Offer received on property - a lot lower than asking price

vicwatson

A mate of mine was asking me... he received an offer on a house he has for sale, 25k less than asking (asking had been already reduced), should he tell the EA to take a hike, tell them he'd accept 5k less? and negotiate... He told me he'd be willing to take 12.5k less.

How does this play out.... I told him it's a good tactic but don't know too much about it tbh.

blah

It's very hard for people here to tell you, given that we don't know anything about the property (and it probably wouldn't be wise to provide any details).

As a potential buyer I think that prices have a long way to go still and 25k less than asking price might be 25k more than asking price in 2 or 3 years.

You will find plenty of threads here from people who are trying to buy houses but get dismissed by agents/sellers for bidding under the asking price, they're accused of not being "genuine sellers". But they know they can just hang on and buy in a month, or a year, because the prices certainly aren't going up.

dearg lady

why would he say take a hike if he would be willing to accept less??
i think offer it for 5k less than it's up for and see what the potential buyers come back with

vicwatson

why would he say take a hike if he would be willing to accept less??

He said he was thinking of telling the EA to tell the purchaser that he was unwilling to take 25k less than the asking but is (without telling the purchaser of course) willing to take 12.5k less than the asking. He is willing to take less but not 25k less.

dearg lady

vicwatson wrote: »

He said he was thinking of telling the EA to tell the purchaser that he was unwilling to take 25k less than the asking but is (without telling the purchaser of course) willing to take 12.5k less than the asking. He is willing to take less but not 25k less.

well as above, I would offer it at -5k and see what they say.

Zulu

kinda depends on the percieved value of the house really, and if he has any other offers.

Duckjob

Zulu wrote: »

kinda depends on the percieved value of the house really, and if he has any other offers.

^^this, in conjunction with how long has the house been on sale.

If it's just gone on sale, he probably should give it a bit of time to wait and see if he can get a better offer.

If it's been on sale a couple of months with no offers, then more than likely the price is just too high - and this is regardless of what he thinks it worth, how much it has been reduced by, what the house up the road is asking etc etc.

If the latter is the case then really up to him whether he wants to actually sell it, or join other sellers in their perpetual delusion that their properties are actually worth €x when really they're worth €x-50k, €x - 100k etc.

the_syco

How long has it been on the market, how many times has it been redced, and how long between the reductions?

f9710145

the_syco wrote: »

How long has it been on the market, how many times has it been redced, and how long between the reductions?

These are the most relevant questions I think. We viewed a house, decided we wanted it and were prepared to offer max of €35k below asking, on the basis that from the previous price history I figured it was due another reduction soon. Took us a few weeks to be organised and in that time they dropped the asking price by €35k. So we went in and got it for €10k below the new asking price. But we knew €35k below the new asking wouldn't be entertained because it had just beem reduced and was now a more realistic price for the area.

robd

vicwatson wrote: »

A mate of mine was asking me... he received an offer on a house he has for sale, 25k less than asking (asking had been already reduced), should he tell the EA to take a hike, tell them he'd accept 5k less? and negotiate... He told me he'd be willing to take 12.5k less.

How does this play out.... I told him it's a good tactic but don't know too much about it tbh.

Up to 20% under asking would be a fairly normal offer in the current market. People expect a discount these days. At the end of the day a house is only worth what someone is willing to pay. Apartments are tougher to shift as are commuter towns and areas outside major cities. The fact that he had to discount is irrelevant to current buyer. It just means EA mis-priced it in the first place. EA's often over price to start with as sellers will naturally tend to go with EA who quotes them the highest price. Human nature.

I wouldn't tell any buyer "to take a hike" in the current market. It might be the last that's ever seen of them. EA's are good enough at driving away potential buyers away all by themselves. Better to try to negotiate with a counter offer of somewhere nearer to asking. Also, could offer things to sweeten deal like kitchen appliances etc.

Always think of offer in terms of % off asking. 25k is only 10% off asking on 250k house and 5% off asking on 500k house. You'd expect that when buying yourself.

Don't know the house, don't know the asking price so can't really say much more.

Lyn256

Come back with a counter offer and see what happens but in the current market-a buyer in the hand is worth Waaaaay more than a future one.

In 6 months time, your friend might bite the hand off such an offer.

Do some negotiation but if there's no one else interested - try negotiate and if the buyers are not for budging-take the money and RUN!!!!!!!!!!!!!!!!!!!!

Spiritofthekop

Tell him to take the money now and run!!..... if he HAS TO SELL.

ShadowHearth

I gave an offer 40k less then it was for sale. We are talking about property for way less then 150k eu asking price. It got accepted.

Your friend should be happy that EA informed him about offer given. Alot of EA don't even inform sellers.

It all depends on intrest on property.

vicwatson

Your friend should be happy that EA informed him about offer given. Alot of EA don't even inform sellers.

They are obliged aren't they.

Snakeblood

vicwatson wrote: »

They are obliged aren't they.

I don't know if they are obliged, but they don't.

Dades

Without knowing the asking price for the house the question is pointless.

If the asking is €200k, then a €25k drop is acceptable, if not normal. Buyers expect to get a house these days for at least 10% off the asking price. It's the reverse of the AMV bollocks we saw in the boom.

If the house is asking €100k, then the game has started. Then just tell them no, they need to offer 'closer the asking price'.

On the other hand, if there are no other offers on the table and the house has to be sold, then I would be in the camp that suggests you don't scare the buyer off with a blank refusal, rather let them know you are willing to negotiate but need more than the offer made. The important thing is not to lose them.

Supercell

Well I just offered 25k less today and hope to end up paying 10k less than asking, hope its not your mates gaff or that's my bargaining position screwed!

Its called haggling, say you want a few more k than the guy is offering and see if they bite, chances are they'll come back with an offer to meet in the middle. Does anyone really make their final offer the first one unless they are in a hurry?

I chanced my arm once with a property I knew was probably going to go above my top offer so offered it first time and said it was a once off bid. It was rejected and did sell shortly afterwards, but nothing ventured nothing gained!

snowey07

it obviously depends on the circumstances, is the house on for 100k or 300k? Has he much of a mortgage left ? does he have to sell or just wants to?

I offered 55k less and bought for 51k less.
To put it into perspective - what I paid for my 2 bed in Summer 2011 is less than what a 1 bed with no bathroom sold for in 1999 on the same road