I'm too scared to offer under!

[Monsteramash]

Me and DP are looking to make an offer on a house we saw today in Surrey. We'd like to offer 5% under the asking price because compared with other properties in the area we think that's what it's worth. (We've seen a few similar houses in the same street too). It's decorated very Instagram so think it may be sought after. The owners have done a nice job of staging the property for photos, but on closer look, it's a bit shabby here are there. The kitchen is 12+ years old, very 'well loved' and the integrated appliances are all busted. The bathroom is nice, but the smallest we've seen. The garden has been neglected for a while and has a patchy lawn, broken fencing and an ugly crumbling concrete area that wasnt visible in the listing photos. It needs all new double glazing and a new front door too.

Is 5% under (basically £30k less than asking price) a wildly unreasonable offer, and are these valid reasons for offering under? I'm terrified the EA/owners will think it's a cheek we've offered less and will rule us out as buyers. Or someone much wealthier has offered well over. It's hard to determine what the market is like locally because the EAs keep spinning us stories that the market is busy and we need to act fast and with a high offer etc etc. But anecdotally we've heard things are a bit slow and people are offering less for properties. And of course nationally in general, house prices have stagnated/fallen recently.

Offer low and then increase.

I offered on a property and started low. Got it for £8k under the asking price.

Stop believing the estate agents and do your own research. They are likely to be talking the market up when the great majority of areas are seeing falling prices and a massive fall in transactions.
Follow the market in your area. Are houses actually selling? How does this house compare to others (including work needed too)? How many houses are on the market/ coming onto the market?
Only offer what you think it is worth and don't panic about missing out. There will be other houses. It is a very bad time to over pay at present, with further falls expected.
Have a look at MovinghomewithCharlie on twitter/YouTube for more independent than your local agents give.

Thanks @rainingsnoring yes exactly we're very concerned about overpaying at the moment. Ultimately we're happy to have a home to live in where we can afford the mortgage, and not looking or expecting to make a huge profit in property right now. But definitely can't afford it to lose value over the next few years.

The Estate Agent works for the seller, the more he sells the house for the more commission s/he gets !

Offer what you want to offer, the if needed offer what you can actually afford. Don't forget to budget for a new kitchen etc. if that is something you would want/need to do.

and of course when you put in your ( 1st ) offer you point out the list of things you feel need doing.

In that case, I would probably bide your time and not rush into anything right now. Definitely don't over extend with a mortgage, overpay and regret it in another year or more. Definitely don't believe the agents, believe what you see yourself.

We can afford the asking price, otherwise we wouldnt have looked at it, but we'd really need to get the kitchen done, including a new oven, fridge freezer, dishwasher and washing machine. Front door and windows will likely need replacing immediately. Garden needs rescuing before it becomes a quagmire. Also other houses we've seen at a similar price point have had driveways, but this house has hit or miss street parking. They've all been modern, well kept houses of a similar size, give or take, just not quite as 'trendily' decorated. (It's not really our taste but know some people will love it). For us the downstairs layout is what we're keen on. Both of us could have separate work from home space that's separate from the living space.

You can afford the asking price PLUS everything you need doing to the property ?

@OlderGlaswegianLivingInDevon Able to pay the asking price, yes. Probably not able to pay the asking price (which is inflated) and at least £30k worth of upgrades (double glazing and new kitchen). From the photos the kitchen looked fairly new and in good condition and is described as a 'high standard, stunning kitchen/diner.' We viewed it thinking the kitchen would be good for a few years. It's actually quite grotty.

Maybe we could afford it at a stretch, but I don't love the house THAT much, and don't think it would be a good decision to fork out so much.

Offer under and say the particulars were misleading as the kitchen is dated and definitely not high standard or stunning

You don't need to give any justification for an under asking price offer, In fact, it might annoy the sellers.
If I were you, I would seriously consider waiting a while in any case and definitely not over paying if I went ahead.

Thus you make you offer taking into account what you think needs doing ( and the cost of it )

and you submit your offer saying you are offering xyz because the house needs xyz.

Offer whatever you want but don't try to link it to improvements you'd want to do to the house. It just irritates sellers as the price would obviously be higher if it was completely renovated.

It’s absolutely fine to offer 5% under though I wouldn’t be listing your reasons why as they could just argue back & that’s pointless. The EA should have taken everything into account when they did the valuation. Having said that, EAs do often overvalue to win the business & few Sellers in today’s market expect to get an asking price offer.

Ultimately, if the market in your area is particularly good and the Sellers believe they can get more for the property they won’t necessarily accept your offer, but you don’t know until you try. And of course you should never offer more than you are comfortable paying or than you think a property is worth compared to others in the same local area.

Offer under and don’t bother giving reasons.

Some sellers and estate agents are in la la land at the moment. Around here (also Surrey) you’ve got quite a lot of people who moved from central London during lockdown and paid far too much for their properties. A couple of years on they either can’t afford the remortgage or the commute is an issue/property doesn’t meet their needs, they need to move and they’re asking daft amounts. Think £550k for a tiny two bed semi with no parking.

