What is a reasonable offer?

[DownaDarkDarkStaircase]

Hello, I would welcome opinions please. (I have only ever bought one house - a new build - so no real experience of negotiation and chains. Fairly naïve about this kind of thing).
I have seen a house I would love to buy. It is valued at £640k. Four years ago it was bought by the current owners for £485k. They have added a beautiful new kitchen and bathroom. Still, that is quite an increase in value (maybe normal however, relatively speaking). What is a reasonable offer? I think 600 may be offensive but then again, that’s only 6% under the asking price.
I fully appreciate someone could just offer the 640 and that’s that but I’d like to try and get it for a little less if possible. It’s been up for sale for two months which doesn’t seem long at all.
what do you think?

It's not been up for long. 6% isn't much off the price and you could offer, but don't be surprised if they are hanging out for the asking price.
As someone else suggested on another property thread, don't go in at an even number, pick an odd amount and say you've done your sums and that's what you can afford.

I think that sounds like a reasonable offer. Is that your first and final offer?

600 sounds good

You haven't really given enough information here. Ignore anyone who comes along and says a blanket 'x%' discount, as it depends on a lot of factors a lot more locally.

Despite what some say, the market is thrivibg in some areas and stagnant in others.

What is the market doing in your area? Is it slow, or fast paced atm? How long has the house been up for sale? Is there kuchnon tbe market locally? What are comparative houses in your area selling for? What is your position (a cash buyer may get a bigger discount, for example)?

If houses are going quickly at asking, there is no point in going under. If they are stagnating, then there is. You can certainly offer lower and see what happens, but ark yourself with information to help understand the dynamics and what might be accepted.

Lastly: if you arenin Scotland, disregard the above to some degree and get advice from people who understand the Scottish system...

What they paid for it is irrelevant. Markets change all the time.

600 sounds very low given the asking price. Is that all you can afford? If so then you can offer it but expect to get rejected.
of you can afford more then it depends on how much you really want the house, and your own situation, have you sold etc.

If you really want it, and can afford it, an offer closer to the asking price is more sensible.

This is a personal view, but I would be irritated by a buyer making such a low offer, and unless I needed to move quickly I would be looking to sell to another buyer. Not everyone would take this view though.

You're right that 2 months isn't that long in this market.

Thank you everyone and good tip about offering the odd number @Blueuggboots
I don’t think what they paid is irrelevant per se - I think it’s just one factor of many.
I'm not sure about the market locally although having said that, I am on rightmove all the time and a lot of houses have been up for months and then reduced. The house is in a lovely area, only 15 mins away but nicer than where I live. In comparison, my new build house has increased by only 50k in 6 years.
I could afford more in principle but the repayments would be too high for us to have a decent quality of life.
I am not in an ideal position as haven’t sold my property yet. Just gone on.

If you would be happy at 600 then go for that. You need to feel comfortable with your offer in this uncertain market.
It's worth bearing in mind though that a lot of sellers can't afford to sell if they don't get X price. That doesn't mean the house is worth X though - just a reflection of the individual sellers financial situation due to the higher costs of borrowing. Its happening a lot which is why you see so many homes sticking on the market at present.
An offer 6% under is not going to offend, its a strong proposition.

Have you looked up the valuation on Zoopla? You think it's worth less because it's gone up a lot since they bought it but maybe it really has. My house is on for £650k, Zoopla put it at £663k. I wouldn't entertain £600 personally and might try and negotiate you higher or maybe would think you're a time waster and would be a pain further down the line even if you then came back with a higher offer. I'd personally think anything under about £625 will definitely get rejected unless they're desperate (unless of course Zoopla has it valued at a lower amount)

Also just seen you haven't sold yours yet. Sorry but I really don't think there's any way at all they'll accept such a low offer and wait for you to find a buyer. You can try by all means but it will almost definitely be a no.

If you haven't sold, there's no point in offering IMO. You're not proceedable.

Once you have sold yours, 600k would be a decent offer.

