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Placing a low offer on a house, are we wasting our time?

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  • 11-10-2014 1:21pm
    #1
    fro9etb8j5qsl2
    Closed Accounts Posts: 2,391 ✭✭✭


    Hi lads just looking for some opinions/advice on how to proceed in this situation. We have enough cash to buy a nice but basic house outright and even though the bank have told us that there would be no problem getting a mortgage to enable us to buy a bigger better house, we would prefer to avoid borrowing unnecessarily. We've spotted a house that we like but it is 25% more expensive than our cash budget. We don't want to waste anyone's time by going through the rigmarole of going to see the house only to discover that there is no chance the vendors will sell for such a low price. I am wondering if I call the auctioneer and mention our budget to him BEFORE arranging a viewing, would he let me know if there is any chance of getting it at this price?

    The house itself has been on the market for a while and although it does need a little work, it is liveable. There is a similar house in the area that needs a fair bit more work but with the amount of money we have, we could afford to buy it and still have enough left over to do the work. However, with 1 baby and another on the way, this would be a huge amount to take on and we are anxious just to get somewhere and get in as quick as possible.

    Obviously, we would go to view the house before actually deciding whether to make an offer but it is so difficult at the moment to find time where we are both free, I'd hate to go to the hassle of arranging it only to find that we have no chance of buying it.


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    #2
    iguana
    Moderators, Entertainment Moderators Posts: 12,915 Mod ✭✭✭✭iguana


    We just bought our house for close to 50% of the asking price. It had been on the market for roughly a year when we bought it and only one other party had viewed it in that time. In our case the house was in receivership so it took a stressful 8 months to complete but it was certainly worth it. I was 100% sure when I made the offer that I would be laughed at and was shocked when the EA responded positively. I've heard a saying that if you aren't embarrassed by your first offer, you are offering too much and I kept that in mind when I offered.

    The main thing at the moment is that it depends on where you are in the country. In and around Dublin, and possibly in parts of Cork and maybe even Galway, your offer is likely to be rejected. But in most other parts of the country prices are still falling, so it's certainly worth a shot. But I wouldn't tell the EA your financial position before viewing the house. Go see it first, you mightn't even like it that much or you might like it enough to consider a small mortgage. You aren't wasting the vendors time by viewing the house. If nothing else by viewing it you will give feedback to the vendor that could be helpful to them in selling the house even if you don't buy it.

    ETA: Have you checked through the property price register to see what similar houses have actually sold for? And on websites like Collapso in order to see if the house you are interested in has had any price drops since it went on the market? Both of those things will help give you a picture of how fair your offer would be.


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    #3
    fro9etb8j5qsl2
    Closed Accounts Posts: 2,391 ✭✭✭fro9etb8j5qsl2


    Thanks for the info iguana :) It's a kind of mixed bag area and all of the properties are different design/space/condition so the current prices vary from 25% more than what they are asking for right down to what we are willing to pay. According to collapso, the house originally went on the market in 2010 for double the current asking price :eek: (IMO, it would have never been worth this) In 2011, they dropped the price by 25% and when it still hadn't sold, they took it off the market. They re marketed it last year at the current price. As far as I know, the house is currently vacant but I'm not sure how long it has been unoccupied. The huge price drops could mean that they are either desperate to sell (good news for me) or that they have already dropped it as far as they are willing to go.....


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    #4
    NIMAN
    Registered Users Posts: 33,135 ✭✭✭✭NIMAN


    I'd say worth a go.

    Got nothing to lose, and plenty to gain should it be accepted.

    What part of the country is it in? Some areas still very depressed and your offer might be good enough.


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    #5
    fro9etb8j5qsl2
    Closed Accounts Posts: 2,391 ✭✭✭fro9etb8j5qsl2


    Thanks we're in limerick, the market is starting to pick up a tiny bit in the last few months but yeah, overall it's still pretty much rock bottom. I guess I have some viewing to arrange then!


