Is offering 5 to 6 per cent under asking reasonable?

[ComeOnAbraham]

Georgian terrace in London. It'd been for sale confidentially for about 3 weeks and has been publicly on the market another 3.

I am thinking of starting 6% under, hoping to agree on about 5% under. Does that seem reasonable?

The norm is to go 20% under and then negotiate upwards to about 10% less. They will have priced the property with this in mind.

You can offer what you think the property is worth. They can accept it or wait for a better offer. With such a short time on the market it’s unlikely they’ll go for less right away unless they really need a quick sale for some reason

What does for sale confidentially mean?!

It depends on how realistic the asking price is in light of recent comparable sales. Offer what you think it’s worth.

This is certainly not the norm where I live.

er…. No it isn’t 😆

It's when the agent markets it to their lists without putting it on Rightmove. Basically means they can test pricing.

It entirely depends on how properly the property was priced to begin with. If it was way too high then 20% off is fine. If it was way too low then 5/10-% over may be more appropriate.

You need to figure out what the property is affordably worth to you and then submit that as a first and final offer.

You can offer what you want and they can accept what they want. As previous posters have said, it depends how they have priced it in the first place. Some people are hopeful for a high price and therefore more willing to take an offer than other people who have priced it realistically and want to get closer to the asking price.
We are trying to sell MIL's house at the moment as she has gone into a home. We got three estate agents to value it, went with the middle valuation, no offers for six weeks and
then two people got into a bidding war and it ended up going for between the middle and higher valuation. In the end, it is worth what someone is willing to pay for it.

Depends, surely. Some sellers want to crack on so they list it priced to sell; other sellers cling to the nice-sounding valuation they got in 2022 for dear life.

FTB by any chance @ComeOnAbraham ?

Stop. Don’t work on percentage. Work on knowledge. How does it compare to other properties you have viewed and what would you be happy to pay.

Personally I would offer what the similar properties in the area sold for in the last year.
But you could try to offer 5% under as it looks like many agents price the properties higher expecting potential buyers asking for a discount.

It totally depends on what it is worth to you.
How does it compare to other, similar properties that have sold in the road/v local area?
How much do you like it?
Can you comfortably afford it?

Bear in mind that a lot of agents are listing properties for much higher than market value and the market, in many areas, has taken a nose dive since the war in Iran was started and interest rates have risen. Most part of London have also been falling in the last few years since the Covid rush.

It depends very much on the market, there is no norm. You’d be dismissed as an annoying time waster if you offered 20% under round here, no one would take you seriously as an informed and reasonable buyer. Houses are going for asking or maybe 5% under if a bit overpriced to start with.

You’re thinking about this the wrong way. You don’t decide on an offer based on it being a certain percentage under the asking price. You make an offer based on what you think the house is worth.

If a house is very overpriced then offering 20% under asking might still be a reasonable offer. If a house is priced very competitively already then offering asking price might still get you a bargain.

All this. Houses in my area typically go for over asking - even nowadays. However, we bought a house during lockdown that had been empty for a year and had owners desperate to sell. So in that scenario, we put in what (for here) was a cheeky offer at 2% under and got it. That wouldn’t work typically - the houses in my estate that sold the year after went for 20% over asking (though am sure that’s less likely nowadays too)

Presumably op is asking for views on the London market for freehold houses, not people’s views on how you choose what to offer 😂

I’m in London and planning a move in this market. Things round us are going 5-10% under so I imagine your proposed opening offer would be considered a reasonable start. I wouldn’t go 20% under given that it hasn’t been marketed for that long.

You need to figure out what the property is affordably worth to you and then submit that as a first and final offer.

MHWC fan by any chance? (Me too 😂)

It’s quite normal to offer under in London and particularly at the moment.

Forget about offering 20% under, no one would accept that at this stage.

6% is perfectly reasonable - even up to 10% is reasonable.

Doesn't mean the owners will accept it necessarily but it's high enough that they should be interested in starting a negotiation.

Thanks everyone.

Bit of a fail in how I asked my question. I know what I want to offer initially and how high I'm willing to go above that but wanted to get opinions re what's happening in London without mentioning actual figures- I think sometimes threads get a bit sidetracked when people mention prices in London because they are out of line with a lot of areas of the country. So I was just putting things in relative terms but clearly that didn't come across to most. Thanks to those who understood and gave a helpful answer.

FTB by any chance

No I'm absolutely ancient.

@ComeOnAbraham in my safe and popular with families area of London freehold houses still sell well. So I wouldn't offer 20% under for a house here, but easily might do so for an ovepriced flat.
It might be a different story for Brixton/Croydon and the likes - I don't know.

So you should know better then! Daft question when we have squat all idea about the property itself

I priced my house last year for the amount I wanted. I got it both times (fell through once). It was worth at least what I asked for it due to the condition and renovations it had, so I wouldn’t have accepted 5% less.

Totally depends on the house, the street, the market. Too abstract to say from your post. Also people’s perspective on good condition differs!

What did you sell for in the end? Asking price?