Making an offer on a property (flat)......

PaulStat · 9 May 2007 at 11:21

What's the general etiquette in making an offer on somewhere? I've heard that estate agents generally add another 10% or so on the estimated value because they don't think they'll get the asking price!

So say you had a flat advertised at 229,950 would making an offer of a first offer of about 210,000 be the norm?

Personally if it were me i'd say no straight away!

Samtheman1k · 9 May 2007 at 11:24

Offer it, and if they say no, then increase the offer. If there are several people bidding, then it will probably go to a closed bid and you'll have to increase. If they accept the first offer, you'll kick yourself as they may of accepted lower.

It is difficult and all depends on the property. Look at other flats in the area and if they are selling quickly, then you'll probably have to pay near the asking price (at least in SE you often do). I've never had a first offer accepted, so just offer what you think the minimum it is worth, then increase it gradually until they accept.

Twinblade · 9 May 2007 at 11:27

The asking price is generally above what they realistically expect to get for a property.

A colleague of mine met the asking price on a house he is about to buy, and it was £163,000. The surveyor carried out his survey, and advised that he would expect it to realistically fetch £145,000.

An estate agent is going to put a mark up on a property, as they make more, and the better valuation they give, the more chance they will get the client to advertise their property with them.

I generally knock off 5-7.5% off the asking price straight away, and then knock off for other things, like: no double glazing, if the kitchen/bathroom needs a makeover. If it is poorly decorated etc.

Also, research the other properties that have recently sold in the same street, and see what they went for. Also check to see how long the property has been advertised for. If its been up for months, they will accept less.

Wicksta · 9 May 2007 at 11:28

Never heard of that 10% thing before, around here most houses sell for their advertised value or thereabouts. If you price a house too high then no one will even bother coming to look at it. Last year we sold our house 1% under the asking price.

TheCrow · 9 May 2007 at 11:30

You funny English ppl, we would need to offer asking + upto 30%. Much better way of getting as much money out of a property as you can!

WillyNelson · 9 May 2007 at 11:39

Samtheman1k said:
Offer it, and if they say no, then increase the offer... If they accept the first offer, you'll kick yourself as they may of accepted lower.

What he said.

We're looking to buy a place valued at £179k and are going in with an opening offer of £165k. That said the places round us tend to sell quickly and for full asking price so we shall see.

Samtheman1k · 9 May 2007 at 12:04

Nelson said:
What he said.

We're looking to buy a place valued at £179k and are going in with an opening offer of £165k. That said the places round us tend to sell quickly and for full asking price so we shall see.

That's similar to our situation. It all depends on how quickly they want to move and how many people are interested basically. The state of the house will already be taken into account when setting the asking price. We have had to offer full asking price on 2 properties (1st fell through) just to get them, but this is the SE and competition for decent properties is strong and thus having to pay the asking price (or more) is common.

As someone else said, if the asking price is too high, or the house is in a poor location, then it just won't sell. If it is a good un, then be prepared to pay full asking price.

scorza · 9 May 2007 at 12:23

You have to think about it logically imo, if properties like the one you want to make an offer on are selling quickly (and you should have a feel for this by talking to the estate agents etc) then sellers will expect closer to the asking price. On the other hand, if you're a first time buyer then an offer from you should be seen more favourably than an offer from someone with a chain behind them. You can also use issues with the property to justify lowering the asking price as well - will the windows need replacing for example? does it need a new bathroom?

PaulStat · 9 May 2007 at 12:47

Yeah at the mo the bathroom is a bit manky and all the windows are single glaced sached windows. And yes we are first time buyers

Rotty · 9 May 2007 at 12:50

no harm in trying but you would be very lucky to get 10% off unless it's been on the market for a long time, around here stuff tends to go for no more than 2-3 % off asking price in general

Ev0 · 9 May 2007 at 17:52

It depends on the agent.

A good agent with a good rep will value things at what they think it is worth and expect to get that.

A rubbish/struggling agent will over value to appeal to the vendors greed so that they give them the property to sell. A lot of the time the house is on the market longer and either drops to the original valuation price or the vendors go with another agent.

In agency the biggest thing is getting the houses on, not selling them! Selling them is the easy bit.

Plus think about the percentages, on that 230,000 house if the seller is on 1.5% commission he'll have to pay the agent £3450 round about. Now if e sells at £210,000 the agent gets 3150. Now for the sake of £300 is the agent going to care that it's 20k under the asking price when all he loses out on is £300? No he/she isn't

So don't always think the agent is there to get you the best price possible, the agent will sell the house at a price he has to.

That said, sometimes the overvaluing pays off for them, esp in the recent market, and they sell for the higher prices.

Personally as Rotty says, it depends on how similar stuff is selling in the area. If it's going like hot cakes then the vendor will know and will be expecting near enough the asking price, I'd be putting in a 'cheeky'' offer of £220k and working up from there. If the market isn't so hot there then I'd offer £215k (and expect it to be laughed at, but you never know

).

When buying our place the vendor said pretty much outright what his bottom line was, we tried offering below but didn't get anywhere. In the end for the sake of the couple of quid we said ok then, that was 1.8% under the asking.