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

"a house that has received several offers around asking price is obviously being marketed at the correct amount."

Well, marketed at a price that attracts potential buyers, lenders could be a different matter?

You’re only setting yourself up for disappointment if you start looking at properties around the £600k mark when you only have £400k or so to spend. Offering £200k less on a house of that price is ludicrous and no one will take you seriously. You’re just wasting everyone’s time and your own.

Is there a link to the house?

Thank you everyone for your replies. Can I ask your advice on reasonable offerings against an asking price. The property is £525,000 but it is an older building potentially early 1900s- what would you say would be the lowest you can offer?

It depends on a number of things- the condition of the house, the area, loads of stuff that’s too specific for anyone to answer here. The house being old isn’t reason enough for it to be worth less than they’re asking- an estate agent will have valued it that much for a reason. It could be worth less, it could be worth more if someone is willing to pay it.

The age of the building isn't relevant to price. Period properties near us are more expensive and popular than newer properties.

And a reduction of £125k is an awful lot. I've just sold my flat for £525k - a Victorian conservation build in 1870s and there's not a chance I would have even contemplated an offer of £400k BUT my neighbour sold for £430k - she didn't have a garden and it needed a lot of work which would have been expensive so it depends on a lot of factors. Can you check Rightmove for recently sold prices?

This feels troll-y now... £525,000 is way above your budget, you can't afford it.

You are not owed any discount on a house, you might in some specific circumstances (not linked to age) get lucky and get a bit of a discount but its never a given.

Would you look at the price on a menu, say 'well I want stake but I don't fancy paying the price' then just expect them to give you a £21 stake for £14 in a restaurant? thats the equivalent of what your trying to do.

You want to be look at houses no more than £420k max. really and you are still not guaranteed a discount on them (but at least the estate agent wont think you are a completely mental nuisance and blacklist you if you off £400 on a £420 house). I sensible terms you should be looking at houses UNDER 400k.

I much prefer period properties to new builds and many people feel the same.

As PP said, it depends on a lot of factors including location, size and condition of property, and what the market is like in the area.

As a general rule, don't go lower than 10% below asking price, unless you think it's overpriced (based on other similar properties in the area) and it's a slow market, in which case you could possibly go even lower, but you need to be careful not to piss off the vendors.

I appreciate the advice in the second half of your post. I can assure you this is not trolling, we are just in a unique situation with the needs of all the people who will be living in the new property and we are seeking advice as none of us have bought a house before

Absolutely no one can tell you what to offer with any conviction because it depends on a hundred things! Not least whatever the seller expects. Make an offer you can afford and see what they say !

You don't seem to be listening to advice that you have received.
There is no specific lowest offer that you can make. It depends on all sorts of factors. As has already been suggested, research your local market carefully on right move, property log extension on chrome, otta property (you can sign up for a subscription cheaply), etc. View local properties so you have a good idea of what is available in the area. Then you will be in a much better position to make fair offers, which have a chance of being accepted but don't represent foolish over paying either.

No seller is going to give a toss about your needs OP, or any ‘unique situation’
They will simply want a fair price for their house.
If it’s up for £525K, then they are probably expecting it to be worth in that region. I’d say the absolute minimum would be £500K…..

Which you don’t have.
I guess there might be an occasional case of massive overpricing. But anyone who wants to put their house on the market way overpriced, isn’t going to be reasonable about negotiating either. You are wasting your time and everyone else’s

Unfortunately, no matter how unique you feel your situation is, the sad fact remains you currently can’t afford the kind of house you want or feel is suitable.

Essentially your options are go back to the drawing board and re establish your priorities and what you’re willing to compromise on, look at ways to increase your budget or sit tight and keep saving until you can afford what you want. Sadly no seller is going to willingly subsidise your house purchase, at best you might find someone willing to accept an offer a little over 10%, but if you start going in at 20-25% off you’re likely to get short thrift from the sellers and EAs alike!

You need to look at properties that are realistic within your budget. Therefore nothing more than £415 to 420 ish. And that’s still above your budget. Some may possibly consider an offer nearer your budget, others won’t.

It will just lead to disappointment if you aren’t looking at those that you could potentially afford as nobody is going to reduce just to suit your requirements.
If budget constraints aren’t throwing up the right properties then you have to reconsider your requirements of location, size etc.

