Help figure out what to offer on a property!

[Mikebarnes]

Hello wise people of mumsnet.

we want to put an offer in on a property. It’s on for £900k. Here are the facts:

• it’s been on since October
• the vendors have found a place they want to move into and those sellers are frustrated at the slow pace
• Rightmove values it at £875k
• this is probably about right - it’s over priced and one of the reasons it hasn’t sold
• were cash buyers but reliant on a mortgage on another property that I don’t have yet

what would you offer and why?

Rightmove (and Zoopla) valuations do not necessarily know what improvements may have been made to a property and so tend to be based on the trend with similar sized properties within the immediate area.

If you are reliant on a mortgage, I wouldn't regard you as a 'cash buyer'. To me a cash buyer has that money, available in a bank account (or a very large shoe-box).

Having said that, depending how much I really wanted the property I might offer £863,000, so not too low that it is just dismissed and expecting to be pushed up to say, £870,00.

were cash buyers but reliant on a mortgage on another property that I don’t have yet

You're not strictly cash buyers then. You possibly mean you don't have a chain?

I'd offer 850 to start, with the expectation it will be a definite no. Then up from there by negotiation.

If they are moving on, they may need a certain amount from their sale to make the move viable, so even if it's worth less, that may be why they aren't dropping the asking price.

So you aren't really cash buyers. How long do you think this other mortgage will take to arrange?

If the property has been on 5-6 months and not sold, it's very likely to be over priced, as you say. You need to research the market, check recent local sales to try ti find comparable properties and try to figure out roughly what a fair price is. Bear in mind, that the market appears to have slowed more recently if anything and that the economic situation is obviously deteriorating. Then, also consider how much you want this particular property, how many similar are coming to market, etc. Given that it has been on a long time, taking off 5-10% or even a bit more would seem very reasonable but that depends on the factors above.

You’re not a cash buyer as you’re relying on the sale of another home to pay for this so I wouldn’t use that as a negotiating tool. Do you mean you don’t need a mortgage?
875k sounds like a reasonable offer though.

Thanks everyone.

yes we don’t have the full amount sitting in an account but we’re chain free (we don’t have to sell anything) and not getting a mortgage on the property in question. The mortgage on the other property will take a few weeks to arrange.

i was thinking £880k and be done with it, but you’ve all suggested lower. Don’t know if my heart can take it. Is it too high?

we do want this property particularly. We live two roads away and this is great because of potential to extend, catchment and garden size and orientation.

I would put a cheeky offer in at 870,000 and see what they come back with. If you are in a strong position then highlight this. You can then go up to 885,000 as a final offer and see. It all depends on how much you want it, but it is a game and you have to just okay it out.

I would say that 880k (only 2% off) is definitely too high in terms of the prevailing market, otherwise it would have sold already (barring unrealistic sellers wanting AP and nothing lower). Still, if you want to over pay, it's entirely your prerogative. It sounds as if you have plenty of £££ so maybe you can easily afford to do this in order to secure the house you want.

I would go in at 850k personally.

To be honest they should have already reduced the price if they are committed sellers.

850k is a good offer & nothing to feel awkward about. As you really want this house you could allow yourself to be “persuaded” to go a little higher but you should negotiate strongly considering it has been on the market since October.

I would start an offer at £885 also rightmove do not take into consideration the amount of work that has been done since it was last sold. Ours says £575000 but is with £750,000 after revovating.

2% discount!😂
Who said it’s a buyer’s market? 😀
This property is not 2% overpriced, otherwise it would have gone by now. Everyone in the market has looked at it and said no.
It’s going to be 10% over, at least. As you say, it’s their prerogative, but instant negative equity going into a deteriorating economic outlook is something I’d personally look to avoid.
OP, definitely pay for a valuation and a proper survey first. Make your offer with results of the valuation and survey all having to align.

'As you say, it’s their prerogative, but instant negative equity going into a deteriorating economic outlook is something I’d personally look to avoid.'

I totally agree with you but perhaps it's worth it to the OP, who does appear to be in a very privileged position.