How negotiable is asking price?

[BournardTourney]

First-time buyers, we have an agreement in principle but the houses at that exact price and under don’t quite meet our requirements. We are also looking at other houses that are up to 50k more - but there is one house in particular that is more than 200k above our AIP. We would appreciate any advice on whether it would be inappropriate to make an offer that is 50k to 200k below asking. TIA

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It isn"t a "600k house" though if no one wants to buy it for 600k, a lot depends on how much interest they have had for how attached they will be to the original price, and buyers can also make offers that won"t be matched by their lender at survey time.

When we were selling our last house we had an almost immediate cash offer for £150k less than asking, we laughed and rejected it and refused to entertain any other offers from them. It sold for asking price a short while later. I totally get that the buyer was being opportunistic, but feared someone that out of touch with the market was either a dreamer or would likely be a pain in the ass later on in the process.

What was the asking price?
I'm wondering what £150k was as a %

You think 🤔

It would no doubt give the EA a good laugh though

Even looking at a house that's so far over your budget is madness

Why don’t you watch a few old series of Location Location Location? There is lots to learn from that show about how to negotiate and sensible offer levels.

You can also see on Zoopla sold prices what houses were advertised for and what they eventually sold for.

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I wish you had done this, would have been interested to hear the response! There's me worrying about offering 25k under 😅

House was on at £595k so it was around 25%

The house I want, I will be starting my offer at 10%below asking price. That's a difference of 540k to 485k, however I could afford to pay the full asking if needed so this is to start negotiating

On my own house however the absolute maximum I can shave off my asking price to move is 6% as I have priced realistically to get interest to move.

There is absolutely no way I could imagine anyone accepting over 30% reduction! They may only have that as equity in their house to begin with!!

Never say never! If the property is massively over-priced, and you catch the seller at the very best moment when they have had enough, anything can happen.

We bought property in the US at 20% off the marketed price and got the seller to pay all of our fees. It's important to note that we didn't care whether or not our offer was accepted. That's not usually the case in most UK home sales.

Most sellers would rather test out the market at a lower discount than sell for such a huge discount.

For example if I were selling a 600K house the only way I would actually sell it for 400K is if I knew it was only really worth that (massively overpriced).

I'd prefer to test the market at 500K first.

There may be an incredibly small number of scenarios where someone might have an emergency and have to sell quickly at a massive discount. But in one of these cases you can pretty much bet that it would end up going to someone in the know and not to the greater local market.

We've literally just accepted an offer on our flat. It was on for £525k (and we've accepted that figure). We had an offer of £475k which was increased to £490k which we rejected. That was increased again but at that stage we suspected that buyer would try and knock us down. So we effectively wrote that guy off as a viable option.

I think how much you knock off is really dependent on what you're buying and also what the seller's position is. Go too low and I think you create doubt as to how realistic and reliable you are as a buyer.

Not sure many EA"s are cocky enough to laugh at offers any more.

https://www.theguardian.com/money/2024/sep/30/number-of-uk-estate-agents-going-bust-rises-almost-a-third-in-one-year

Of course unless they are a cash buyer their lender still has to approve the offer?

They appear to have a deposit of about 60% but not a cash buyer. We've had three offers at asking price now. Doesn't mean there won't be a down valuation but I am surprised at how large some people's deposits are.

In that case if they like the house they will probably pay the price, good luck!

You can offer what you like and they can feel free to decline it - there aren't really any rules. If it has been on the market for ages and was massively overpriced to begin with, which applies to loads of houses, then you never know!

Unless the house is priced £1,800,000 or above
or
£800,000 but needs serious complete renovation to be classified safe and has been on the market a while

Then do NOT offer 200k under asking ever.

It honestly sounds like you just can't afford what you want. We all WANT a house 200k more than we have but that doesn't mean we can. You have to live in your means.

As for offering in general:

• 2%-5% under stands a fair chance of acceptance if the house isn't newly listed and popular
• An offer up to 10% off is considered within reason but usually will only be accepted for houses that have been listed for a while, are a bit overpriced or looking for a quick sale.
• Over 10% is considered 'cheeky' but 12%-15% might work if the house isn't selling and needs a fair bit of work doing (like needing a new roof etc...).
• Under 20% is usually considered offensive and under 25% would have you labeled as 'piss taker' in most cased.

Bare in mind if you negotiate low on price based on the properties 'condition' at the point of offer it is very unlikely they will offer a further reduction later after survey as the work will already have been accounted for in your offer.

There are no rules. Every home, seller and buyer is a very unique combination.

To offer £400,000 for a house on at £600,000 is laughable.

You have clearly not come to terms with what you can actually afford.

Our last house was on the market for offers in excess of £350k. Buyer started low but ended up offering £348,950.

You can offer whatever you like, but 200K discount is a huge ask, and likely to be regarded as an insult. If you want to reduce the price by a substantial amount it helps to say why you are a good buyer: eg, you have finance in place and are ready to move at the seller's convenience.

A 30% discount ie £400k for £600k house is completely ridiculous and you will be laughed out of town. 5% is more reasonable. You need to do your homework on pricing.