Apologies for starting another thread on this as I’ve seen it mentioned a few times over the last few months, but I was just wondering what peoples most recent experiences are of this today?
I spoke to an EA last Friday, about a house, who told me that there hadn’t even been 1 bid on it since its been up for sale. It has been up for sale for quite a long time and he told me that the asking price is putting a lot of people off, but that they’d probably accept a much lower price.
He also said that this is his experience with a lot of properties that are up for sale! ie nobody is going to view them or bid of them because of high asking prices (I didn’t ask why he just didn’t reduce them so !!)
The example they gave me was a house for 300k could easily go for 230/240k.
He encouraged me to see 2 other properties that are well above my budget (he doesn’t know my budget though).
I worked it out that 70/75% of the asking price is what I could afford. I am going to view them and chance my arm. But is this been totally realistic do people think?
I keep on reading that people are accepting offers for about 70% of asking price. But is this really happening that much?
I have had a bid on a house on the table with another EA since November, which is 85% of the asking price. Since November, I have been the only person who has put in a bid, and it still hasn’t been accepted! (granted, the asking price has been greatly reduced and is a lot lower than similar houses in the same estate)
A few of my pals are in positions to be selling houses and they are all below the 350k mark. All of them are looking for no less than 10% less than their asking price!
I’m in a similar position to yourself, mortgage approved a decent deposit and hoping to shave at least 20% off the asking prices that we are looking at. But my friends are not even contemplating accepting offers with 20% off they think it’s shocking that people are offering those low ball offers and a few have said “if there are people offering 20% less then there must be some interest in it”!
I’m not so sure… I think alot of houses are still unrealistically priced and I wouldn’t pay near the majority of asking prices. But sellers certainly don’t seem keen to bite your hand off.
I think it depends on the price bracket. In my experience, houses in good condition under the 300k mark are going for close to what they’re asking. Over the 450/ 500 mark it looks like the reduction is between 25% and the sky’s the limit.
That just my experience though.
I recently put a bid 25% lower than the asking price on a house that has been on the market for at least two years, has had two agents and not a single offer. The ea told me he will be recommending it be accepted but he knows it won’t.
There are unrealistic sellers out there but there are also unrealistic would-be buyers.
I wonder about this too. If you have a maximum budget of 250k for example, how high do the asking prices need to be before they’re out of your price range? While you might get a house that’s advertised as 280 down to 250, is there any point even viewing anything 300+? Even if they are overpriced in comparison to others in the area it’s still an indication that the seller id unrealistic and so is probably even less willing to entertain lowball offers.
If your budget is 250 K, say, you are unlikely to get anything asking 300 K + for that price, unless similar houses in the same area are asking less than than 300 k (no more than 280 K)…or unless you’re prepared to wait until the vendor wakes up and smells the roses…
I mentioned this in another thread! It’d a bit disheartening for my wife seeing these houses that are out of our price range, but I’m going to keep bidding for houses that have an asking price of 25% more than our budget.
If we get no joy in the next couple of months, I’ll have to maybe start looking at houses more realistically in our price range! (or hope the one I bid 85% of asking price is accepted!! )
I was just interested to hear if other people had heard of many houses recently going for 25/30% lower than asking price!
My experience is that everyone is willing to talk about what they *would *offer: people are a lot more cagey when it comes to telling you what they did actually pay, or what they sold their house for!!
And, 25-30% off an asking price can be dependant on what type of bracket the house in in. I read somewhere else on the pin that the 200-400k houses are in demand so you’d be more likely have to pay close to the asking
I’ve seen a number of examples recently where a house has dropped the price 20% and got sale within a few weeks at close to the asking price. If you had offered 25% below the week before they dropped you may jut have gotten.
At the risk of annoying people, in my view most of the posts above are looking at this from entirely the wrong point of view. It doesn’t matter a damn what the asking price is, or what % of it you offer. You should determine what you believe is the ‘correct’ value of the house (using rental yield, 1997+ inflation, cost per ft2 … or whatever your preferred metric is); then see if this value is within your price range, then determine your negotiating position and try to get the lowest price possible such that it doen’t exceed what you believe the correct price is (+ a desireability premium if you wish).
Anything else is not founded in objective pricing and is just a repeat of the celtic tiger model (pure supply and demand with buyers have no objective base).
I have been doing this for a number of years now, and was laughed at regarding what they vendor\EA considered my ‘low ball’ bids; but it was getting closer for the last year and eventually I landed one. In all cases I ignored the asking price (price\ft2 was my basic metric by the way).
We were just out bid on a house in SCD that went for over it’s asking bit circa 22% lower than last years asking. It’s impossible to tell what to offer based on asking price, some are just made up and some are the owner setting the price where the EA knows they won’t drop it. Also some owners are people in trouble with the bank putting it on the market with a high cover the mortage price but no hope or intention of selling but are seen to be doing somethiong. Some are really trying to sell but can’t take a low offer due to negativ equity and the back saying know.
Look at as many house as possible, work out what it is worth to you and offer accordingly.
Every situation is different, because basically its a load of individuals, families, executors, banks, investors selling for various reasons. Those reasons will determine if firstly they can accept a low bid even if they were happy to. Some can’t. Then there is the other side of the market, the buyer. If other buyers are willing to pay more for that house, then no, your offer of 20% under is not going to be accepted.
There is no rule of thumb here, no matter what you hear. Offer what you think its worth and don’t bother trying to second guess what the vendors will accept and what other potential buyers will pay.
I think this year’s property market will require patience and perseverance (or rather, even more of those qualities, as I know from my relatively short two years of serious househunting how exhausting it can be). Those who are patient may be rewarded if the current dash to buy and competitive bidding eases off as some of the pent-up demand is satsified.
I don’t mean to seem self-contradictory, as elsewhere in this forum in the past week or so I was suggesting a general “30% below asking price” rule of thumb. However, as I warned at the time, circumstances are different in many cases - the price may be very reasonable, there may be other bidders, etc. The original purpose of my advice was to try to warn a poster against bidding what I would have regarded as too much for a property, at least too much for a first bid. The 30%-below approach has its place in certain settings. I would also add that there may even be times when you should offer less than you think the property is worth, again subject to demand, the vendors’ circumstances, and so on.