Offering under doesn't work

[Peachyroll]

A lot of advice on here strongly recommends always offering under asking price by 5-10%. And lots of people here say they get these kinds of offers accepted all the time.

Am I missing something? Currently looking for our first house and none of the owners will remotely entertain accepting anything less than (sometimes hugely inflated) asking prices. Even a house we recently saw that had been on the market for 4 months, with hardly any viewings and no offers. Needs some work and modernisation. We offered 6.5% less than asking price. The owners rejected and said they're still holding out for asking price.

For context, we're looking for a house in Surrey/Sussex commuter belt so appreciate it's a more desirable area.

Yeah I found the same thing, again in a very desirable area, we started at 5% below, immediate no, they wouldn't even bite at less than 2% below and had to come up to asking price in the end (they were hoping for above asking price really) the house is cosmetically dated but bags of potential.

I guess its just the area, I feel we probably offered maybe 3% more than I thought it was really worth, but I think someone else would have come along and offered asking price eventually as we have alot of London wfh hybrid commuters inflating the house prices in our village, especially since Covid. EA mentioned Londoners just come straight in at asking price all the time as even though its not a cheap area when a Londoner's just sold a 2 bed flat and can get a detatched house here for that they think its a bloody bargain. 😬

The thing is, it's not an exact science. Yes, people may suggest you offer under but the sellers are individuals and have their own property to buy, situation etc which will influence what they accept.

Purchasing a house does not always mean you have to offer under the asking price, there is a price the vendor is willing to accept, and a price the purchaser is willing to pay - sometimes this is the asking price, other times lower, sometimes even higher.

Yes vendors hold out for asking prices when they are unlikely to achieve it, but equally purchasers feel they must get a discount on the price, normally stating the property is over priced. If it is the house for you, then pay the asking price. Just as many vendors lose purchasers by not budging on the asking price, and equal number of buyers lose a property because they continue to offer under the asking price.

Everyone wants a bargain of course, but unless buying as an investment, it is a home people are buying and emotions are involved, for both the vendor and purchaser - sometimes heart does have to over rule head and the asking price is agreed to secure a future home.

Any house is only worth what someone is prepared to pay. Offer what it's worth to you. There is no hard guidance. Besides, you get another chance to negotiate when the survey is done.

Not around my area! Things go within 2-3% of ask if not at ask. But if those sellers are in no hurry then they're in no hurry! Must be frustrating for the agent though.

There’s been a trend over the last 10 years or so for perfectly normal people to have some sort of personality change into hard-nosed negotiators when it comes to house-buying.

Back in the day, you’d put your house on at £175,000 (for example); buyer would offer £170,000; you’d agree; everyone happy. Occasionally there’d be a bit of back and forth and it would go for £173,000.

Now, all the buyers think they have to drive a hard bargain and start with an offensively low offer. Vendors know that’s going to happen and start with too high a valuation.

I don’t know whether it’s Kirsty and Phil or Dragon’s Den or just the increasing graspiness and aggressiveness of our society.

Here’s my advice. Be very well informed about the local market. If it’s a buyers’ market you can offer under; if it’s a sellers’ market, you can’t. If you’re going to offer under, don’t go rude and silly low. Work to be done/modernisation is in the eye of the beholder. The bathrooms and kitchens that are in fashion this year will be out of fashion when you come to sell yourself.

I think it also has something to do with house prices being utterly ludicrous @HeddaGarbled . Also owners are grabby too. A 3 bedroom house we looked at recently was up for sale for 150k more than it sold for 3 years ago. The owners had hardly done any work to it in that time apart from painting the living room and updating the bathroom (and removing the bath in the process 😭). The kitchen was at least 20 years old and tired. In the current climate that's an outrageous ask. The area is not THAT desirable!

Also I've noticed on more recent episodes of Location and other property shows that owners are not accepting under offers like they always used to either. In fact in the newest 2 episodes of Location the participants who bought the properties Kirsty & Phil showed them all paid asking price.

I think in the current market with high interest rates people can't always afford to drop the price.

I think it depends where you live. We're lucky enough to live in an area that doesn't seem to be as affected by fluctuations in the property market and is very cheap. It's very rare for homes here to sell at asking price let alone above it.

Even a house we recently saw that had been on the market for 4 months, with hardly any viewings and no offers.

How do you know what? I guess 4m can be seen on RightMove. But how do you know barely any viewings & no offers?

6% is a lot!

We recently got 3% off the asking price for a house that was on the market for a year.

We're selling at asking price and wouldn't have accepted an offer at all. We priced to sell (as knew we wanted our house) so already priced relatively cheaply and sold before it even hit the market.

My advice would be to not play games. 4 months isn't a long time in today's market and everyone knows house prices will recover in the next year or two, so if you love it, go in at what it's worth, whether that's what they're asking or less.

@Peachyroll there are indeed a lot of grabby sellers asking for unrealistic amounts at present. I've seen a number of houses where they are asking a 15/20% increase in a couple of years of ownership when prices have fallen during this time, even according to the official statistics, and when buyer's budgets are much tighter. There have been lots of similar threads on here where the sellers can't seem to grasp that they can't just add 10/20% in a falling market and expect to achieve a sale. They are just deluded in the main and are putting people off.
I guess you have encountered a lot of these type of buyers so far. There are some who are somewhat more realistic though. In my area, for example, the reductions have tended to be very slow in the last 18 months but recently they seem to be reducing much more rapidly. I've also seen several houses which were on the market last year at kite flying prices come back on lower or reduce rapidly this year.
You just need to keep looking and only offer what you think is a reasonable and obviously comfortably affordable price. You will eventually find a more realistic seller. Definitely don't rush in and feel forced to overpay at present. Take your time, perhaps buy at the end of the year when prices tend to be lower or even next year. Of course, it does depend on your local market so if others are paying the very high asking prices that would be different but it doesn't sound as if they are from the example you have given.
You might find this useful: https://otta.property/trends
He charts direct from the land registry sold prices. It is a good 6 months behind because of the lad in updating the LR.
You might also find moving homewithCharlie on YouTube useful too.

