How to know what offer to put on a property

[Catsinslippers]

I know it’s not a set rule but are there any rules of thumb I can follow? I look at some properties and they’ve been up for a while and am assuming they're overpriced but wonder how low I can go.

Obviously i know that it’s up to the sellers in the end but I want to offer low but not so low no one takes me seriously.

As a very rough guide you could consider offering about 10% under?

Do your research. Sold prices. When last sold and what work done.
Seller’s circumstances can be very important. Motivated sellers or probate sales will be keener to take a low offer. Estate agents can give great clues.
Too much depends on specifics though. If you link to one you’re interested in there are some great sleuths on this site.

A lot of properties are priced to take an offer for example on at £420k would expect offers at £400-410k , I always research but I've also asked the agent what are the sellers looking to achieve price wise. Not sure if that's cheeky or not but I only view properties I'm really interested in and know what I'm looking for in a property so they know I'm a serious buyer. If there's work needed calculate how much that's going to cost too.

There's no rule, as you can't know the sellers circumstances. You could get an amazing deal if the people do need to sell quickly. But the market is dead at the moment in a lot of places so a house can be priced too high to sell quickly currently without being "overpriced" compared to what houses locally do sell for eventually. Houses where I am tend to stay on the market for several months now because it's a pricey area, but they do sell for asking (or maybe £10-15k below) eventually and people who don't need to move urgently are happy to wait it out.

People on Mumsnet always like to talk about offering 10% below, but no one I know who has sold their house was able to knock that much off and afford their onward purchase. I'd expect to get £10-15k off maximum if the house had been on a while, maybe £20-30k if it's a £500k+ house.

If theyve been on for a while it can be a red flag so I’d call the estate agent for as much info about the seller as possible. Also do a google search and search the FB listings of local estate agents as this is a good way to find out if it’s been on with another estate agent beforehand.

Theres a property we love but it’s on the market since Dec. The price occasionally drops by 25k to encourage new viewings but before the viewings can take place the listing is returned to the original price. The property is on for 100k more compare to other properties that have gone STC and we’ve spoken to the estate agent and the vendor isn’t willing to negotiate on price so we’ve had to walk away.

Thanks for the advice. I will have to talk to the EA more I think. I am finding the whole house buying stuff such hard work but desperate to get out of our rental!

Look at local sold prices and compare them on square footage, condition etc.

You are right that there is no hard and fast rule.
Research your local market really carefully, preferably follow for a good 6 months. Looks at sold prices, asking prices of those that go under offer, monitor the slow reductions. As you say, speaking to the EA to find out the seller's position is a good idea.
Some sellers of houses that aren't selling for many months will cling on to the high price in the hope that someone will want to pay it after 6-12 months despite this being very unlikely. However, there are a lot more and a lot faster reductions this year compared to 2023 so reality is starting to dawn with some sellers. There are also some who realise that the market has fallen but can't afford to move to wherever they want if they take a bigger reduction because other sellers haven't yet reduced.

You can see sold prices online. Do lots of research, perhaps even a spreadsheet of similar properties with asking and sold prices. Go from there.

Remember that the EA works for the seller not you. Do your own research into recent sold prices in the area and prices of similar houses for sale.

On it's own the asking price isn't more than a rough guide on what to offer.

How long has the property been on sale?
What is the condition like? Ready to move into or needing updating? If the latter, is this reflected in the price?
What else is available nearby for that price?

Plus the degree of motivation of the seller could affect the offer they accept. But them needing to get a certain price doesn't make the house worth any more to you, so just because they need £Xk to move doesn't necessarily mean you should pay that amount.

Yes have a further chat with the EA but be mindful of the fact that they work for the seller so you may have to take some of what they say with a pinch of salt.

They will not be encouraging you to make a low offer but reading between the lines, sometimes they do hint that you should just make an offer as the seller is motivated to sell (this may mean the seller will accept a low offer).

We had a great solicitor who advised us what to offer. I wouldn't have had a clue otherwise as FTBs.

@AutumnJoys would you not instruct a solicitor after you’ve put the offer in rather than before?
I’d love someone to guide me on any particular house offer!

@Catsinslippers most buyers get an offer accepted first before instructing a solicitor, yes.

I've never heard of a solicitor advising on a figure. I would contact several solicitors prior to putting in offers and make a decision so that you are ready to go. Also, have your finance confirmed for the same reason. If you have no one to advise you in real life, do the research carefully as suggested above and also consider your personal financial situation, how secure your jobs are, how specific your requirements are, etc. You may need to make several offers before you have one accepted. Try not to get too emotionally attached to one property as you may end up disappointed or sucked into over paying, which is not a good idea at present.

I used someone from Harper Macleod. I contacted her after I'd got a mortgage in principle and asked if she could help us through the process and she said yes. I then viewed various properties before asking her what she thought was a reasonable offer for the first house we offered on (we were outbid) and then she advised us on what to go for, for the house we bought. She was great from start to finish and in the end got us a great deal.

I'm in Scotland though so don't know if it's different here.

DS and his partner have just offered on a property with an offers in excess of headline price. They tried 10k less, rejected which they expected so upped it to the headline price. They are now waiting for the response. The EA is being very cagey. The sellers are splitting up so assume they need a particular amount. They have only had the property a short time and have done work to it and we know what they purchased for. I think they'll probably have to increase their offer again to get it but how much over should that be.
Definitely prefer an actual asking price to work with.

Your DS and his partner need to decide in their max price & not become too attached to one property. Buying from divorcing couples can be far more complicated than other types of sellers.

rainingsnoring. I know, difficult for them as there's not much around at their price point so finding something decent is pretty difficult. They've tried to buy a couple of properties earlier in the year but they both went for best and final going for above asking and what they could afford to pay. I know they have a max figure in mind a little above what they have offered on this place.
I think they were hoping it would be a fairly straightforward process as there's supposed to be no onward chain and they are FTBs renting but anything can happen!

I feel for them; it's not easy for FTBs unless they have access to a large bank of mum and dad! There is probably more demand at lower price points from FTBs, landlords and downsizers. They still need to try not to overpay/ over borrow. Good luck to them.

It's worth seeing a few houses to get a flavour of why things are valued differently. Pictures don't necessarily tell the whole story. It will help you to judge what is reasonable to offer. It also depends on factors like how long it's been on the market, and frankly how much you want it. For context, with our house, we had already seen one on the same street and new it was nicer for same price, it had just gone on the market and we were first through the door and we knew that we wanted it, so we did offer asking price to get it taken off the market and avoid other viewings. However, during our search we also saw properties which were very clearly overpriced, and/or needed very substantial work that was not being accounted for in the asking price.