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.

Talking of being motivated, I did compare the EA who sold our last property to a starving lion chasing a zebra. But I must admit I said it with a hint of admiration.

@TiredCatLady Exactly this. The property we're keen on is a small 3 bed semi in a small town with no train station nearby, there's no driveway, 1 tiny bathroom, tiny 3rd bedroom which couldn't practically be anyone's bedroom long-term. It's up for £600k which seems insane to me? But that seems to be the going rate for any 3 bedroom home in Surrey, despite the slump in the housing market.

Only a loon wouldn't make an offer first. I'd go low.

Surrey prices are crazy but it's banker commuter territory so that's the way it is at the moment, at least.
Are you FTBs or do you own somewhere? Are you able to say anything more about your current living circumstances, job security, etc. Why do you need/ want to move/ buy? These things should make a big difference to your decision.

How long has this particular house been on the market? And how long have you been looking? It sounds like you don't like it that much?

If you want it for 570k, and it's been on the market for a little while, I'd put in an offer of maybe about 560k, and expect to be negotiated upwards. If it's relatively new onto the market (e.g. went on post Christmas), I'd put 570k on the table, and without going into details, say that you feel that on viewing it didn't quite match up to the listing. If they reject or come back with a price that's too high for you, then I'd continue viewing but make it clear your offer is still on the table.

I think if there are major issues with the garden/kitchen, then most viewers will see past the instagram decor even if that gets them through the door?

Is the layout especially unusual?

I’ve never heard of this being a thing. We’re selling and buying right now and the estate agents who valued our house all quoted their fees as a % of the final sale price.

Your post just made me worry I’d somehow misunderstood but I’ve checked our contract with the EA and it clearly says we’ll pay a percentage of the final sale price.

So yes, it’s probably true the EA gets more commission but it’s all relative given their fees are usually around 1-1.5%. A good EA will understand that sometimes a lower offer may make sense. We’ve accepted a lower offer from a chain-free buyer.

When listing my house, I listed it knowing I'd take 10k-15k less than asking for the right people (first time buyers, people who have already sold). When someone put an offer in on my house they asked for 20k under asking, and we negotiated and settled for a reduction of 8.5k. That gave us buying power, they were first time buyers and it fell within a price that we were happy to accept.
People won't be offended if you offer a bit too low, as you need to gauge what you really do want to spend and what they would actually accept. Unless they have people beating the door down with hundreds of offers, just try your luck!

What have similar, nearby properties recently sold for? I'd look at that first. And probably start at 10% off of asking...

Is it normal to offer under asking price

We have recent offered on two places

One was £10k under the asking price. EA is adamant the sellers want full asking

But is that common? It doesn't feel like houses are flying off the shelf in our area at the moment

@artfuldodgerjack The street is small (20ish houses) and a mishmash of different properties, anything from 2 bed terraces to a couple of 4/5 bedroom detached houses at the end. So it's tricky to gague. The last 3 bed semi to sell on the street was in Jan 2020 and it went for 475,000. In neighbouring streets, a few similar-ish 3 beds sold in mid to late 2023 for 500-550.

I’ve never seen an agents contract based on the initial asking price, rather than the final sale price.

I suppose it’s not impossible, but to suggest it’s usual is quite a stretch!

I think it really depends on the property and how it’s priced in the first place.

We accepted a lower offer from a chain-free buyer. We were priced reasonably enough to get lots of viewers through the door, but felt it best to take a reasonable offer and not hang on for asking price. I think some people make that mistake and end up having to reduce anyway to drum up new interest.

On the flipside, we offered full asking price on our onward purchase - it’s very reasonably priced and everything we want, we didn’t want to risk losing it, and the seller had turned down lower offers.

I’ve bought and sold several times and never heard of it either. If it is ever a thing, it is rare.

How long has the property been on the market? If recently added, the sellers might resist a low offer. But surely, the worst that happens is your offer is declined.

Make the offer, see what happens.

Good luck! Hold your nerve. I think with house buying you need to stay focussed on the fact that there are lots of houses out there and not get too emotionally involved with just one - which can lead you to offer more money with the fear that you’ll lose it. It appears to be a buyers market out there. The houses round here are not selling quickly, and most of them are reduced after a few weeks of (I assume) little interest.

I think it's expected to get some lower offers. We very recently sold our house - it had only been on 5 days and we got 2 offers 20K less than the asking price (nearly 10%.) We said no to those and managed to negotiate, but definitely were not offended at all at the offers as it's expected in this market. Why wouldn't you try and go in lower, you never know, they may just accept?

So last week we offered on a house: only £10k under asking. Less than 2%

The EA was horrified. Pushed for full asking and then begrudgingly said they will put the offer forward and not to expect any news for another week:

A few days later; EA called me and strongly pushed me towards upping my offer.

I didnt. I can't !

Today the EA has called and thinks my offer is a very good one and is strongly recommending that their client accepts

The tables have now turned

Offer under then take your time going back. You don't need to explain your offer or otherwise engage. You pay what YOU think it's worth.