How much to offer on house??

mel123

I am looking to buy a house. The asking price is 490k, and there is no offers on it as yet. What is a reasonable offer to put on this with the auctioneer, I have not got a clue what to go in at. Obviously I would like to get the house as cheap as possible, and with it being a buyers market and all that hopefully I will get it at a good price. I can get finance for the asking price if it goes over.

The_Conductor

mel123 wrote:

I am looking to buy a house. The asking price is 490k, and there is no offers on it as yet. What is a reasonable offer to put on this with the auctioneer, I have not got a clue what to go in at. Obviously I would like to get the house as cheap as possible, and with it being a buyers market and all that hopefully I will get it at a good price. I can get finance for the asking price if it goes over.

Hi Mel123- I would suggest knocking a healthy 20% off the asking price- knock it back to say 400k. It is a buyers market- its entirely reasonable to put in an offer well below the asking price. If you are in a position that you do not have to sell a property in order to proceed with the purchase you are in a very strong position. 400k is out of the realms of almost all FTBs and most other purchasers are stuck with property they cannot sell.

Do not underestimate how big a discount you can expect in the current market if you are a cash purchaser ready-to-go.

Zambia

mel123 wrote:

I am looking to buy a house. The asking price is 490k, and there is no offers on it as yet. What is a reasonable offer to put on this with the auctioneer, I have not got a clue what to go in at. Obviously I would like to get the house as cheap as possible, and with it being a buyers market and all that hopefully I will get it at a good price. I can get finance for the asking price if it goes over.

are you a cash purchaser ready to go?

mel123

Well i have sale agreed on my own place, so i am led to belive they would 'pick' me over someone who is putting in an offer but has to sell their own place first.

400k holy moley i would have never thought of going in at that asking price. I went to see it about a month ago and no offers on it yet. Needs a good bit of work as well.

Zambia

mel123 wrote:

Well i have sale agreed on my own place, so i am led to belive they would 'pick' me over someone who is putting in an offer but has to sell their own place first.

Ah well you see in the current market I would not consider you ready to go until your 10% was in place and contracts signed on the sale agreed.

However a bid is still a bid however your position is weakened IMO.

As the market could still give you a kick if your buyer gets cold feet and pulls out or guzumps you

The_Conductor

Zambia232 - yes, I'd have to agree......
I can easily see reverse guzumping working, esp. in the secondhand market. (if I said that a year ago everyone would have thought I was either insane or else sarcastic.....)

Sale agreed doesn't mean a lot at the moment. Money in the bank talks volumes. Unless a buyer has something to loose- they can easily walk away from an agreement. If I was selling in the current market I would accept an offer 10% lower from a cash purchaser than from someone who has to sell (irrespective of what stage in the selling process they are at). I have seen a few too many local sales fall through recently to have much confidence in the current market.

mel123- if the house actually needs work done to it- I'd go even lower my offer than I indicated. There is a glut of well spec'ed, well furnished property on the market at the moment, selling at a discount. If the seller wants to shift something that needs work done to it- it stands to reason that he will have to discount it even more.

Irish Wolf

mel123 wrote:

Well i have sale agreed on my own place, so i am led to belive they would 'pick' me over someone who is putting in an offer but has to sell their own place first.

400k holy moley i would have never thought of going in at that asking price. I went to see it about a month ago and no offers on it yet. Needs a good bit of work as well.

I don't see any reason for not going in at 400k or lower given the length of time its on the market and the work to be done.... do you know has it already been reduced? You should also probably consider the going rate for the area and factor in how much the "good bit of work" will cost to bring it up to top of the local market and use that as a basis for what you'd be prepared to pay.

pjbrady1

You could even go in at 390k and say to them "You have till Friday take it or leave it, I'm looking at other places as well."
There is a good chance after four days of no other bids they will start thinking "cash in the bank is what I need".

mel123

There is about 30-50k's worth of work needing to be done to the property.
The price when it came onto the market was 490k and its still 49ok, but with no offers.
I have money there for a deposit, does this make my offer any stronger or does it not make a difference?

Zambia

mel123 wrote:

There is about 30-50k's worth of work needing to be done to the property.
The price when it came onto the market was 490k and its still 49ok, but with no offers.
I have money there for a deposit, does this make my offer any stronger or does it not make a difference?

No difference as lets face it would you sign away on an obiligation to sign on that house if yours was not signed up.

As despite your deposit you need to know where the balance was coming from

iguana

When are the contracts due to be exchanged on your current house? If it was relatively soon I'd be tempted to wait until then to make an offer. Then you'd be in a strong position, and more time would have passed which would make the vendors more desperate. Of course that's a gamble against somebody else making an offer the vendors accept while you are waiting.