How acceptable is it to offer well below asking price?

[LocationOrLayout]

Everyone is talking about how bad the market is right now but I’m not experiencing that in my area. My house sold in 24 hours but I am really struggling to find anything to view let alone offer on. I phoned the estate agents again today. Told him my budget and he emailed across houses 150-200k over budget.

There seems to be this really odd gap in the market. You either have your starter homes or the £1 million+ houses. Anything in between is selling very fast so isn’t on the market long at all!

There was one property I really liked the look of. Ticked all the boxes in terms of size, location and potential but again, it’s £150k over budget and it needs 150-200k spending on it. I asked whether he was sending me properties over budget because they were keen to sell/ willing to take offers and of course, the question was skirted around and not answered.

For context, I am not in London and these prices are absolutely insane compared to our salaries here. House prices skyrocketed during covid when people flocked here to experience country life. The market has been booming ever since and I don’t see that changing. So that, coupled with mortgage rates at the moment means it feels impossible to actually move!

Anyway, what I am trying to get at, is how cheeky would I be to view and offer on these properties I am being sent? I don’t want to waste their time or mine but given they are on the higher end of the market maybe they’ve priced accordingly? It’s been ages since we bought our first house and we were always told to offer 10% less. Obviously 10% is huge on some of these houses!

True, but if you wouldn't be able to afford this property otherwise, maybe it's worth the risk.

Have you gone into every agent and told them what you’re looking for? If places are selling before you see them you need to be the first person they call before the property goes on right move.

No there isn’t. You just need to offer what the house is worth to you. You don’t offer more than it’s worth just because etiquette says so.

It all depends how reasonable the asking price is. if a house is massively overpriced then offering 20% under might be reasonable. However if it is very keenly priced in the first place you might get a bargain even if you offer over asking price.

I had this years ago. I told the estate agent my budget and was sent houses massively higher. After a couple came through, a really nice one arrived, so I called the estate agent and asked him to put an offer equal to the number I'd told him was my upper limit. The reply was that it would be too low. I said surely not as I told you it was my maximum and you still sent me these details, so you must think the seller would be open to that offer.

I didn't get any further houses through above my maximum.

In the current market you could safely START with an offer of 15% under - which you should expect may be refused. You may get a counter offer you may not. You can then increase to 10% under without worrying it will cause offence.
What you have to remember though - is that many properties for sale can't actually afford to sell if they dont get "x". Its about hitting the right seller who can afford to sell at the current reduced affordability. Nearly half of the properties in your search won't sell in this cycle. They will be withdrawn because the seller decides to stay put as "x" is no longer achievable. Thats whats happening at the moment.

I live rurally so there may only be 5 houses in a 5 mile radius. It makes it very very difficult to work out whether it’s fairly priced. Some have been on the market for a very long time so that’s easy but the ones that have just been added to the market, it’s almost impossible! It’s only worth what someone is willing to pay for it but there is always someone who can afford to pay over the odds here as it’s a real hotspot for people relocating.

This is what I want to avoid and what I’m finding very frustrating. We got really lucky with the sale of our house as the EA didn’t need to do any work really - it pretty much sold itself.

I do feel sorry for sellers who haven’t been so lucky because the EA’s are making it difficult for both sides. There needs to honest conversations about the volatile nature of the market and how the price needs to reflect that. If someone tells you your house is worth X, you will want X!

Yes, and I’m on every mailing list. I ring regularly but I’m often sent houses that are so far out of criteria it’s a waste of time. My budget is down as one of the criteria but they will send me all properties up to that budget via the mailing list so starter homes generally. I have hated every minute of this property search 😂

Also, does anyone know why EA’s are putting “Guide Price” on the listing when it isn’t up for auction? What does that even mean?

A couple of properties were on for “offers over” but have recently been amended to “offers in the region of”. I think that was a very smart move by the as they can amend that without adjusting the price per se!

I always find these posts amusing. If you are actively viewing properties you should have a good instinct of what the value is/should be.
It's not about % less than asking or anything other than is it realistically priced.

It's not cheeky or rude if you have good reason for the price you are putting on it. Make an offer of what ever you want, and justify it with a sound argument. Then the vendor can accept or decline.

A property should be priced/bought for its current condition, it's all very well saying it needs work, I trust that is reflected in the marketed at value. Either way, if said property needs so much work it sounds like it isn't for you anyway.

Similar story here. We got 65k off a 585k house but it was on the market for two years with no offers, hasn’t been decorated since the 70s (although is functional), and is a probate so sitting empty costing the estate money. The sellers circumstances count for a lot.

I think we’re still overpaying but we love the house.

Offer what you want but be prepared to not be taken seriously... i'd had my house on the market, 2 offers accepted and fell through on thier end so was at the end of my tether. Then someone else put in an offer 40k under asking, which may not seem a lot, but i live in the north east so bearing in mind house is worth and up for £120k so they offered 80k! Thats quite a big difference and would have been 0 benefit to me.
Was the straw that broke the camels back and i pulled it. The couple then did try to offer higher after but i was done by that point after around 9 months of my time being taken up by this so wasn't willing to listen.

