O.I.E.O can we offer less?

[Ellabellabow]

As the title says, we are really interested in a property, it is marketed as offers in excess of £1,000k. It initially went on at £1,075k and then was reduced a month ago.

There aren’t many comparable properties, however from the few that have been SSTC recently they have all been marketed closer to £950k, although could go up to £1,010k maximum. We want to offer around £975k - is this likely to offend the seller and burn bridges?

You can only try, they can say no if it's not what they want, and indicate what they want. £975k is a serious offer, not one too far out.

Look at comparables and what they have gone for in the area, along with the general trend, but, at the end of the day, it's what it's worth to you.

FWIW, I tend to ignore anything other than the listed price as it makes it easier to make decisions.

10% under is pretty common, especially at this price point, where there are far fewer buyers. Don't be afraid of offending, be afraid of overpaying...

We successfully bought under the OIEO when the market was last a little flat. You can only offer what you’re willing to pay

What @DrySherry says.
We had an offer under OIEO price accepted years ago in a slowly rising market.

It doesn't matter what anecdotally others have done - all that matters is how keen your particular sellers are going to be to move and how wedded they are that point in time to that price point. They may be up for it now, they may need a few months to get their heads around a lower price - you just can’t know till you try. My hunch is they definitely wouldn’t find £975k offensive or cheeky, but they may try to nudge you upwards.

10% under is pretty common now esp if the house has been around for 2-4 weeks and no offers and hardly any viewings. If you can wait it out, wait a bit and then make a 10% reduced offer. It means that no one wants it at whatever the seller is hoping for and you are setting its value on the market. You don't want to get into negative equity yourself if you buy the house too high.

I’d love to know any stats about offers being accepted at 10% under asking price - I’d say that’s very rare. It doesn’t mean ultimately the seller won’t end up dropping the price but mentally they need to get to that point first. And 2-4 weeks is nothing @cupcakesarelife - it takes that long for things to just get going after you’ve listed, particularly if you’re only doing viewings weekends.

it also doesn't matter what the seller wants. It's what a buyer is willing to pay for a house. For a lot of houses, that is £0 because many houses aren't even getting offers.

It might have escaped your notice @cupcakesarelife but what’s required is for buyer and seller to reach an agreement. Seller might be being unrealistic but there’s not much you can do about that, you can offer as little as you think it’s worth, and you could be absolutely right, but if the seller doesn’t agree then there’s no deal.

But if the seller doesn’t have to sell, they simply won’t accept offers that are below their red line. Establishing value takes two.

I wouldn’t be offended by an offer of 975k on a property just reduced down to 0IEO 1M -they are more likely to be happy to get an offer! However, they may well try to negotiate you up to 1M ( that’s what I would do). Up to you how you respond to that.

Yes it’s a 2way process, always has been always will be. It takes 2 to agree a deal, & that’s true whether it’s a Buyers or Sellers market.

Well it’s not really. At the end of the day, if buyers don’t want to buy your house then it’s worth nothing. It’s not a two way process if a buyer is who you need to make the sale.

I think £975k is too high for a first offer. I'd go £925-950.

In this case, the house is worth £nothing because sellers don’t establish the value. Buyers do. Always. A seller can think a house is x value as much as they want but if there is no buyer willing to give x amount, and the seller won’t move the price, then there’s no price set. It’s worth £0 because no one bought it. You can’t say a house is worth something if no one bought it. That makes no sense. Every house is worth £nothing until someone wants to buy it.

Well, without wanting to state the obvious, this is how markets work for.. erm.. absolutely everything. Neither the buyer nor seller alone determine the price, it’s at the point of agreement you have a sale.

Aanyway. I’d love to know how “common” it is for sellers to accept 10% under asking price and for that to lead to a completed transaction.

@ibelieveinmirrorballs -according to Zoopla, around 1/5th of sellers are accepting >10% discount and this is NOT taking into account reductions during the marketing period so it will be more if you use the initial asking price. I'm not sure how out of date their data is exactly because they won't know this at the time the offer is agreed. It could be many months out of date like the ONS data.

Thanks @rainingsnoring - dug around for the source and found it here https://www.zoopla.co.uk/discover/property-news/house-price-index/ - interesting reading for early 2024. I find that surprising but wonder if it’s across the board by value of property or more prevalent eg with cheaper houses. Still, more than I would have thought — thanks for sharing.

No problem @ibelieveinmirrorballs. It may be several months out of date (unsure exactly how they collect their data) and Zoopla, like everyone else connected to the housing industry, will tend to err on the positive side for obvious reasons.

@Ellabellabow just offer what you think it is worth, taking the local market and your personal situation into account.

Thanks for all of the replies everyone. It’s helpful to hear that people do consider under the OIEO price.

With respect @cupcakesarelife I feel like a buyer with your attitude is going to struggle to buy anything. It feels disrespectful to the seller’s property to suggest it could be worth zero just because no one bought it.

It wouldn’t be worth zero as it’s still a property people are living in, someone’s home. It would just represent a deal that couldn’t be done at that particular time. The seller may not be in any hurry to sell. They could reduce the price at a later date if they chose to or they could decide not to sell but that doesn’t suddenly make their house worthless.

It’s quite arrogant if anyone assume that buyers have ALL the power now. Equally it would be arrogant if Sellers felt they had ALL the power in a sellers market. People with this sort of attitude will struggle to buy or sell because the other side picks up on it and it’s a red flag.

I must be saying this for at last the tenth time, and I'm getting more 'direct' every time about it, but....
automatically offering 10% less (or any other nominal % less) because you perceive the market as going that way without regard to whether the house is already competitively priced, or even wildly overpriced more than that, and without considering the question of whether the region or type of house is going the opposite way to the general market ( they sometimes do) is just plucking a % out of your rear orifice.

Offer what its worth to you. Offer more and you're a fool, offer less and you run the risk of losing it to another buyer, or if you offer a lot less, because you annoyed the vendor. A house may be worth significantly more to you because it's in a village where your loving family lives and very few properties ever come up there. It may be worth less to you than to others because you have no kids and it's in a catchment for a popular school. It's what it is worth to you that matters.

And incidentally, @cupcakesarelife, if 20% of people are accepting 10+% less, that means 80% aren't.

that's ok. But I'm already in the process of buying something now. It's not an "attitude". it's just how a lot of people think about products and services they are paying for. a house is a product one buys. if i'm saying "meh" to most houses when i do a search on rightmove, i'm effectively saying i wouldn't pay a penny for this or that house. that's just the reality. if a house isn't selling, it means it's worth £0 until someone makes an offer. not sure why that's hard to understand or accept 😉

'Offer what its worth to you.'
Yes, this is fair rather than an arbitrary 10% off.

Because it’s wrong, that’s why. A house that you don’t want to buy has a value of £0 TO YOU. Fair enough. But it has a value to the seller of >£the lowest offer they will accept.

That’s why I and others encourage people to offer what a property is worth TO THEM, not some arbitrary percentage below the asking price, and definitely not insulting something that the owners value.