Some have been on the market for almost a year now and just aren’t shifting, those that are, are going after they’ve been reduced or for below the asking price.

Totally agree with this. Honestly, as a seller you’re really not interested in being told what a random stranger believes are a list of shit things about your house. You say it needs new double glazing and kitchen - but they’ve clearly been living with it as it is perfectly adequately.

I think you should be honest with yourselves - you, like all buyers, want to feel as though you’ve got a good deal. In this instance you can afford the asking price, but you want to feel as though you’ve got a good price - which is understandable and reason enough!

Offering 5% under is completely standard as a first offer and NO seller will be offended by it. What they will very likely do however is reject - because sellers tend to assume it’s not your limit and will try to get more. Very few sellers in this market list at the price mentally they assume they will obtain. If this property is £600k I reckon they’ll be happy with something in the region of £580-585k (depending on length of time on the market - if it’s been on a while they may accept less).

You have two choices - you can bid £570k and expect to be nudged upwards, or you could for example be bold and offer a “best and final” offer of your choosing - but be prepared for it to be rejected. Don’t try and play clever games is my opinion - just accept both buyer and seller are looking for what each considers a good price - and all that needs to happen is for those expectations to match.

You don’t sound you like the house enough to buy it. I’d keep looking.

I think the parking issue would bother me the most. I sacrificed parking/garage to purchase a large Victorian villa,it’s not on a busy road but at times parking has not been easy, and frankly there are times when I wish I’d purchased a modern detached box with garage and drive!

Don’t get carried away with the inside detail and styling, particularly if, as you’ve noticed, it still seems to need a lot of money spent on it. What would one of the other (cheaper and with parking) houses look like if you spent a similar sum on it (kitchen/appliances/windows/doors etc)?

The Estate Agent works for the seller, the more he sells the house for the more commission s/he gets !

Not true the contracts are usually to asking price and not the sale price - which is why you are told not to go with the highest value.

"the EA works for the seller"

I disagree as in our experience both as sellers and buyers the facts we noted were. EA work for themselves - they need a sale to earn money and are aware of who can buy quickly and are serious and then persuade the seller to accept.

Anyone that feels its different, do let me know.

When somebody starts comparing the price of my house to other houses when they put in a lower offer, I just think they really want my particular house, As a seller receiving a lower offer I would think ‘well why don’t you want one of the other houses then’. Having said that you could always say the buyer may have a preference to my house but maybe finances are tight so they would go off and buy another house and then you lose that purchase.

Our estate agent told us that they aim for 95% of asking price so they will aim to get buyers up to that and negotiate sellers down to that if needed. Obviously they want the most money they can get so if you offered 95% but there were lots of viewings still to come they would probably advise the sellers to hang on and see. But if the property had been on for a while with little interest or you are in a very good position (no chain etc) they may persuade the seller to accept.
I wanted to point out also that if another person makes an asking price offer they may not necessarily get the house, the EA may come back to you and explain and you might have the opportunity to increase your bid and also push any favourable circumstances you have.
Good luck and let us know what happens!

I take your point but would just comment that they work more for the Seller than the Buyer. Although I must admit, sometimes as a Buyer I have been a little shocked by the over sharing of information they have revealed about the Seller (like " I know for a fact they are extremely keen to move fast so may be open to a low offer") which I think the Seller would be horrified to overhear.

Mainly they are just very motivated to get the deal done, but I like that quality in an Estate Agent 😀

I know, it always makes me smile on Mumsnet when people are justifying making low offers by saying there are better houses selling locally for a cheaper price. The obvious answer is - buy one of those houses then! There must be something about the property being discussed that makes it more appealing than the others to the potential buyer.

That's why I would just offer what I think a property is worth or what I can afford and not try to justify the price by comparing it to other properties that are cheaper in the same area.

Thank you

"motivated" - peronally, I'd put it a bit stronger than that

Yes, the comments of what they can share with you art times - just imagine you on the other side next time, same applies. So, EA IMO will do whatever they can to get a sale and not always the best result for, often the seller.

EA are really good at pressuring people and making them feel guilty. Especially those with years of experience, EG, "why are you buying...you'll never end up buying one...prices are going up...bs-bs-bs"

Remain strong, remain focused

Caution adivsed. No one can exactly predict anyhting inc house prices - It is diffuclt to price a hosue on a road with different types and sizes of property. Proty that looks the same is often not, EG, access/parking space bigger/smaller as well as garden/extensions/etc and having the living room south facig etc etc - being on a corner plot, I would never recommend it unless putting on rent etc as its more prone to break-ins/vandals/antisocial behaviour

Btw - we can all regret missing a property when it goes off the market and in hindsight should have offered more/etc

If you really loke the plot and can see the potential, go for it as its your home and often people dont move for at least several years.

When selling if market has crashed, so will be the next place you are buying

Alwys try to by in the best location possible within financial abilitiy and work upwards on that