I have explained this in an earlier post. There may only be one or two properties in a postcode. We live in an area where people tend to buy these houses and live in them until they die. There isn’t much data to analyse as you would in a town, for example. It’s very very difficult to know whether it’s priced fairly and Is simply about demand. The EA won’t tell me what that demand is though, will they?

In these situations, I think some of it has to do with the level of communication between the EA and seller/ buyer. I am finding it so unhelpful to be sent properties over budget but then these vague responses about offers under that. I get they want to make the most they can both for their commission and for the seller but it creates situations like you found yourself in. Very frustrating!

Estate agents will always send you houses over your price budget. They will make money out of a more expensive house they sell.

💯this
If you don’t ask you won’t get.

Sorry, don’t understand the concept of only looking at properties within a single postcode.

Certainly not when you then complain about a lack of availability.

open your mind, look wider, be curious and embrace this.

as for analysis of data, that’s totally missing my point. This is about you physically viewing properties and assessing value. Totally irrelevant if your at rural, village, town or city.

Or instruct a buyers agent. If OP is that desperate for a particular postcode that’s the way she solves this.

You have misunderstood my point. We are certainly not searching in one particular postcode. There may only be that one house in a postcode. I’m explaining why establishing whether a property is worth the value the EA have placed on it is very difficult. I could search within a 5 mile radius and there may only be 2-3 properties in that postcode and it’s very likely 1 or 2 at least will be a farm.

I was answering a PP who suggested I review the data on zoopla etc. There is a difference between turning up and deciding myself if it’s worth it to me versus knowing whether it really is worth that value on the market.

Some agents are just interested in generating footfall to show their clients they are doing something.

Others are hoping that you will put in low ball offers that they can present to their clients as evidence of where the market is at, and that they should lower the price.

Market pricing by agents is generally established by i) looking at other sales and other houses on the market when they are initially listed. But then their future pricing is influenced by the offers they receive. In a moving market where people have less cash and can only afford lower prices, price discovery only occurs by those people telling the agents/sellers what they can afford.

Some sellers will refuse to low at any cost and do not need to sell. Others are happy to accept large discounts.

Generally people are unlikely to accept big discounts if their house has been on the market for a short time. They are still living in hope that someone will turn up to pay the asking. If the place has been on some time, there is a better chance that a low offer will be accepted.

Sellers that lower their price gradually over time to try to find out where the market is are signalling that they want to sell.

You can offer if you like. I imagine a seller would have to be in a fairly desperate situation to drop 75k off a 750 house though.

An ea's job is to sell houses. It may be the houses they're sending are willing to accept offers, or they know occasionally if someone loves a house they will find a way to raise the extra. So they will send houses out of budget in the hope that they will sell a more expensive or perhaps more difficult to sell house.

As a purchaser you can just ignore those that don't fit your budget. Over budget? Ignore. Or view and out your low offer in. Either way, it's your choice and not really something to get irritated about.

Or remove your name from their lists and rely on rihhtmove. It sounds like houses move slowly enough to do this in your chosen area.

I think you can if you approach it properly. Say that you know it is a low offer but 675 is your absolute maximum and there is no wiggle room on it, so you will leave the offer with them and keep looking for something in your price range, but if they decide to proceed, you are seriously interested.

I have gone through the links from the EA again and I think there were two of interest, both over budget. There are two other properties on the market within a 5 minute drive.

Property with potential 1: 4 beds, 8 acres, no outbuildings or garage, requires modernisation throughout, £750k (came on the market 2 months ago)

Property with potential 2: 4 beds, 8 acres, very desirable location, requires modernisation throughout, number of outbuildings, potential to buy another 10 acres, £730k (just received probate so newly onto market)

Example 1: 5 bed, no land (decent garden), modern and beautifully decorated - £570k (been on the market over 2 years and was last reduced a year ago by £20k)

Example 2 - 3 bed farm, 100acres, requires total renovation - 650k (been on the market around 2 years, was reduced by 200k 3 months ago).

It’s not an ideal comparison as ones in a cul de sac, one is a farm and the properties I am interested in are neither - more like small holdings.

I don't think it is a good risk to take and the value of credibility with your vendor is important. It's also a hiding to nothing if you're on such a tightrope financially that you are forced into putting in excessively aggressive bids and have no further resilience to counter the bid with another response if the vendor finds someone else.

Once you start dishing out money on surveys and authority searches, the last thing you need is to think you've got a deal one day and then the next day (metaphorically) find they've found someone else willing to pay closer to their asking price. Once you start making commitments, it's Money down the drain if that deal is open to uncertainty. If you can't afford a property to such an extent that you're having to bid such low offers, it's a sure sign that you need to look at properties closer to what you can afford.