Reasonable offer?

dazberry

My GF and I have started looking around at property in a particular area that we like. In this area there are currently 12 properties for sale and most of these have been for sale for over a year, with an additional 2 having recently gone sale agreed and 1 sold over the last 6 months.

What I have noticed is that the these properties have mostly clumped around the €220,000 level, regardless of condition, whereby a couple appear to be in move-in condition but the remainder require varying levels of work from cosmetic all the way to gutting.

We are now in a position where we can offer €180K before setting foot in a bank, and that's the way we'd really like to keep it. Aiming somewhere in the middle of the lot (needing cosmetic work but otherwise in good condition), and given our financial limitations but not being in a chain or needing financial approval, would anyone consider €180K a fair offer on a currently €220K house or is it just taking the proverbial. While refusal would not offend, on the other hand I don't particular want to waste peoples time.

... and while I appreciate the advice that if we wait for say another year, we will most likely see another drop, we'd really like to start looking at it this year

Thanks,

D.

antiskeptic

dazberry wrote: »

My GF and I have started looking around at property in a particular area that we like. In this area there are currently 12 properties for sale and most of these have been for sale for over a year, with an additional 2 having recently gone sale agreed and 1 sold over the last 6 months.

What I have noticed is that the these properties have mostly clumped around the €220,000 level, regardless of condition, whereby a couple appear to be in move-in condition but the remainder require varying levels of work from cosmetic all the way to gutting.

We are now in a position where we can offer €180K before setting foot in a bank, and that's the way we'd really like to keep it. Aiming somewhere in the middle of the lot (needing cosmetic work but otherwise in good condition), and given our financial limitations but not being in a chain or needing financial approval, would anyone consider €180K a fair offer on a currently €220K house or is it just taking the proverbial. While refusal would not offend, on the other hand I don't particular want to waste peoples time.

... and while I appreciate the advice that if we wait for say another year, we will most likely see another drop, we'd really like to start looking at it this year

Thanks,

D.

I think you're offering over the odds myself. Consider:


- you can get walk-in for 220k. That automatically reduces the asking price of those less than walk-in (whether liked by the owner or not). Let's say a cosmetic-only-doer-upper should be asking 200k

- cash in hand always attracts discount. The seller can bank on the sale going through. And can ask for discount from their estate agent for that fact. We're now at 190k

- For a given house spec, some sellers will be moving up and will need to maximise house price. Others will be moving down and will be under less pressure to maximise house price. Others (such as those being sold off after the owner has died) will be unloaded at the first reasonable offer. Assuming this latter is a basic set point, we're now down to 170k.

- A first offer should always be low with a view to bargaining upward. It's the same as the first sale price being set high with a view to bargaining downwards. The sale meets somewhere in the middle. We're down to 150k.


It might help to know what the recently sold and two sale agreeds are priced at.

Tech3

If your thinking of buying the house then offer around 150K-160K, see where you go with that. Do not pay above 200K for the house that has been on the market for a long time and which they are asking for 220K.

ricman

Offer 160, go for a house ,that needs new carpets,wallpaper,total redecoration ,but no major repairs.YOU can ring the agent and they,ll tell you how much house x was sold for ,i did it .You may end up paying 180,190 k.MY friend was told his house is worth 180, he was told to advertise it for 200k or nearest offer,by the agent.HE ,ll probably sell it ,next year.

Treehouse72

dazberry wrote: »

In this area there are currently 12 properties for sale and most of these have been for sale for over a year, with an additional 2 having recently gone sale agreed and 1 sold over the last 6 months.....

What I have noticed is that the these properties have mostly clumped around the €220,000 level, regardless of condition

Very interesting anecdote. It corroborates the fundamental nature of the market at the moment: paralysis.

To mix metaphors, it's like a dam with more and more water gathering in the reservoir. Banks not lending, people losing their jobs, NE all over the shop, crippling debt, emigration, shag-all repossessions yet, NAMA sitting on property, all those empty houses...and still prices sit at the same level for a year not shifting? And no price difference depending on condition of the house and, often, its location?

I am not an economist and can't tell you how this all works through, but in my bones it just feels wrong, wrong, wrong. Like that dam is about to burst and all hell break lose. I think 2011 is piss-or-get-off-the-pot time for all this. We can't continue deluding ourselves that all 12 of those houses are worth €220,000 when nobody is buying them and banks won't lend anyway. I wouldn't buy property in 2011 at any price because there's a decent chance we're not even half way through the property crash.

