How to make a cheeky offer without alienating seller/EA?

[User7164]

Hello!

We are first time buyers and have been house searching for the last year or so. Recently found a house we love, good area for raising our little one schools nearby and a quiet cul de sac. The house is listed for £450K and has been on the market for >5 months.

The average selling price in the street is quite high with a few (bigger houses with bigger gardens) going for 450-500k, but we feel for the size and garden size of this one, and the money we’d need to invest in replacing all bathrooms and upgrading kitchen (and perhaps an extension) that it’s not worth 450. In all honestly, I think it’s around 100k overpriced.

We think our absolute max that we believe the house Is worth would be 400k. We want to go in with a low offer, but I’m cautious as the last time we offered 15% below on a house we liked the EA basically cut us off. I don’t want to offend the seller at all because they were so lovely!!

Any tips on how to go into this? Thanks!

Should add, the house isn’t necessarily in bad condition but all that’s been done to update it since it was built 20+ years ago is basic decorating (new cheap floors/carpets, original kitchen painted and cheap new worktop), no substantial investment. It looks lovely but no evidence of the £105K increase they’re asking for since they bought it in 2019. Hence why we feel it is overpriced.

What are you considering offering?

Are you an estate agent? If not, what you think the house is worth is irrelevant

I think it helps relations to come from a place of
’we love your house, unfortunately we can only go up to x budget allowing for work, apologies for low offer but we thought we’d give it a go)
rather than
’we think the property is overpriced and we’re not prepared to pay x)

I don't think this is a good attitude to have, you don't need evidence of the increase in terms of them spending a lot of money to show an increase. House prices have gone up significantly in that time without any additional work being done to the properties. If they had spent significantly on top of that then you'd be looking at an even higher value.

You can offer and they can say yes or no. If what you think it is worth and what they are willing to sell for don't match then at least you tried.

I feel like your chances of getting it for under 400k are close to zero so I would honestly not share your thoughts about it being 100k overpriced with the EA in case they share them with the owner. If you seriously think you have seen equivalent houses for 350k the obvious answer would be to buy one of those instead.

If you aren’t willing to pay over 400k for this property that is fair enough and your prerogative. I would just offer 400k with no game playing, citing the need for a new kitchen & bathrooms as your justification and leave it at that.

You can put forward any offer, is it advertised as requiring modernisation. Are the bathrooms and kitchen functional. I wouldn't expect a discount for a new extension.

We had some cheeky offers for our flat. They didn’t come with narrative, and that wouldn’t have helped. Either the sellers will be desperate enough to accept a lower offer, or they won’t. Personally I’d put in something like £405k (90% of asking) and see what they come back with.

A 20 year old house is unlikely to need the bathrooms and kitchens replaced. You might want them replaced for style reasons, but functional rooms do not need to be updated.

just make a straight offer for what you personally have chosen to value the house. Don’t add in justifications that will likely be taken as insults.

This is so true. There’s not a set formula for how much they should increase by either - we recently bought in the NW and the value of properties in our area has basically doubled in about 8 years. It’s becoming more gentrified, has good transport links and is still at the more affordable end of the spectrum.

OP, I wouldn’t offer below £400k. If all the changes you want are about taste, rather than modernising or urgent repairs, then that’s not really the seller’s cost to bear. A house with tired/dated decor is worth a bit less, but not normally 25% less.

The house could have gone up in value to 450k during that time.

I used this:

https://www.nationwide.co.uk/house-price-index/

I put in valued at 345k Jan/Feb/March 2019, asked for its value in Oct/Nov/Dec 23:

I put in specific postcodes of areas I know.

Where I live, NW: 441k
Used to live, Midlands: 427k
Used to live, SE (ropey): 399k

The asking price might not be as unreasonable as you think.

Of course, you're perfectly entitled to offer whatever you want, especially as it's been sat on the market for so long.

As to alienating EAs... that's a toughie, they can be 'special.' Put it in writing on an email, don't haggle on the phone, don't explain your decision/offer. Don't say 'we only think it's worth' or 'they haven't done anything to it' or similar, just state your offer, because EAs are trained to box you into a corner for ANY explanation you give in response to a lower than asking price offer, it's literally their job. So. Don't phone.

but I’m cautious as the last time we offered 15% below on a house we liked the EA basically cut us off.

