Is it a really bad idea to buy a house right now?

[potatolord]

We've decided to put an offer in on the house. What's a sensible offer on a property listed at OIRO £225k?

My thinking is to go in at £215k. I think if the seller sticks with £225k we'll just wait to see what happens in the market.

My first offer on a £235k house was £180k. I ended up paying £201k.

I was renting and so was a quick buyer, and they were bleeding cash (owner was in a care home). The house had been on the market for a while- we had first seen it when it was £245k.

If you make a low offer, they can only turn you down- you can always go higher.

 

[happy_2008]

Depends on a lot of variable e.g. house, area and quickly properties go. Im based just outside london in SE and properties here around 400k mark doesn't get you a lot (e.g. detached, garage etc).

 

[HangTime]

Out of interest, and I appreciate that there are a LOT of variables, does that mean that as an FTB it wouldn't be unreasonable to bid 400 for a place on at 425?

Not unreasonable at all for a property in London given there's much less need for city workers to be based near the city any more. If I was selling a London property, on the market at 425, assuming that was a 'fair price' and not a 'knock down' price, then I would give serious consideration to a chain free buyer coming in at £400k+. Waiting around for another buyer, risk of chains collapsing due to wider economic factors (people losing jobs etc), these things would all worry me as I could sit on it for months and find the value has dropped. Also if I was buying another property I'd want to get in before the stamp duty hike so again keen to move fast.

FWIW, I met the seller at the house today and it's obvious she wants to move quickly. She even told us she has a property lined up she wants to buy, but has a deadline of 8 October to formally agree. We're FTBs and we've got our mortgage and deposit ready to go, so hopefully we can get it at a good price as 'good buyers' so to speak.

Sounds very positive, unless the property is clearly a great price already relative to comparable properties, I'd be coming in under £215k I think. I know these phrases like "OIRO" "OIEO" "Fixed price" etc are all a bit of nonsense, but to me OIRO implies they might be willing to move a bit.
Maybe go £210k, on the basis that you are a FTB with no chain, and say you are happy to move at whatever speed the buyer wishes. You could buy next week or in a few months whatever works for her. They will come back and say no good we want more money. You can then throw a bit more in the pot on the proviso she removes the property from the market and cancels any planned viewings.

As I say though it depends a bit on whether £225k is a good price already. If it is there's a risk someone will just come in with a higher bid anyway. How long has it been on the market? What was the last sale price and when?
You've described it as a dream home, so if you do come in with a lower offer keep in mind you have to be prepared to miss out. If as a couple you are really not wanting to go down that route then perhaps don't try to drive such a hard bargain.

Ahleckz is based in Scotland where the system is different, the impression I get is there advertised prices are pretty meaningless they are just to attract in bidders and homes frequently sell for significantly above that price. So I wouldn't be expecting a house in England to be selling for way above the listed price.

 

[kissenger]

So we did put a final offer in of 213k (exactly 5% below asking). Unfortunately we didn't get it. They had two other offers and one of them was higher than ours. It's disappointing, but I think the smart move financially was to not get in a bidding war.

 

[The_Arbiter]

It's only the hyper inflated areas i've really read that get the houses for cheaper than asking. 5/10% over is pretty standard atm. But head over heart, never worth getting hyped/loved up over bricks and mortar.

 

[Bug One]

Are all these houses looking for offers a new thing, or a regional one? Nothing sells near me like that. You get a valuation, put it up at that price - and then if someone offers that price, you sell to them.

This stamp duty holiday has turned the marked into a bizarre rush to buy a property asap at any cost. I'm so glad our sale / purchase was all agreed before this madness started.

 

[The_Arbiter]

Are all these houses looking for offers a new thing, or a regional one? Nothing sells near me like that. You get a valuation, put it up at that price - and then if someone offers that price, you sell to them.

This stamp duty holiday has turned the marked into a bizarre rush to buy a property asap at any cost. I'm so glad our sale / purchase was all agreed before this madness started.

I think it's like xmas sales, people think they're getting a deal when they're really not. And those that know they're getting little saved, just buy to avoid missing out. Don't get me wrong a few grand saved is nice, but moving isn't exactly free, among other issues that could have been avoided in the first place.

I wanna under offer on the agreed price on the place i've been waiting for, (sellers left the garden in a serious mess since putting in a 6% above asking offer), but like you say people gone mad, or at least very keen, so feels like a gamble.

 

[Bluecube]

Ahleckz is based in Scotland where the system is different, the impression I get is there advertised prices are pretty meaningless they are just to attract in bidders and homes frequently sell for significantly above that price. So I wouldn't be expecting a house in England to be selling for way above the listed price.

Not quite right re Scottish system. The Scottish system is sealed bids so you place an offer with a solicitor based on what you think the house is worth. On the closing date, the bids are handed to the seller who decides which one to go with which isn’t necessarily the highest one. Frequently houses sell for under the asking price especially if the market is slow.

 

[mid_gen]

I think it's like xmas sales, people think they're getting a deal when they're really not. And those that know they're getting little saved, just buy to avoid missing out. Don't get me wrong a few grand saved is nice, but moving isn't exactly free, among other issues that could have been avoided in the first place.

I wanna under offer on the agreed price on the place i've been waiting for, (sellers left the garden in a serious mess since putting in a 6% above asking offer), but like you say people gone mad, or at least very keen, so feels like a gamble.

What is a desirable in a home has changed since the beginning of the year, distance restrictions for commuting have gone away or are less important now, plus a stamp duty holiday. No surprise there is a lot of demand at the moment.

