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!

I think you should offer what you are prepared to pay, or maybe a little under so that they can negotiate you up a bit and everyone feels good about themselves. Don’t add any justification. It’s not going to make them any more likely to accept an offer below their own red lines. And definitely don’t start talking about what the house is ‘worth’. And don’t let yourself be talked up and over your own upper red line.

Oh well you’re a quick learner.

Good Luck with your offer and tbh they should have reduced it already down to say 425k if it’s been stuck on the market for 5 months so hopefully the EA has been trying to get them to reduce a bit which may make them slightly more receptive to a low offer.

She's a potential buyer so what she thinks the house is worth (what she is prepared to pay) is extremely relevant, assuming that the seller actually wants to sell. It is far more relevant than the figure the agent has picked which is clearly too high in the current market.

This really made me chuckle.

For a start, they're estate agents, not brain surgeons. Anyone with their finger on the pulse of the local market (such as the average prospective buyer) will have just as good a handle on pricing as your average estate agent. It's really not that complex.

But most importantly, house prices are not set by estate agents. They don't decide the value of a home and then it just magically sells for that amount. House prices are decided by buyers, and - obviously - something is only ever worth what someone is prepared to pay for it.

@User7164- there is no specific % off that is 'cheeky'. You could equally say that the sellers are cheeky for advertising their house at more than market value for 5 months. The important thing is to offer what you think the house is worth to you, not more because you feel bad and not a v low figure which you regret it later on.
This house is clearly over priced or it would have sold months ago.
I assume that you have viewed it already as this isn't quite clear. Make sure you inspect it carefully and ideally do a second viewing with someone more experience.

What you need to do is research your local market carefully, bearing in mind that the market is falling in most areas (it went up in 20-22 but is now falling). Compare the previous sales, look at other houses that are being advertised, the ones that are actually SSTC. Look at sales stats for your area, speak to agents, bearing in mind they will try to create a positive picture. Ask the advertising agent how many viewings they have had, see if you can find out what the seller's situation is and whether they are a serious seller or not.
Personally, if I thought a house was wildly over priced, I would just move on and not offer as I would assume that the sellers are extremely unrealistic. You could consider saying to the agent that you like the house a lot but think it is over priced so won't be offering at present unless the sellers would consider a significant reduction, no need to give a figure. This puts the ball in their court and the agent can speak to the seller. If they aren't interested and want to hold out (in a falling market), that is their choice. You haven't upset anyone by giving a low figure (some sellers take low offers as an insult), you have expressed interest so they will call you back if they are prepared to take a much lower offer. Just don't offer pay in a falling market because you will likely regret it, especially as a first time buyer.

Have a look at @ movinghomewith Charlie on twitter/ YouTube. He has some v good advice for first time buyers.

There's nothing wrong in making a low offer, but don't tell them it's because you think their kitchen surfaces are cheap 😄

Good luck with your search.

When kitchens and bathroom are poor it is usually reflected in the price.

If a buyer asked me to lower my price so they could keep some of their money to build an extension, I think I would tell them to use that money to buy a house that is the size they are looking for and not expect me to sacrifice any of the value of my property and have less money to buy the house I would like to buy.

I appreciate you are a first time buyer but even so why would you expect them to subsidise your extension

Did I miss the explanation of how value increases by the house "just sitting there", would love to hear that one, LOL.

We bought for £310k (mid-terrace) in Sep 2018 and Nationwide currently values our house at £403k, though I don’t think we’d get anywhere near that on the current market.

I think offer what you think it’s worth - if it’s really overpriced you’d latest get problems anyway when the bank says so and won’t lend against the full purchase price (or rather you have to find more money for the deposit to still buy at the agreed price).

Be polite but firm - you don’t want to p* off the estate agent as they may just put the next property on the market that you’re looking to buy.

As others have already mentioned, as long as the bathroom and kitchen are functioning and not falling apart, this doesn’t tend to reduce the purchase price.

We paid 405k on a house on at 450k last March. Started at 395k which they said was lower than they were looking at that point (5 weeks) could we go higher? Went back at 405k and they accepted’

I’m sure you’ve heard it many times over the years Crashy but somehow you’re still not getting it.

We bought a house at the end of 2018 which, according to our remortgage valuation, has gone up approximately £100k in value since we purchased it. We've made no major improvements to the house beyond decoration, just happen to live in a popular area with outstanding schools and a shortage of housing stock. It happens 🤷‍♀️

Of course it's also true that if we came to sell it then the house would only be worth what a buyer was willing to pay for it, but given that all houses in the area have risen similarly in price, they'd be pretty unrealistic to offer me significantly lower than the current market value purely on the basis that I haven't done enough work on the house to deserve the £100k increase.

OP - it will be very personal to the individual seller, but if you offered me £390k for a house I was selling at £450k, I'd think you weren't a particularly serious buyer and wouldn't waste my time negotiating you up a few %.

If they've been on the market for over 5 months then they may well be overpriced, however if they haven't dropped the price at all in that time, I'd be concerned they weren't really that keen on selling unless they get near the listed price. Someone motivated to sell will start dropping the price if there is no interest. They obviously think it's worth around £450 and with no necessity to sell are happy to wait for a buyer.