Don't let it get to you, is my advice. The other EA may well have 'cut you off' but I promise they'll be back in your life as soon as you look procedable on another property of theirs. You have to seriously piss an EA around to be 'blacklisted' and I'm sure that sort of thing only really happens in a frantic market when they can pick which buyer to recommend.

It could be that regarding that particular house, they'd overpriced it, and were getting fed up with people lowballing, because it makes them look incompetent.

Either way, don't let it be your problem.

How much did they pay for it?

" House prices have gone up significantly in that time without any additional work being done to the properties"

Yes, due to too much cheap mortgage debt, as that cheap debt disappears prices will come down, all that has happened so far is that sales and mortgage applications have collapsed because people dont want to or cant buy any more. I would look at historical sold prices for the street and offer around the price when interest rates were last at 5%+, leave negotiating space to go up slightly if they get offended, and use PropertyLog to see what other sellers are doing with their asking prices.

Ooh that's an interesting tool @KievLoverTwo (as the actress said to the Bishop). I put my postcode in and when I bought in 2018 and it says prices have risen 13.59% since then.

All useful information, thank you!

As for the value increasing by over £100K in the last 4 and a half years (especially considering mortgage rates were less than half what they are currently when they purchased) I fail to see how that can be justified. Fair enough if they’d clearly invested into the property and were expecting a return on that, but that fails to be seen other than general decorating which I would say hasn’t set them back any more than 1-2k. No improvements to local area or anything either. Not arguing, just genuinely curious if anyone can explain that jump in price?

And correct that the rooms are technically functioning, but extremely dated. Other houses in the estate that have gone for >450 have been updated, or the ones that haven’t have other USPs such as much bigger, SF gardens, loft conversions, more bedrooms/square footage, separate garages etc. So one would expect this to be reflected in the price, no?

My house has gone up by that amount in that time. It’s what happens in a rising market, regardless of what people do or don’t do to their homes.
it’s not relevant at all to see how much the house was worth years ago, it’s relevant to compare to nearby properties which are similar.
if you think it’s overpriced, maybe look for something else?

If you want to make the offer then do so. The worst that can happen is that it's declined. If you offer £100k under asking you will likely alienate both seller and agent that is a fact you can't get around. But if it means you get the house then what does it matter. I would prepare yourself for it to be rejected but it might mean you'll get it for less than asking. What you feel its worth is relevant if you're the only buyer, however, I would keep most of your thoughts to yourself and just deal in facts. I was an EA.

You're making the mistake of thinking people market tjeor house at a "fair" price. It's not about fairness, people want to get the most they can. Sometimes that's highly unlikely to be achieved and if so they will receive much lower offers. At that point its up to them to face reality or not. They aren't being unreasonable if they don't want to, it's up to them of they want to wait much longer for a possible higher offer.

So whatever you offer, regardless of how low it is, isn't "cheeky". It might be that your decision about what the property is worth to you is way off what they still think they can get or it isn't. That's all that will affect whether it's accepted or not.

@KievLoverTwo just used this tool, no info anywhere on official valuations of the house but based on the latest selling price it says it’s now valued around £414K hmm…

@Hatenewyear We were thinking of going in around £390K (13% under) with hopes of ending up not too much over 400 (whether that happens or not is a completely different story!).

But thank you for this insight, think you and others are right about keeping justifications to ourself or will probably just piss them off!

Not arguing, just genuinely curious if anyone can explain that jump in price?

Just as you would expect your salary to go up every year, so do house prices.

It doesn't really matter what work has been done to them or not to justify price increases; house prices only DEFLATE in a market crash, and that hasn't happened since 2009. Generally they grow a few percent a year, but during 2020 and 2022 most house prices absolutely rocketed, far above and beyond usual house price growth.

Some homes don't grow in value as quickly as others: more often than not, this applies to flats.

Some areas grow in value a lot faster than others too; hence a 42k difference in my three postcode comparison example.

Play around with houseprices.io a bit, pop some postcodes in, look at the values and the different colours shown and the website's explanations.

They don't have to justify it though. If you're looking at previous sale prices in the area and this one is towards the lower end of the scale with a little bit of updating in order it sounds like it's priced accordingly.

@CrashyTime you're living in cloud cuckoo land if you think prices are coming down significantly anytime soon. Although I'm guessing you've been living there for a while given your username 😁