right.

I had a similar thread to yours a couple months ago, I think I literally asked 'too cheeky?!' as the thread title 😂

We are in Hampshire/Wiltshire border, and saw a 4 bed detached 1970's build which needs modernisation, attaching to mains gas, and new heating system installed, probably re wiring and a couple of ceilings remodeling as they're made of polystyrene tiles 😑. Some of this was know prior to survey, some not.

We noticed the house on Rightmove at £385k, it was dropped to £375k just before we logged our interest, and we had an offer of £365k accepted.

For context, the house went on the market at £415k (!) and other houses on the street, fully modernised were going on the market at about £425k so probably achieved around £390++k I would imagine.

In this market, I don't think anything is cheeky within reason! I think we got such a good deal as we are prepared to take on the work, and the sellers wanted to move quickly and were even prepared to sell up and rent in their chosen location.

I don’t think 255k sounds cheeky at all. Most people would prefer the 3 beds in better condition and no road noise but smaller gardens. If they aren’t selling at 275-285k then there is little chance this house will achieve 270k let alone generate offers over that amount.

Not cheeky at all, sensible

Do you really need/want to move now?

The property seems way overpriced against, for example, the detached that sold only 3 years ago. And all the main house price indices are showing month on month falls with no sign of that slowing down, given where interest rates are.

However, if you do, I would not make an offer as such straight away. Instead I would give feedback along the lines of 'we really like it and see potential in it but we think the price does not reflect the work needed and location by the road' etc. Then see whether the EA invites you to offer/say what you think its worth.

It may give you an insight into whether the vendors will move on price and also may be considered less 'cheeky' when the EA gives the vendors feedback.

Not at all cheeky. It sounds v over priced from the comparisons that you have given.
This is good advice. Don't waste your time offering if vendors haven't got to grips with that the market never got as high as they think it did and has fallen in the last year. It seems unlikely that they will have significant interest when other, more desirable properties are not selling for the same price.
Have a look at Moving home with Charlie on twitter/YouTube. He's rather marmite on here but is definitely worth listening to, especially if you are a FTB.

Offer. The worst they can do is say no?!

They are going to say no to your first offer so I would go a bit lower in this market

Yeah I'd be tempted to do the same. But I'd also test the water beforehand by saying to the agent about how much work is needed and how it's so overpriced compared to better properties.

stolen from another thread:

“if you’re not slightly embarrassed you’ve gone too high”

🤣

in this scenario. £250k. ‘We really like it but are factoring in the costs of bringing it up to date and we are nervous about the market.’
The hope for a counter offer and settle under 260.

Thanks everyone - this is really helpful. I'll give the EA a ring tomorrow and sound them out. I'll mention what's been said here - road noise, work needed, previous sales much lower and see what they say.

We don't NEED to move but are keen to. We really like the house but are prepared to walk away if we had to. We don't want (nor can we afford) to pay more than it's actually worth.

Really appreciate the advice. It's such a minefield and my friends / parents have only ever bought new builds so it's a little different. Thank you!

Personally I think £255 is too strong. Go in hard, they can only say no.

If it was me I'd offer £220 and test the waters and see what their counter offer came back at.

220k is ridiculously low @ConnieCooper
If they were willing to accept 220k they wouldn’t have listed it at over 250k

I’ve just run it through the nation wide calculator https://www.nationwide.co.uk/house-price-index/ and it said 210k.

in 1999 we offered £55 on a house priced at £65 and got it. Competitive market at time but lots of work needed. Sold it 6 years later for 175 but was originally on at 185

in 2006 we offered 217 on a house priced at 245 and got it. Needed work. Sold it after 10 years for 385 but was originally priced at 400

in 2016 we offered 290 on a house valued at 325 and got it

the house sold in 2017 may have been sold to relatives or needing major underpinning or something.

Can you put a link to the house on for nosy people me?

I’d go in at 220 or 225

Lots of food for thought - thank you. £220k would be 18% though - seems a massive amount under and I don't want to offend the vendors (although I know at the end of the day it's a business transaction, the EA mentioned it's a probate sale so want to be sensitive if that's the right word).

For further context, houses in the next street over (parallel to this street so will still have the road noise) which have sold more recently went for £285k (June 23) and £255k (Dec 22). They're both 4 beds in good condition, so maybe £255k for "ours" is a bit high to start. Definitely worth me giving the EA a call tomorrow.

@ShitMermaid I'll drop you a message

I would offer somewhere in the 240s. Probably 242 or 243 to start with. I don’t like insulting offers as I’ve been on the receiving end of those and then the gradual climb up.

Well, after speaking to the EA who said they'd "consider" an offer but was reluctant, we put an offer in for £240k yesterday. Took into account most of you saying to offer around £220k and the fact that the recently sold houses in this street were only £200k max. EA rang this morning to say that offer was "far off" reaching a deal, and the vendors have come back with £265k.

Our max for this house would be £260k I think (we can borrow more but I'm reluctant to). Would you go back and offer £250/255k and see where that gets?

I'd just say 245 and the offer remains open for a month. If they get a better offer in 4 weeks good luck to them. It sort of calms down the price standoff.

£240 seems a v reasonable offer compared to other properties and in a falling market.
Perhaps say you will leave it on the table for 4 weeks as the other poster suggested. Put it in an email.

I knew 220k was a ridiculous suggestion 😂 @Definitelymaybe99

It's good you started negotiations anyway at higher than that -240k - and the owners have shown some willingness to negotiate by reducing to 265k.

I would go back to the EA with an offer at 250k and say that's the most you want to pay for that property based on all the work that needs doing to modernise it and the high cost of building materials. If they mention 265k again, say that you are not willing to go that high.

It’s always good to start quite low, as you have. An old study showed that a low start, often ended in a lower price being eventually accepted.

£250, then £255 could be worth a shot?