Offer too low?

[SillyChumpster]

A 3 bed, detached house is on for £325,000. It was bought in 2019 as a new build for £227,000. It's been on the market since the end of June, no reductions in price, as far as I can see. Can it really be worth £100,000 more now than it was 4 years ago??

A similar house on the same estate went on at £300,000 recently and has already sold, although I don't know what it has gone for.

Would offering £275,000 be incredibly cheeky? I'm not sure we could actually afford to go any higher. But part of me thinks, you don't ask, you don't get....! (We have found a buyer, are porting our mortgage and have a decision in principle for the extra amount we need, so we're in a fairly decent position).

Hi @SillyChumpster
My friend put in a low offer which she thought she'll never hear back from but they accepted. She's always telling me to do the same. I think go for it, put the low offer in, nothing to lose. Hope they accept your offer!

I think that sounds fine

Disregard the asking and DYOR to set your offer. There is no shortcut, and no one here will have a clue either, obviously.

New builds are always about 10% more expensive than aged houses, so the vendor paid more than the going rate in 2019.

It takes a long time for their value to fall in line with older houses. I don't have anything to support this other than the sheer number of houses I have looked at, but I would say about eight years.

The 300k probably would have sold for 5-10% under the asking price.

I saw a secondhand new build selling for £500 more than the vendors paid for it five years ago last week. The area's definitely suffering, 37% of houses for sale had been reduced. That's the reality of the market now. So that vendor wisely chose to immediately price low and I expect will sell quickly.

The other thing I have noticed is there is still a massive crop of new builds going up in some places, and they are selling for the same price or even less than the secondhand newbuilds. So, if you are looking for that type of house, you have some bargaining power in 'why would I pay 330k for yours when I can buy the same thing with a 10 year NHBC guarantee and have brand new kitchens and bathrooms?' - at least in areas where there's no price difference and builders are still building.

What does houseprices.io say it's worth?

Eventually these owners will have to reduce their asking price. They will have been told that September is a busy month and they should expect lots of activity, so I doubt they will reduce before then, if they haven't since June.

You might see it reduced in October.

If you are not in a rush, I would wait til then.

EAs are really having to fight vendors on their expectations of what their house is worth versus what people are prepared to pay these days, and it's taking a long time for sellers to adjust their expectations.

They've probably put it on for what bloody Zoopla has said it's worth.

It is a buyer's market right now so it's reasonable to expect lower offers.
It's also possible that house prices could fall further in the next year or so 🤔.
That said, a 100k fall in value in 4 years seems steep to me.

its a buyers market so the perfect time to chance your arm

If the 300k house sold quickly then it very likely achieved close to the asking price, I would guess about 275k or 280k. Therefore 275k for “your”house is not a cheeky offer.

Buyers of new builds pay a premium for the property being brand new. But the house loses that USP the minute they move in so resale values are normally worse than in older properties for years.
They sound unrealistic with their valuation and you could point that out to the EA by citing the house that sold recently that was on at 300k.

Thanks all. I just don't want to be seen as massively cheeky! I'll give the estate agents a call and see if they can tell me whether the vendors are likely to be flexible. Although the fact it hasn't yet sold suggests to me they might not be!

The market round here (north norfolk, not coastal) seems very inconsistent - houses can go on and sell within a couple of weeks or they hang around for ages. People do seem unwilling to accept house prices are not increasing at the rates they have been previously. We viewed one a couple of weeks ago which has been on for ages. They upstairs layout was a bit strange, but it might have worked for us with some tweaking, but the EA said there was no flexibility in the price, they wanted near asking as they are about to retire. But the house needs so much doing to it, they are unlikely to get it. The EA was quite apologetic!

Yes @SillyChumpster it must be frustrating for the EA when they have unrealistic vendors. People always blame EAs but it’s not always their fault.

No it is not worth £100k more and why are they leaving so quickly after buying it? That is a reason to not pay what they want too. It’s a buyers market

Does it matter?

If you can't afford to go beyond £275k and you piss off the vendors, it's not as if you could magic up more money and offer that instead. So, in this circumstance, you haven't lost anything.

It’s only around 15% less of the asking price, not that cheeky but it depends how much they can afford to drop down to. Some vendors like to price high as advised by their EAs and still think they are realistically going to achieve it.

@anotherthrowawayname Honestly, I know it shouldn't matter, but I struggle with the idea they might be upset/angry at a low offer! I do not know the vendors (as far as I know...) so it really shouldn't bother me if they are annoyed by my offer, but it just plays on my mind!

Every time I’ve sold @SillyChumpster I’ve taken the view that it’s better to get low offers than no offers.
So many Sellers are worried at the moment about getting no offers, so I doubt they will be upset or angry. Disappointed maybe, but that’s to be expected in this market.