House Bidding

[Sassifrass13]

My husband and I are embarking on buying a house for the first time. One thing I am curious about is how much below the asking price of a property is reasonable to offer? We don't want a long drawn out process, but we also obviously don't want to have to pay more than necessary. Is there a built in assumption in most asking prices that they will be offered less? Is there a typical percentage to this amount?

[Oneeyedvic]

Sadly no typical amount. It really depends on the market around where you are. To give you a couple of examples:

When we sold a house in Northampton 5 years ago, we put it up for �59950 as it would be just below the threshold for stamp duty. On the first day we had 5 offers, 2 of which were above the asking price.

We moved to Yarmouth and 18 months ago we had our house on the market for �139000. We sold it fairly quickly (couple of weeks) for �136,000. The couple who purchased it split up a couple of months after we sold it and put it backon the market for �145,000. It has been sitting there for 14 months now (reduced down to �139 as well).

One house I looked at was up at �130 and I put in a cheeky offer of �86k - got rejected and they sold the house for �125 to someone else.

I guess it really depends on how much you want the house, and what you think it is worth. Personally, I would never offer the asking price unless I really thought it was worth it and knew someone else would offer the asking price.

When you do make the offer, make sure you tell them the good things about you - ie you are first time buyers, have a mortgage arranged and can move quickly - this is very appealing.

I would also get on the side of the estate agent - they get a commisison on the sale and up to around �5000 won't make a lot of difference to them - typically �50-�100 - and if they say to the sellers that this is a good offer.....

 

Hope this helps

[spudqueen]

Totally different for each house I would imagine. Our first house was on the market for �39,995 and we put in an offer of �36,995 which was accepted. The house had been empty for quite some time. The second house we bought I just fell in love with and knew that it was a special house so we offered the asking price. Unfortunately so did someone else so we had to put in our 'last and final bid' which we did, �3,000 over the asking price and won it. This house we're in now had been empty for about a year when we saw it and we offered �5,000 below the asking price (which was �110,000). We got it , but it did need (still does!) a lot doing to it.
I would say that if you desperately want a house then don't mess about and offer the asking price, especially if it's in a popular location, lots of people been to see it, fairly new to the market etc. However if the house has been on the market a while and/or needs quite a bit of work (and by this I don't mean just decorating - things like a 60's kitchen, 60's bathroom, needs re-wiring [my house!]) then it's worth putting in an offer lower than the asking price, UNLESS it is the house of your dreams!
Good Luck!

[Buenchico]

Different areas have different ways of doing things. Where I live, in East Anglia, the 'normal' system applies. i.e. if a house is advertised for sale at �100,000, offers will probably come in at �85,000 (from people who are optimistic and not in too much of a hurry to purchase) or �92,000 (from slightly more realistic people) or even �100,000 (from someone who just couldn't live anywhere other than the house on offer).

Where I used to live in Sheffield, however, things were very different! If a house in Sheffield was advertised at �100.000 and somebody offered that sum, the estate agent would probably laugh because the offer was so low! In Sheffield, the advertised price is frequently just used as a guide price to suggest a point above which all offers should start. So, in Sheffield, an optimistic bid would be �100,000. A more realistic bid would be �115,000 - and that certainly wouldn't guarantee a sale!

Chris

[Gef]

Sorry, I know that this does not answer your question but if you ever think of moving to Scotland then it could be useful. Here, "offers over" means exactly that. I recently sold a flat at offers over �129,000 for �155,000. This is very annoying when you are buying because having paid for a survey you have no idea what to offer and are often outbid. On the plus side, there are no "chains" in Scotland and gazumping is very rare. Many properties end up being sold at a fixed price.

[vehelpfulguy]

You also have to remember that the value an estate agent puts on a house is only their estimate of what it is worth. It may be �20,000 undervalued or �20000 overvalued.

In fact if you asked three agents to value a house they will often come up with figures very different.

As others have said, there are so many circumstances.

If a house has been on the market 6 months (if the picture still shows snow on the ground!) the sellers may be getting desperate.

On the other hand if it has only been on sale 2 days the sellers may be willing to wait for a better offer.

You could ask the estate agent what the 'lowest offer' may be. Although they are working for the seller, they also want to sell the house so may be willing to be open with the buyer. 

[vehelpfulguy]

By the way, when looking for a house, dont just look at the size of rooms or decoration.

Look at things like number of mains sockets in the rooms, age of central heating, quality of roof, standard of guttering, and signs of damp etc.

The house I am in I bought about 15 years ago from an old man. After buying it I noticed most rooms only had ONE single mains socket.

It took me about 5 years to go round the house adding lots of double sockets to each room. I had to lift the carpets, lift the floorboards, channel cables up the walls etc.   

After this each room had to be redecorated, and we had to have a new carpet in each room.

It was a load of work, and all because I did not check how many mains sockets the house had.