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

In my experience it's all a negotiation, My seller wanted a certain amount, we asked the estate agent if they would go 12% under. The estate agent said no, but if we offered 10% under, she would present the offer to the seller. We went back and forth a few times negotiating and ended up agreeing on 7% under asking price with the seller throwing in her practically new fridge freezer (ours didn't fit) and a new bbq (old one was knackered; we are not in the UK). Everyone was happy, it just took a bit of holding our nerve during the negotiation process.

It may all be a negotiation @alwayscrashinginthesamecar1 but would you offer 400k on a house valued at 525k?

500k is a negotiation, as is 475k.
400k is a joke.

Fair enough for them to ask the question to screen for time wasters. I just think it's very unusual for agents to ask for actual proof of a MIP (or other sources of funds) before booking the viewing.
It seems they were over zealous in preventing you from viewing because you didn't need a mortgage! If I was their client and selling i wouldn't be happy with that at all.

Yep, this. They aren't necessarily asking to see all your documents but they are asking the questions they need to do the filtering. "are you on the market?" "what's your address?" isn't just about getting you on a mailing list, it's to check on where you are sitting now on that housing ladder. Estate agents are a business, it's not in their interests to spend time and effort on people who want to view properties they can't afford.

Interestingly in my area the estate agents allow people to view even if their house isn't on the market yet. I don't know why. It is a bit of a time waster, but I wonder if they allow it so they can tell other people viewing that there's been lots of interest in the property. I do think it's a bit pointless! But having put my house on sale recently, I asked the agent to block book viewings, which meant I was tidying and cleaning anyway, so I didn't mind too much if some of the viewings were people not in a position to buy (in fact most/all were).

@Twiglets1 yep- I'm viewing a bungalow with my father in law this weekend- it's above budget at £525 but even if he loves it knows he won't go above £495 as he wants to leave money from his sale to cover off stamp duty, moving, storeage etc - but at that level I think it's worth viewing as been on about 8 weeks

And he doesn't need a mortgage and no chain

FWIW, if it's been on for 8 weeks, he is a cash buyer with no chain, I think he could get away with a cheeky offer. Depends on the local market and how much he likes it, but I'd consider offering up to 10% under asking if I were him.

It's because often there are people who would like to move, but don't have to move.

It's perfectly feasible for someone who hasn't got their own home on the market to view a house for sale, decided they like it, put their own property up for sale at a sensible price and find a buyer, all in the space of 3 - 4 weeks.

Whereby, there might be a person living in rented accommodation, objectively the better buyer, but they may have been in rented for 3 years and are completely unable to make a decision on buying somewhere.

Yes that's a fair point. We've offered on a house which is only for sale because the vendor saw a house she wanted and only then decided to put hers on the market.

We were motivated to finally get ourselves organised to sell our house after we saw one that we really liked.

@BournardTourney Your question for the £525k house really is the "how long is a piece of string" type of scenario. You need to change your mindset in presuming the house you will buy you will always get at a lower price than asking. It may happen but it may not - there are so many factors in play with buying and selling it is not as simple as asking for "how much should we offer".

How long has the property been on the market, are the vendors in a chain, have the vendors found a property, are the buyers in a chain (I know you are FTB), is a mortgage agreed, do the buyers have a low or high deposit amount, is it a unique property, is it near a good school catchment area - there are lots more factors all of which will come into play when deciding the offer amount.

Do not tell the EA you maximum amount, if they ask have you got a MIP, say yes and if they continue to ask for the amount, ask your solicitor to confirm you can afford the property, but only if you can afford the property! Do not use the EA in house mortgage brokers or solicitors.

Offering way below asking price will not do you any favours with either vendors or EA, so be very careful.

I agree and hope he manages to secure it if he wants to make an offer.

@Twiglets1 thank you -

My son and DIL bought a house recently and in their area the agents weren't letting anyone view who wasn't under offer already. They had luckily accepted an offer within a week of going on the market.