SoupyNorman

I must row in behind TreeHouse on this one.

I sometimes wonder are NAMA adopting the 'lets hide under some coats and hope this all blows over' strategy.

Me and by GF are prime 1st time buyers...young(ish) professionals, decent salaries and safe enough jobs(for the time being!) but although we'd love nothing more then to buy our own place we're just too sensible. From time to time we see a place that ticks all the boxes for us, we start swooning at first, we go through an emotionally blinded justification for wanting to purchase the property. The next stage in the process is the reality phase...which is house prices are without doubt going to fall more and I dont think there is a person in this world that can argue to the contrary. We are in decline mode, it may not be full steam ahead due to NAMA's artificial intervention but the economy will do as it pleases and in time even NAMA wont be able to stop the inevitable.

Newspapers, TV and people became bored with speculating about the market hitting the 'bottom' so I dare say that there are some who are choosing not to question it and assume that we're there. Well, we are not! Recently I seen a house that I had my eye on reduce in price from €620k in 2008 to €365k today (various drops over the years). I mean we're talking about a near halving in price in 2years which is a pretty short space of time on an economic
timeline.

I personally am sticking to the rental yield pricing model, when I see properties start to come anywhere near their rental income total over a 14-15 year period then we'll talk.


For the next 24 months I'll be renting, OP I'd advise you to plonk those itchy feet in a basin of cold water and continue to rent also.


However, if you are determined to go over the edge...offer no more then €150k and walk away if they say no.

dazberry

SoupyNorman wrote: »

For the next 24 months I'll be renting, OP I'd advise you to plonk those itchy feet in a basin of cold water and continue to rent also.


However, if you are determined to go over the edge...offer no more then €150k and walk away if they say no.

Thanks SoupyNorman (and other posters) for the advice. Yeah, the more we've started to dig into this, it really has transpired that we have very different expectations, and beyond anything else, I think we need to stand back from this for a while.

Again, thanks everyone for the input, very much appreciated.

D.

Belnavar

I don't want to hijack your thread, but I also don't want to post a new thread about the same topic.

I'm interested in a property that's advertised for €120k, but after viewing it and sharing that I can buy with cash the asking price fell to €116k. Is an offer of €110k too little or too much for a first offer? The estate agent said that the owner wanted €116k and probably wouldn't drop as far as €110k, but then he would say that. Any advice?

-Bel

P.S. Apologies again for stealing your thread, Dazberry.

SoupyNorman

Belnavar wrote: »

I don't want to hijack your thread, but I also don't want to post a new thread about the same topic.

I'm interested in a property that's advertised for €120k, but after viewing it and sharing that I can buy with cash the asking price fell to €116k. Is an offer of €110k too little or too much for a first offer? The estate agent said that the owner wanted €116k and probably wouldn't drop as far as €110k, but then he would say that. Any advice?

-Bel

P.S. Apologies again for stealing your thread, Dazberry.

The EA and the Vendor are not in a position to dictate the terms to you, and also 110k is too much.

Monty Burnz

SoupyNorman wrote: »

The EA and the Vendor are not in a position to dictate the terms to you, and also 110k is too much.

+1

Offer far less (75k say), and let them come back to you. Time for hardball - unfortunate vendors are very much on the wrong side of the deal for the next few years.

fricatus

Monty Burnz wrote: »

+1

Offer far less (75k say), and let them come back to you. Time for hardball - unfortunate vendors are very much on the wrong side of the deal for the next few years.

+1

It's a sad fact of life, but turn it to your advantage. Do not feel bad about asking for another 10k, 20k, 30k or whatever off the price. Think about how long you'd be saving that much up, then add interest.

Once you've thought about that, then see if you care if someone (whom you don't know) thinks you're unreasonable or even a bit of a scumbag...

Remember, the price is not what the EA or vendor say it is. It is the highest amount that someone else is prepared to pay for the property. If that's 75k, then that's the price. Simples.com!

dazberry

Sorry to pull this back up, FYI of the properties that I was originally talking about when I started this thread one that I particularly liked did sell, with an original asking price of €220k, (subsequently dropped to €195k) and sold for €167k. Food for thought!

D.

royaler83

dazberry wrote: »

Sorry to pull this back up, FYI of the properties that I was originally talking about when I started this thread one that I particularly liked did sell, with an original asking price of €220k, (subsequently dropped to €195k) and sold for €167k. Food for thought!

D.

Fair play to you for updating after such a long time. More examples like these might wake people up.

25% off from the January asking price!