It doesn’t help you in the slightest looking at properties way out of budget as you will then make negative comparisons with those you can afford. Then in turn you’ll not like those that are in your budget.

Buying a property is a series of compromises I’m afraid.

'I guess there might be an occasional case of massive overpricing. But anyone who wants to put their house on the market way overpriced, isn’t going to be reasonable about negotiating either.'

In fairness, there are masses of properties currently on the market that are very over priced. You only need to look at the number of reductions and see the frequent posts on here by sellers struggling to sell. Your second sentence is spot on. If someone over prices their home by 25%, they are not going to accept what it is actually worth initially. They may reduce in time and become more realistic or they may not. I agree that the OP is being very unrealistic too.

With respect, no sellers are going to care about the unique needs of your family set up. If you can only afford 400k it is pointless you viewing houses listed at 525k they are out of your price range. I would set your upper limit to 450k to be realistic.

If the 525k house is currently very overpriced it will gradually reduce in price over time & you can make an offer after if has been reduced several times. But with it being listed at 525k at the moment, the sellers will be expecting offers around the 500k mark. If they were willing to accept 400k they would have it on at 425k or possibly 450k but certainly not 525k.

Have you even viewed this 525k house? Most estate agents are not going to allow you to view a house on at that price if your AIP is only for 400. It's one of the major parts of their job to filter out the time-wasters, and if I was selling and I found out they were showing my place to people who were £100k+ short of the asking price I'd be giving the estate agent a pretty sharp piece of my mind.

A good estate agent wouldn’t even let you through the door to view a 525K property unless you can provide proof you can afford that price with your DIP & deposit. You can’t afford it, look at what you can afford and stop being so cheeky.

I've viewed a lot of houses over the years and I have never been asked to provide proof of funds when arranging a viewing. You only have to provide it when making an offer.

Maybe it is just that houses are up and down so quickly where we are but it is now the usual that an estate agent will ask to see a Decision In Principle from your mortgage provider which states your borrowing capacity before they will allow you to book viewings. Prevents any time wasters like OP who can only get a mortgage for 400k booking viewings for 600k houses when they have absolutely no way of buying it. It works well round here and I don’t know of any who don’t do this, it’s so much hassle having people come for viewings, getting everything tidy, no point doing that for people who couldn’t buy the house even if they absolutely loved it.

Estate agents will ultimately view you as a time waster and not want to show properties to you - their time is literally money.

You can afford £400K so look at houses worth £400K. Given the current financial situation you shouldn’t try and overextend anyway and most people will want as much as possible for their property…not 1/5 less.

Everyone has 'needs', we in reality NEED an adaptable 4 bedroom (multiple disabled people in 1 house) in a very specific area (I can't drive but need to be close to the kids SEN support and family who help).

We have been looking 2 years because just because we 'need' that doesn't mean someone will give us hundreds of thousands of pounds worth of stuff just for free. Think of it as the actual money instead, would you expect a stranger to just give you £125,000?

Being new to property buying doesn't mean anything in terms of expecting people to give you hundreds of thousands for free. Asking about processes etc... yes but expecting massive handouts is nothing to do with house buying and you have been told that many times.

I explained in detail reasonable house buying % pages ago.

You will need to prove to the EA at the point of offer your mortgage amount (many will ask you before booking viewings even). You are simply NOT proceedable on something £100,000+ over your amount so they literally wont let you view/offer on those houses as the are often told by the seller to block non proceedable buyers. You will just get blacklisted and not be able to buy through the EA.

I have never been asked to prove it at booking but I have been asked about it by ALL EA before booking in viewing. Several will not book people who aren't for sale, are in a chain or have a mortgage for some of the houses (any that have 28 day completion clauses etc...) as they can't be done in time.

I got blacklisted from one as I refused a mortgage meeting since we are cash buyers. They (wrongly) chose to believe this meant we weren't proceedable even though it was explained several times that we are full cash buyers. No other EA has had issue with us not having a mortgage.

I was about to defend OP from posters saying “ do your homework” - because I think asking on MN is homework, certainly for general guidance.

But I did have a bit of an eyeroll about the £525k house. OP, you don’t have the budget. And just as you have needs, your seller will have needs too - enough proceeds from the sale to buy their next house or fund care or move abroad or whatever. You will only make yourself feel worse if you keep viewing houses well outside your price range.