You probably sold because you priced relatively cheaply. Possibly your local market is moving better too. By contrast, any sellers are kite flying and buyers are simply not willing to engage at these prices so 16% or 20% off might be more reasonable in these circumstances.
Also, it is wrong to state the 'everyone knows house prices will recover in the next year or two'. It's wrong and also dangerous advice to give.

It's the area you are looking in. If they have a place in a desirable area on a commuter belt then they'll be getting a lot of interest and someone will likely pay the asking price. They're not going to sell it for less than they can get, why would they?

People on here give this advice all the time and it's absolutely not true where I am!

We're selling our house at the moment. Our listing price has already taken into account the change in the market since 2022. Houses are selling very slowly here, but are getting list price (or maybe 5-10k under but nowhere near 5% under).

The market is so unpredictable at the moment that no one is going to take massively reduced offers unless they're desperate. Everyone else is probably like us, and has a figure in mind they'd sell for and will just not move if it isn't met and try again in future.

The market feels a bit weird. Some places still hot, some places are like 2010 when we first bought - lots of people haven’t figured out that prices have to fall because of interest rates and CoL. in 2010, people were stuck after the 2008 crash and couldn’t/wouldn’t accept lower prices.

@Peachyroll same and in a similar area. A lot of properties need (significant) work to boot. Also vendors who are expecting a 20-25% uptick in price in 5 years having done absolutely nothing to the property, I mean, not even decorate. (Rightmove and zoopla being able to see the purchase history and old listings is really eye opening…).

It does work sometimes, but you just have to offer what you can afford and think the house is worth, and move on if the seller doesn't bite. If someone has greatly overpriced their house to begin with then they are unrealistic, and you know that before you offer, so be ready to move on immediately.

Where Mumsnet does tend to be misleading is in suggesting there is a "right" price, and if you are cunning enough you can get the house you want at that price. There is no "right" price, only what both parties can agree on. And if all the houses you are looking at are "overpriced" then it could be your understanding of the market that is at fault?

So they didn't sell, and prices stagnated, and then went roaring up again a few years later. Very often the market doesn't drop, it just stalls and you can't make it drop.

Yes you’re missing something.

What you’re missing is that there isn’t one single housing market. There are lots of different markets depending on what region you live in. Sometimes even within the same town there will be desirable areas and not so desirable areas. So there are no rules that apply to every property. If a good house comes on in a good area and it’s realistically priced to begin with, there will be little point offering 10% or even 5% below - the owners would rather wait as they know their property will attract a lot of interest so it’s just a case of waiting it out for someone who can afford it.

In some areas properties are still selling well and getting asking or close to it, in other areas the owners are struggling to sell especially if the property has something off putting about it such as a busy road, a short lease, rotting windows, poor decor, etc. If a property has failed to sell after a few months then it is reasonable to assume it is overpriced for the particular area and condition of the property - in that situation the sellers logically should reduce the price & be open to offers. However, house sellers aren’t always logical because house buying & selling is an emotional as well as purely business transaction.

DH and/or I have never paid the full asking price but our buyers have or very close and always within a week. The key is to sell a pristine house, in perfect structural order and in a good location within a 10 minute walk of the tube/station - sell a lifestyle (wanky I know) and to buy a shabby property that needs a new kitchen and bathroom(s) and for its walls to be stripped, lined and painted but structurally OK. Your own position needs to be sorted, mortgage offer in principle in place, firm chain behind you that has been checked out and all offers subject to a full structural survey which often provides room for negotiation.

Flat one: shabby and a bit grubby in a buyer's market. I was a FTB, mortgage in place. Just under 10%. Early 80s

House one: as above but less of a buyers market. I had a buyer with no chain behind them. They and I had mortgages in principle. About 6% Just before the late 80s boom.

House two: redeveloped by builders in an area under a lot of redevelopment. Initially came on toppy. Beyond budget, hearts were sold, carried on looking for 6/7 months. Agents called us to say developers were about to call in the receivers and were we still interested - we had a very saleable house. 17%! Early 90s.

House three: perfect location, huge potential, probate sale and had been on for six months. Paid 12% under asking in 2015 so a pretty boomy market. However it was overpriced, needed a complete refurbishment and we were cash buyers.

Totally agree with @TheYearOfSmallThings that if buyers are saying “everything is overpriced “ in their particular area then they are possibly misunderstanding their market. They are putting too much emphasis on what they feel properties should cost over what they actually do cost.

Logically they can’t all be overpriced for the area as long as some are selling. Although individual properties may be, of course.

I also roll my eyes at it, I’ve bought six, and the daft advice people come on with is mind boggling. Ten percent is standard, irrelevant of asking price, desirability, market. Fairly sure these folks have limited to no experience.

I recently offered full asking price on a house that has been on the market since September with only 2 views and is being the only offer. They came back wanting 10k more...

Every situation is different, location, individuals, finances, whether you've found a property you're desperate to move into or not.

Around here, people make offers but not something like £375,000 which someone suggested on here against a doer upper on market for £450,000, more like £430,000 then have to increase.