Realistic offer

craggle

We have viewed a house in a rural area twice and have approval in principle for a mortgage of 180,000 with a deposit to make up the full asking price. The asking price is 200,000 but similar houses in the area have sold for less than 150,000. The house has been on the market for nearly four years and has dropped in price by nearly 100,000 in that time. The area is not in high demand and very few houses have sold there in the last few years. How low can we realistically go with an offer

RobbieTheRobber

craggle wrote: »

We have viewed a house in a rural area twice and have approval in principle for a mortgage of 180,000 with a deposit to make up the full asking price. The asking price is 200,000 but similar houses in the area have sold for less than 150,000. The house has been on the market for nearly four years and has dropped in price by nearly 100,000 in that time. The area is not in high demand and very few houses have sold there in the last few years. How low can we realistically go with an offer

This is one of those how long is a piece of string questions, you can go as low as you the seller will sell for.

Does the seller have motivation to sell or not, a significant amount of time on the market may mean they are not in a rush to sell. Alternatively they could be desperate for a sale. No one knows.

There is no harm in offering your low offer, but be prepared for it to be refused. If you do offer a low offer do it with a deadline of say a week so your not hanging around for weeks when it is never going to be accepted.

yankinlk

When this market turns its gonna turn fast. Take the house you are looking at as an example. The buyer once wanted 100k more for that house 4 years ago. Either they owed that 100k to the bank and/or they wanted that 100k to buy another more expensive house. If the house they want now is cheaper, then that is how much less you can offer to meet them!

I suspect many houses on sale for 4 plus years are on the books purely out of interest to gauge the market turn. Say you actually offer the old asking price... You think they will accept? More than likely the home they wanted then is gone, or their plans may have changed, u never know.

Is it empty, rented out, or does the owner live in it? These are all factors affecting the seller, with different outcomes and motivations. If the agent told you the status, you might have a bit of knowledge to use, otherwise its guesswork.

davo10

Firstly, is there someone else interested in it? A property is worth exactly what someone is willing to pay for it, if it's worth €200k to someone else then you have to ask yourself is it worth €200k to you. Because a similar property sold for less 6 months ago doesn't matter, the market today may be different than then and may be different (more expensive) 6 months from now.


Secondly, Estate Agents nor sellers couldn't care less if you say the offer is on the table only for a week, this seller has waited for 4 years during a recession, unless he needs to sell immediately a month, six months or another year probably won't make a difference especially as the forecasts are that the market will improve during that time.

Thirdly, anyone who sees a property they really want, that feels right for them and their family, knows straight away they have found the house they have been looking for. Is this that house? If not and it looks overpriced, put in a low offer and see what happens if it is, tell the EA you will meet the asking price provided the seller takes it off the market immediately.

Lastly, I have bought a few properties over the years, some have been at auction/sealed bids. If I am getting a mortgage from a bank, I forward a copy of the mortgage approval with the bid, this is gold for the seller, it shows you are a serious bidder and that the funds are already available to complete the sale, no messing around with "subject to mortgage approval" offers. If this house is for you and you are prepared to pay the asking price, show the approval letter to he EA but tell him you are also viewing other properties.

craggle

The estate agent said someone is living there 'on and off' but as the fridge doesnt work its more off than on i would think. Its a rural area near the border in donegal with a high number of houses on the market and very few sales. A lot of the houses for sale are people from the north looking to move back in there as thats who the area was targetted to during the boom. I dont think the prices here will increase much in comparison to the rest of the country for a while.
I saw on another thread advice to go in at about a third less than asking for rural areas with low demand but just not sure if thats a bit too cheeky and likely to annoy them

Santa Cruz

Any offer is an offer. I think if you have an idea what the last sale went for it's not unrealistic to pitch in something similar. All that can happen is that it will be rejected. The bottom line is that you decide the max price you are willing to pay. If the bidding gets to there, walk away

Eldarion

Good rule of thumb:-

"If you're not embarrassed by your first offer then it was too high."

The_Conductor

Ok- so lets recap......

They have had the house on the market for over 4 years.
They have reduced the price by approx. 1/3
Other houses in the vicinity have sold for a quarter less than the current asking price on this house.

Advice- walk. The seller isn't being realistic with their asking price- and/or has no real intention of selling.

For the record- prices are continuing to fall in Donegal and the Border counties (as a matter of fact- outside of south Dublin- prices are continuing to fall, albeit on very very low volumes).

So- don't bother even throwing in an offer- its a waste of your time. If there are plenty of other properties for sale in the area, and sellers who are realistic about what they might achieve- have a look at some of those properties instead, you're only going to get frustrated and annoyed with this seller.

ted1

davo10 wrote: »

Firstly, is there someone else interested in it? A property is worth exactly what someone is willing to pay for it, if it's worth €200k to someone else then you have to ask yourself is it worth €200k to you. Because a similar property sold for less 6 months ago doesn't matter, the market today may be different than then and may be different (more expensive) 6 months from now.


Secondly, Estate Agents nor sellers couldn't care less if you say the offer is on the table only for a week, this seller has waited for 4 years during a recession, unless he needs to sell immediately a month, six months or another year probably won't make a difference especially as the forecasts are that the market will improve during that time.

Thirdly, anyone who sees a property they really want, that feels right for them and their family, knows straight away they have found the house they have been looking for. Is this that house? If not and it looks overpriced, put in a low offer and see what happens if it is, tell the EA you will meet the asking price provided the seller takes it off the market immediately.

Lastly, I have bought a few properties over the years, some have been at auction/sealed bids. If I am getting a mortgage from a bank, I forward a copy of the mortgage approval with the bid, this is gold for the seller, it shows you are a serious bidder and that the funds are already available to complete the sale, no messing around with "subject to mortgage approval" offers. If this house is for you and you are prepared to pay the asking price, show the approval letter to he EA but tell him you are also viewing other properties.

I Presume its an edited version of your mortgage approval. Otherwise why the hell would you provide that information

davo10

ted1 wrote: »

I Presume its an edited version of your mortgage approval. Otherwise why the hell would you provide that information

Hi ted1, sorry, just to clarify, I get a letter from the bank saying they have approved a mortgage for the amount I wish to bid. Sorry, I didn't mean I actually show them my mortgage documents. Apologies.