Cheeky/low offer

[Switchinglanes]

Would you say this is a cheeky offer?

Asking price - £180,000
Offer - £162,000

House has been on the market for nearly a month.

The most recent house sale was back in 2021 for £160,000 so difficult to compare.

Depends on if a cash buyer/chain free often helps a low offer.

No I don't think so. They can always decline if it's not high enough.

@nicknamehelp sorry I should have said. I'm a first time buyer, have a AIP in place etc

I don't think it's helpful to think in terms of "cheeky" offers. Selling a house is not (or shouldn't be) driven by emotions. It's a business transaction. People will offer what they can afford or are willing to pay. If that's not in line with what you're looking to achieve then say no.

FWIW I don't think that's an unusually low offer. It's 10% under asking. Lots of people would go in 15% under as standard.

Sorry I assumed you were the vendor. Same principle applies though. Good luck!

Depends. Two things I would say: nearly a month is not very long, especially in a slow market; if you’re thinking they’ll be desperate, you may get have to wait a bit longer; and at exactly 10% under the asking price it doesn’t sound like a very considered offer — more like someone who’s heard tales of a 10% drop in prices and who’s trying their luck. If you’re serious, think carefully about exactly what you are willing to pay for it and offer that. And walk away if it’s rejected.

Not at all, especially as you have nowhere to sell.

10% under asking isn't a ridiculously low offer in general terms, but, if it hasn't been on the market for a month yet, I doubt very much if they will accept it.

I think 10% is a decent first offer, in the current market and after nearly a month. Depends a bit on where you are, but lots of houses near us are knocking 5-10% off after a month.

You could try asking the agent if there have been other offers, which should give you a sense of the likely reaction. If there haven't, that strengthens your case.

Emphasise that you are FTBs.

Personally I might go for £162,500, as it's just under 10% and I superstitiously think fewer zeroes are helpful!

Expect them to reject the first offer, but the reaction should be informative, you might be able to settle for 8-9% off.

Also - put a time limit on your offer so they don't sit on it for weeks.

I doubt they would accept. They will have to pay solicitors fees etc, so doubt they would want to end up worse off than when they bought it. Unless they are desperate.

One of my dcs was buying, and had offer accepted in 2021 (finally went through at the start of 22). Another is looking now. Oddly, 2 in same road have come up - both are up for £20K more than dc1 paid (very similar in shape, condition, facilities).
I know all MN threads say prices are dropping, but that isn't what we are seeing round here in those price brackets.
No-one who bought for £160000 in 2021 is going to sell to you for £162000 now (exceptional circumstances aside).

Unless it's obvious that they overpaid when they bought it

@JustAnotherUsey @UsingChangeofName

Sorry just to clarify the house that I was referring to was a different house on the same street.

The house that I'm looking at last sold in 2014 for £138,000.

Houses are only worth what people are willing to pay for them. Being a FTB has a value - and you’re only a FTB once so leverage it as much as you can.

The worst that can happen is that the sellers say no and want to negotiate upwards.

More likely someone who understands economic reality and is being sensible IMO, personally I would just assume that if they bought during the zero interest rate period they have overpaid and offer them 150k. Is the OP using PropertyLog to see what other sellers are doing?

Getting the same offer as you paid in 2021 is going to get less frequent as rate rises take effect, a smart seller would jump at an offer like that, of course the buyer`s lender would more than likely value it at less to take account of the very obvious change in the market now.

Ever since the mad rush on the property market during Covid the prices had to crash at some stage. I have little respect for estate agents, I’ve caught them out lying, trying to get two prospective buyers to bid up behind my back when I’ve agreed on a price with one of them.

I looked at a property recently that was bought in 2020, the agents have valued it at 60k above the price they paid, there’s limited alterations and definitely not 60k’s worth. I believe the prices are definitely out of touch with reality and the only winners are the estate agents.

You make a a cheeky offer, you never know, good luck.

I don’t consider 10% under a cheeky offer. We offered 12.5% under at the beginning of March when things weren’t as bad as they are now and they accepted 10% under.

Not sure about this, often people here seem keen to avoid FTBs!

It really just depends on the market where you are. I'm still looking as a ftb (similarly priced houses) and there is absolutely no way an offer 10% under would be accepted at the moment where I am. I offered 2% under last week on something and it was quickly rejected. I've now offered asking + let them know I am keen to buy white goods etc, ready to move asap as I'm renting but think that is likely to be rejected too. Really popular areas, not enough supply and so people are still wanting over asking basically.

We listed at £180k at the end of July knowing we’d be happy to accept £170k upwards (we sold within three days by accepting an offer of £170k).

I wouldn’t have given an offer as low as £162k a second thought, personally.

I don’t know whereabouts you are in the country but where I am, £180k is a cheap property. So although 10% is only ever 10%, when the property is higher value, there may be more room for manoeuvre.

To illustrate what I mean - my house was bought in 2007 at £130k and with a 2023 valuation of £180k, that’s an increase of 38% which sounds huge. But in monetary terms, it’s only an increase of £50k.

Now let’s take a house that was valued at £400k in 2007 (still a modest size home round here) and apply the same % rise - that house would have risen by £152k making it £552k now.

If I take an offer that’s 10% lower, I sell my house for only £32k more than I bought it for 16 years ago. Not a big profit in 16 years and could hamper my ability to buy another property.

But the larger house - if they accept 10% off the selling price, they still pocket around £97k more than they bought it for - much better.

So I do think the 10% figure doesn’t always play out as well for lower value properties in the same way because of the monetary amounts involved, rather than the %.

That doesn’t mean you shouldn’t offer £162k. What can you afford comfortably? How much do you think the house is actually worth? Don’t ever be tempted to go above either of these red lines. I listed at £180k as I wanted a fast sale but I’ve seen almost identical houses listed at £200k (which are still sat there unsold, months later). Know your local market - do your research to gauge what you think is the right price.

I don’t think a month is very long given current market conditions - but they might be anxious to sell asap to avoid a further big market drop that some are predicting. The offer is worth a shot, sure, but don’t be surprised if it’s rejected. Be clear about your next steps and don’t get sucked into submitting a higher bid if you’re not comfortable with paying more.

Good luck!

Oh also, just to add, we had another two possible interested buyers. Both sounded faffy to me - one wanted a friend’s opinion which meant a second visit when said friend could travel down. They wanted us to hold off on selling to other parties until they could come again. This meant there was a chance that they’d offer the full £180k.

In contrast, the person who offered £170k was a FTB, big deposit, AIP already shown to EA. He offered £170k as the bathroom and kitchen are a bit tired and he wanted to keep some money to replace them.

In fairness, the reason I priced my property at £180k and not £190k+ had already taken this into account. So I could have reasonably turned it down. Genuinely, even £180k was/is an excellent price for my house - the location is really desirable and quite unusual.

But I wanted to sell quickly, and the buyer’s reasoning was entirely understandable- and he was in an excellent position. He was keen on the house, offered quickly and had everything in place (our EA is excellent at doing due diligence).

I accepted his lower offer of £170k rather than hold on for the other buyers because I wanted no fussing around and a quick sale (I need to move to be with DM due to her health).

It’s not always about price. It wasn’t for me. Although I had a minimum price I might even have been persuaded to drop a couple of thousand more because this buyer was exactly what we ideally wanted.

I would wait until after they make the first reduction and then go with 10% off that.

Sounds like you played it well @SpidersAreShitheads

Potentially could have got slightly higher but accepted a decent offer from a motivated Buyer.

Your Buyer played it well too by offering what they could afford taking into account work they needed to do, and demonstrating that they were organised and motivated to buy your property ASAP.