I think you go in at 400k to test the water. If they say no, go back with 405k and say that's your final offer. They are unlikely to consider you at 390 and you risk pissing them off. If you're willing to go up to 405 just start closer to there and be prepared to walk away if they want more than you're willing to pay. If they ask why just say you would want to make some updates and it's what your budget allows.

I think the advice about always negotiating down on a property is misleading. It very much depends on the area and market. We listed our property at the very bottom of the valuation to facilitate a quick sale and didn't consider any offers under asking. After a few weeks we were thinking the market had died and we should maybe consider lowering expectations. But then ended up with 3 offers going to best and final and got quite a bit over asking.

Get Yourself the chrome extension that shows on right move how much, and how many times a house’s asking price has reduced by. The figures are pretty stark right now.
you will always get sellers (as evidenced by this thread) who won’t want to negotiate but if they need to move, and are selling in the current climate, there is room for big negotiation.
You are NOT unreasonable to go in at 10-15% below asking price at this time in the market, especially for a property on for five months.
p.s stats by Halifax and nationwide on house prices are not a true reflection of the market. House prices HAVE dropped significantly in the past year, and will continue to do so (acknowledging there will be some areas which won’t have done of course).

Have they dropped the price in the last five months or has it remained at 450k? It could just be that they are in no hurry to sell and aren’t prepared to accept offers much below. Comparing the price to similar bigger houses or with a bigger garden is really only relevant if they sold very recently, not even a few years ago. Tbh if the maximum I could afford was 400k I wouldn’t be looking at houses for 450k, I’d probably look at 425k max. The kitchen and bathroom not being to your taste isn’t the same as something needing replaced.

it’s just hard to justify paying higher purely for the house sitting still for a few years!

Inflation. £100 in 2019 is not worth £100 today. It's worth about £123.

So if you bought a house for £100 and then sold it five years later for £100 you'd have lost money, in real terms.

If you bought a house for £400k in 2019 and wanted to sell it for the same value of money today - you'd sell for £493k.

Lots of other factors to house selling of course. But don't forget the value of money itself changes.

I knew who’d written the crashy post before I glanced at the username 😂 he’s a regular, all replies are the same.

It's not the "approved" way to do it but I've always offered on the basis of what the house is worth to me - moderated by how long it's been on the market. As my income is low I have also offered the max I can manage - the seller either accepts it it not, and I get a quick decision. All this fretting over £5k in either direction is unhelpful unless of course it is really financially crucial to either buyer or seller...because house value changes and so do mortgage rates £5k either way is of no real consequence over the 20+ year mortgage term. Not getting the house you want, or the sale you need for the sake of a few grand seems daft...unless as I say, there is a real financial imperative for it.

I think go in with your best offer, along the lines of we love the house, can proceed, top of our budget and understand its lower than you were looking for, but as we love it so much want to make the offer.

Exactly this! People really can be clueless.

The reason the sellers have not dropped their asking price may be that they’re actually getting lots of viewers at that price. Asking price is part of marketing and you measure its success based on the number of people who actively want to consider buying it.
Agreeing an actual sale price is a whole different game. And the sellers (if they’re sensible) will be considering more than just the price — they’ll be thinking about how long the process will take, how much you’re likely to mess them around, and whether you’ll pull out for no reason just before exchange. A very low offer, even if you allowed yourself to be negotiated up, would raise red flags to me.
My advice is to talk to the estate agent. We’ve had someone just do this — they didn’t make an actual offer but they told the estate agent they were minded to do so, but didn’t want to insult us with something too low. I told the estate agent our actual red line. He confirmed to me that we were all in the same ballpark. And the viewers are returning for another viewing.
So, two messages there: the EA can give you an idea of what sort of offer will be accepted, or at least well received. If it’s too high for you, walk away. And, from the seller’s perspective, serious interest confirms to them that they’ve pitched the asking price right. So don’t assume that time on the market means that they’ll be open to really cheeky offers.

The exact opposite of what is the case.

Id just put your cards on the table, op. Tell the EA your position (FTB with nothing to sell), you love the house but think it’s overpriced and that your absolute max would be £400k. And take it from there. (You could say £390 to give yourself some room if you prefer.)

Sensible sellers don’t get offended, and if they’re not sensible and do get offended then you've lost nothing as you’ve already decided you won’t pay anything like the asking price.

Don’t say it’s ‘overpriced’. That is insulting the sellers — saying they’re greedy/deluded. Just make your best offer and leave it at that.

We had a couple of very low offers. We rejected them but didn't take it personally. However, we wouldn't entertain a significant increase in offer from the same people. We were too worried that they would gazunder us at the last minute

Another example. I’ve just helped a friend with his purchase of a house around that price.
What are the seller’s circumstances? If it’s not an urgent sale they may just wait and wait until a reduction is inevitable or may change their minds.
My friend was looking in an area with around 25 suitable properties in budget in November. He worked through the list of their attributes and visited 8. Loved one of them that, like yours, had been listed at 450 last summer. The vendors had reduced to 425 in October then ‘offers over’ 400 a few weeks later.
We looked at every bit of data and concluded a reasonable price would be 415. The market there is very flat but they are downsizers in no hurry.
As friend is a cash buyer I was hoping he could get it for 400. That was refused. Lots of back and forth and they have just settled at 417,500.

I still think he could have got a better deal on something with more motivated sellers but that was the property he wanted.
Good luck. I would offer 400 but expect refusal.