But until you sell yours, you don’t actually know what you can afford as you may end up having to accept a big reduction on your property (not saying you will, just that no one knows at this stage as you haven’t sold yet).

If you haven't sold yet, best thing to do is go back and say you really like the house and when sold, you'll be making an offer. Keep in touch with the agents in the meantime, ie every couple of weeks to still express your interest and ask if anyone else is interested - that'll be fed back to vendor and they'll know you're serious.

If it hasn't sold in the meantime, then certainly offer £600k, but they're probably come back and ask for more (most people will do that unless they've got the asking price).

Itsrainingten asked "Have you looked up the valuation on Zoopla?" Personally I wouldn't bother; Zoopla is very inaccurate. I know of two flats, side by side in a small block, exactly the same size and orientation, same number of rooms etc, no difference between them. Zoopla values the one in better condition 15.5% lower than the other.

This is the best advice on this thread imo.

We found our house before we were proceedable, viewed and offered, but were rejected (fair enough, we weren't proceedable at the time!). They accepted a different offer after we became proceedable, but we kept an eye and it certainly back on the market a few months later. Because we were already known to the EA and had seen the property, and because they'd lost several months due to a fallen through sale, they accepted our lower offer happily.

House buying requires a LOT of patience and luck.

*came back on the market, not certainly

Not sure why I can't edit!

OP,

I agree that you need to be in a better position, ie SStC, to make an offer. I would say 5% would be the lowest I'd go for and if I was selling in this market fpr 640 I'd expect offers around 620.

A reasonable offer is whatever offer you want to make. Everyone expects to come up from their first offer. 600 is fine as a starting position.

Zoopla is garbage for valuation imo

I don't understand this. It's worth what it's worth. If they've asked for £640k, and that's what other comparable houses are going for, that's the value. You don't just offer under that for the sake of it, unless you aren't serious about wanting it.

The current value is what the highest proceedable buyer will pay. Presumably they haven't had any proceedable, asking price offers in 2 months or it would be under offer already. The OP can therefore offer whatever she is happy to pay, which appears to be 600k, only 6% below asking.

@DownaDarkDarkStaircase you need to sell your house before offering. You can, however, tell the agent that you are v interested and plan to offer once you are SSTC. If you feel that 600k represents fair value and this is the figure that you are happy with go for that. It's a perfectly respectable offer, unless the market is moving very fast in your area, which it doesn't appear to be or the house would already have sold.

Making a reduced offer is one thing but you're unlikely to be taken seriously if your house isn't sold subject to contract (SSTC) or even on the market yet.

Assuming you've had your house valued by a couple of agents, are the figures they're suggesting matching what you were assuming? That will give you an idea if you've gauged your local market correctly.

Next step is to arrange a viewing of your desirable house. Be chatty and ask lots of questions.

Besides being aware of the local market, it's always handy to find out what the sellers circumstances are before making a reduced offer.

Are they after a quick sale because they NEED to move to another area and need a cash buyer or someone not in a long chain or are they just testing the market and can they afford to hold out for the full asking price?

"The current value is what the highest proceedable buyer will pay. Presumably they haven't had any proceedable, asking price offers in 2 months or it would be under offer already. The OP can therefore offer whatever she is happy to pay, which appears to be 600k, only 6% below asking."

Exactly right.

Offer what you think it’s worth, if that’s 600 go for it, likely they will say no and if they close it down, just accept and move on. They know how much they will accept. Of course you don’t. I doubt it’s 600 and I don’t get the mumsnet obsession with percentages, no one on the history of selling has ever said oh I should accept it’s only 6 percent. They say it’s 40 grand.

Yes, this is very helpful advice. I appreciate all the responses.

I wouldn’t put an offer in before selling mine- I am just hoping to sell quickly. It feels like all the stars have to align so I am fully prepared not to get it.

I don’t think that houses have an inherent value as such - they are worth what someone will pay. Interestingly, zoopla says 572 with 629 as the highest value.

See everyone is slating Zoopla and I totally agree it's not accurate because it's not specific, but it goes on price growth in the area as far as I can tell so is worth looking at.