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.

Don’t agree and I’ve bought 6 properties and sold 5.

Have experienced buyers markets and sellers markets. Have always got a slight reduction off the asking price but not always 10% or even 5%.

Just because people have different experiences to you doesn’t make them wrong. It’s standard to offer below the asking price in the majority of cases but 10% under is too much of a blanket approach. Every situation is different.

I offered £275K on a house that was marketed at £285K. Offer was initially refused then they got back to me a month later to accept.

I should have knocked down another £10K at least as the house needs a lot of work.

My point is most owners/estate agents often have unreasonable expectations so stick to your budget.

'And if all the houses you are looking at are "overpriced" then it could be your understanding of the market that is at fault?'

It could be the buyer's understanding is at fault if all the houses are actually selling within a reasonable time frame. However, it could also be that the sellers and estate agents don't understand the local market and how much it has changed since '22 and are globally over pricing. I've seen several comments from sellers on here who can't sell who say 'nothing is moving locally'. That is clearly the latter situation.

Sellers aren’t being grabby, they’re asking for what they want. They don’t have to sell to you, and I lots of cases don’t need to sell at all if they can’t get what they want from it, especially in the family houses where the house is probably big enough to stay in a bit longer, or when people are looking to downsize. Lots of buyers seem to think they’re owed the houses at lower prices but they’re not, it’s the sellers house and they don’t have to.

You do get some daft suggestions on here and offering 375k on a property listed at 450k sounds like one of them. Unless the property in question had been on the market for ages without offers or was in a terrible condition. Even to offer 400k would have been more than 10% under asking!

In which case...nothing is moving, so you can't buy in that area just now. If all the houses are overpriced, and no sellers are accepting offers, then nothing is selling. In which case you just have to accept that and wait until the market changes, but be aware you will possibly end up paying the same when that happens, but maybe feel better about it.

Over the years I've seen a lot of people get very frustrated that houses are "all overpriced", but rarely has the market fallen to meet their expectations.

It depends upon the area, the seller and their situation, the current market conditions. I think its perfectly acceptable to make and offer and its perfectly acceptable for an offer to be rejected. I know someone who told me that if an offer was so low then they would refuse to negotiate with that person even if they came back with another offer which I found very strange.

In addition to all the good points made above , you have to remember that the vendors tend to consider not just the price but the likelihood and ease of the sale going through. If I were a seller who had priced sensibly for the market and a FTB came bounding in offering 10% or more under my asking price I’d probably think they were going to be too much trouble, even if they later offered nearer the price I wanted.

Depends how much you want THAT house and how pissed you will be if you miss out.

If it’s something unique and you really love it I have always gone with the offer as much as you are willing too.

A first time home probably doesn’t fit in that category from a psychological regret perspective.

An issue with the first rung (the lowest price band in your area) is that you’re not just competing against other FTBs but also landlords and developers. This will inflate the price due to demand and sometimes it’s better to save more and try to skip a rung.

I don't know whether sellers are accepting offers in these markets, some probably are, those who really need to move. I was only paraphrasing what I have seen several sellers write on here when they are struggling to sell. There are times when it is the sellers not the buyers that will become more realistic as some of them will need to sell and most buyers simply can't afford the prices now. As I already said, in my area, I have seen much more rapid reductions in the last month or so compared to last year and several houses have been relisted from last year at significantly lower prices. This is combined with a large increase in supply. Time will tell what happens and it will vary by area/ type of house.

When I bought my first flat in London 27yrs ago - and still there - I loved it and really wanted it so I offered the asking price and it was accepted straightaway . Survey was ok .

I sold my house late last year, and ended up at 3% above asking with a small bidding war. It genuinely surprised me. The house we're buying, however, is in a completely different area, and the vendors dropped their price 5% before we came along. It was still slightly out of reach for us, so they agreed to another 5k off. They'd already lost a buyer and we were ready to proceed, committed to the purchase, etc etc. There are 3 other houses on that street we've viewed since last summer that still haven't sold. Those owners aren't dropping their prices, though. They all seem determined that their houses are worth more than what buyers are willing to pay. It's strange!