I tried a few offers below asking but they were gone at asking within a few days of being listed. This is in nice small towns/villages in the midlands.

If you've got an agreed offer on a nice property you'd be mad to mess with it. I managed to get £1500 off our place because the survey turned up a bunch of work, but if I'd pushed any more than that they'd have just told me to do one, it would have sold again at asking in a week.

 

[Psycho Sonny]

Raymond Lin has summed it up perfectly.

You should buy a home to live in, not worry about the value it might be worth in a year/5/10 years.

With the pandemic and not knowing if there will be a flood in the market next year, there will always be buyers for houses, the stay at home message has re-evaluated a lot of people's priorities and owning a proper space is going to be a commodity for a long time what ever happens. I doubt this potential crash will be anywhere near like the last one just because the demand for multiple rooms and a garden will only increase.

Spend as much as you are comfortable with on the nicest area/biggest property you can get, avoid flashy already done up houses (you're paying for someone else's taste) and don't get too hung up on the concept of equity.... Civ4 has the quote "something is worth what the purchaser will pay for it" when you discover currency and that's most true with houses.

That's absolutely rubbish.

There is homes literally a stone's throw away from mine that lost over £100k in 2008. I think there is one that lost £200k just walking distance from me. They never recovered either. So it's very area dependent. In fact I paid the exact same price for my home as the previous owner did right before the crash. So in 8 years their house didn't go up in value in fact it went down because they made massive improvements. They made the kitchen and dining open plan by removing walls, etc. They fully landscaped the garden so it's now over 3 separate levels. They also expanded the driveway so it's now got enough space for 4 cars. All that work and they got what they paid for it 8-10 years later. So homes just don't bounce back within a year or two it's very area dependent.

So your saying it doesn't matter when you buy or lose equity so long as you don't sell?

I'd much rather buy after a £100k crash than before it.

It's the same with stocks and shares buy low sell high.

Also your taking the advice of someone who doesn't even own a home.

Cineworld just announced they will be no longer another 5,500 jobs lost.

Give it 6-12 months like I said. It's the perfect time to sell but buying will be in a year or so.

 

[Psycho Sonny]

I’ve mentioned it a few times. We offered £255 on offers over £215k. We were 6th best offer.
We then offered £262 on offers over £209. We were 5th best offer and it went for over £300k. My advice? Figure out what you can afford, what you’re happy to pay and offer that. As we say up here “go balls out”.

It’s a sellers market, there’s no chance to negotiate.

What area are you looking at? I'm guessing it's near the city centre in a sought after area. Probably south side as not enough money for west end.

Any home below £300k is being snapped up much higher than asking.

Houses in my area are selling within a week. Demand right now is crazy high.

https://www.rightmove.co.uk/property-for-sale/property-97387136.html

This looks like it could within your budget if you stretch it and a good price for what you get.

That's worth £300k IMO.

It's the only real bargain I've seen.

 

[Ahleckz]

What area are you looking at? I'm guessing it's near the city centre in a sought after area. Probably south side as not enough money for west end.

Any home below £300k is being snapped up much higher than asking.

Houses in my area are selling within a week. Demand right now is crazy high.

https://www.rightmove.co.uk/property-for-sale/property-97387136.html

This looks like it could within your budget if you stretch it and a good price for what you get.

That's worth £300k IMO.

It's the only real bargain I've seen.

Looking all over, but so far most of them have been in the East. It's more the property we want, rather than the area. Want a period property (high ceilings, bay window), a good south/west facing garden and near a train station. We don't want kids, so the idea of the local school being awful isn't a problem. Robroyston is a bit too housing estate and nothing else for us tbh.

 

[Semple]

I think it's like xmas sales, people think they're getting a deal when they're really not. And those that know they're getting little saved, just buy to avoid missing out. Don't get me wrong a few grand saved is nice, but moving isn't exactly free, among other issues that could have been avoided in the first place.

I wanna under offer on the agreed price on the place i've been waiting for, (sellers left the garden in a serious mess since putting in a 6% above asking offer), but like you say people gone mad, or at least very keen, so feels like a gamble.

For those that are upgrading from say 150 to 180, or 210 to 250 etc, then i agree stamp duty costs wouldn't normally be so bad. But if you're going from 360 to 420, or 430 to 500, then the stamp duty can be astronomical. So that's a big reason people will be pushing forward with house moves.

The housing market is incredibly hot around here. I've got a BIL/SIL that are looking to buy as FTB'ers, and plenty of houses they've made appointments to go and view have already had offers put in by the time they get to view it.

 

[Psycho Sonny]

Looking all over, but so far most of them have been in the East. It's more the property we want, rather than the area. Want a period property (high ceilings, bay window), a good south/west facing garden and near a train station. We don't want kids, so the idea of the local school being awful isn't a problem. Robroyston is a bit too housing estate and nothing else for us tbh.

Good luck those types of properties are much harder to find and especially for a good price. Might need to be a major fixer upper.

Jordanhill where I've stayed has a lot but they are mega expensive because of the area and the school.

Even if you don't want kids your property will go up a lot more in a area with a top school.

I wouldn't write off an area with a good school although initially more expensive will pay off dividends long term if you choose to go into a home or move and cash in on the equity.

Affluent people go for schools so they pay more for homes with a good school. So it's in your best interest even if you don't want kids unless your plan is to die in that home and you don't care what it's worth as it will go to the government.