I think you both chose your properties well and were very lucky with your timing. Young people nowadays are nowhere near as fortunate as houses are now far, far higher relative to income, rates have risen considerably from 18 months ago and so the current prices are simply unaffordable to most without very high incomes/ large parental gifts or both.

Yes some people have been disappointed that the market isn’t falling by the huge amount that Rainsnoring presumably hoped it would- based on the prediction of that YouTuber he always mentions who thought prices would fall 35% in nominal terms between 2022 -2025.

Charlie and his supporters thought we would see a housing price crash by now but what we see instead is a stagnant market in most parts of the country.

Twiggers, why does MovinghomewithCharlie trigger you so much? Every single time his name is mentioned, you jump in immediately. You obviously don't like him which is fine but others, especially FTBs, have found his advice extremely useful. Live and let live, Twiggers!
I know you also get triggered by my posts so, for the third or fourth time, stop reading, quoting me and replying!

I can’t believe you’re still promoting him @rainingsnoring when it’s so obvious now that prices won’t fall by anything like 35% between 2022-2025.

I can hardly avoid reading your comments when we post on the same forum, same as you can’t avoid reading mine. And sometimes it is pertinent to the discussion for people to know that you take an extreme position re house prices crashing. It’s strange that you think you can tell people what to read & what to say on a public forum. Nevertheless I won’t be responding to your comments any further on this thread.

I do know what you mean OP. We’re selling our house in London & because we’re really keen to move we’ve accepted an offer 15k under. We’re buying in Kent commuter belt (similar to Surrey/ Sussex in terms of desirability) & the houses around there seem to be priced far less competitively. Saying that they are often coming on & getting reduced by as much as 50k in some cases. I guess it just depends how much the owner wants to sell. An agent did tell me that prices are set as much by the vendors as the agents & some people get attached to getting a particular price.

As people have said it depends on a variety of factors and can vary from area to area within one town.

Where I am houses that need work are generally sticking but there are exceptions as one went on the market recently which is huge and a money pit but had the potential for a building plot in the garden and could be split into flats and it went very quickly.

Pretty much exactly a year ago we completed on the house we are in now at 10% under asking. It needed a lot of work as decor, kitchens and bathrooms hadn’t been done since the 70s but it was well maintained, lovely road and garden.

Probate sale and the people selling decided to retire with proceeds and were pragmatic and we were chain free as had moved areas and rented. Previous purchase was approx 10% below asking. Most recent sale in 2022 we accepted 10% less than first offer which fell through as first person couldn’t port mortgage and a probate sale I was involved in we accepted about 10% under the first offer we had which fell through as the one of the owners died just before exchange and we had to get letters of administration for her and first buyer understandably couldn’t wait.

A friend is looking to buy and hopefully has a viewing today and I would expect her to potentially have to pay asking or over as house is in area that has picked up recently and the house is in good condition . So it just depends massively on the situation.

Agreed. It’s just not a thing here.

15k under asking is presumably very small as a percentage of the asking price?

Lucky with our timing or wise?

This is why I hate the blanket advice of "offer under, 10%" etc that some people seem to chant like it's a hard and fast rule.

It depends entirely on location, market, condition of house, position of buyers, position of sellers, and a million other things beside. Where I live for example, properties all go to best and final and routinely go for 10%+ over asking.

People who say you can always offer under usually have no idea what they're talking about.

It's very situation specific. When I purchased a property in 2011, I offered significantly under and the seller snapped my hand off. I bought my current property in 2022 and the seller did not accept asking price, I ended up paying £5000 over. Remember, most sellers need a certain amount for their onward sale. I'd imagine if you've been looking a while and all offers have been rejected, you need to manage your expectations and find a cheaper property.

@Twiglets1, yes very true which is why we accepted. I suppose the issue we’ve had is that at the other end sellers haven’t been keen to accept offers under, they’re happy to wait which is understandable. So we’ve lost out a bit there but we can fortunately take the hit.

It makes no difference at the moment. We accepted an offer of 5% under asking on our house which we thought was reasonable. Fell through at exchange as buyers 'weren't feeling it anymore'

I really don't know where this mantra of 10% under came from (probably the internet) and the 'need' to renegotiate after a survey for obvious things such as blown double glazing which is apparent in the viewing but this is why houses are always now 'overpriced' to account for this