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    #6
    NIMAN
    Registered Users Posts: 33,135 ✭✭✭✭NIMAN


    I'd view first, bid later. Wouldn't let them know asking price is above budget, plus they probably aren't expecting to get offered the asking anyway.


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    #7
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭The_Conductor


    Prices have gone up nationally (on average) 14% this year to date- and close to 30% in the greater Dublin area.

    While it really depends on how desperate the sellers are to sell- the days of offering significantly below asking and having you hand bitten off- could very well be well and truly gone.

    There is most probably going to be a bit of a rush to buy and sell property between now and the end of the year- with the expiration of the CGT exemption at the end of the year- and the proposed new rules on mortgage lending due to come in on the 8th of January.........

    If the property is in an area where there haven't been any sales in a significant length of time (9 months- 1 year)- give it a try and see what happens.......

    If they laugh at you- I'd suggest keeping your powder dry- come January or February- you will find that your cash is worth a hell of a lot more to you, than it is in Q4 2014.........

    Put in your offer. See what happens. If they dismiss it- keep your powder dry- and try again in 3-4 months time- I'd be quite surprised if prices don't gently drift downwards to a new equilibrium from early next year onwards.


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    #8
    NIMAN
    Registered Users Posts: 33,135 ✭✭✭✭NIMAN


    The_Conductor wrote: »
    Prices have gone up nationally (on average) 14% this year to date- and close to 30% in the greater Dublin area.

    While it really depends on how desperate the sellers are to sell- the days of offering significantly below asking and having you hand bitten off- could very well be well and truly gone.

    Not true for all parts though.

    Up here in Donegal I'd say prices have not risen at all.
    Not sure about Limerick.

    I'd say still a buyers market for the majority of the country, and cash is king.


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    #9
    fro9etb8j5qsl2
    Closed Accounts Posts: 2,391 ✭✭✭fro9etb8j5qsl2


    Prices haven't really risen in limerick but since january, almost all of the cheaper properties that were sitting on the market for ages have been snapped up and houses that would have taken a year to sell before are now being bought up within weeks of going on sale. I suppose it's just a sign that the banks are lending more again but it will be interesting to see how the new lendong guidelines affect things in the coming months :)


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    #10
    iguana
    Moderators, Entertainment Moderators Posts: 12,915 Mod ✭✭✭✭iguana


    I just bought in Limerick and from what I can see sales have increased but prices have lowered. This tallies with the Daft Price Report that came out last week that shows prices in Limerick are down 4%. The market here seems to have been stagnant for a long time as sellers weren't being realistic but now they have lowered their expectations and things are moving. I saw a huge amount of houses last year where the (demoralised seeming) agents straight up told me that the vendor was being unrealistic and wouldn't accept less than X for the house and had rejected what they considered to be very good offers. Since then almost all of those houses have sold but according to the PPR it has been for an awful lot less than the vendors had wanted last year.

    Ime it's possible to get a house for good value (calculated from traditional income multiples and potential rental yields) which was my concern. I'm not going to ask what sort of budget you have but I've seen numerous decent condition houses in very nice family areas in city suburbs that have sold in the €70-90k bracket this year. Houses needing work but with excellent potential often go for less.


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    #11
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    iguana wrote: »
    I just bought in Limerick and from what I can see sales have increased but prices have lowered. This tallies with the Daft Price Report that came out last week that shows prices in Limerick are down 4%. The market here seems to have been stagnant for a long time as sellers weren't being realistic but now they have lowered their expectations and things are moving. I saw a huge amount of houses last year where the (demoralised seeming) agents straight up told me that the vendor was being unrealistic and wouldn't accept less than X for the house and had rejected what they considered to be very good offers. Since then almost all of those houses have sold but according to the PPR it has been for an awful lot less than the vendors had wanted last year.

    Ime it's possible to get a house for good value (calculated from traditional income multiples and potential rental yields) which was my concern. I'm not going to ask what sort of budget you have but I've seen numerous decent condition houses in very nice family areas in city suburbs that have sold in the €70-90k bracket this year. Houses needing work but with excellent potential often go for less.

    Dont trust Daft reports. All based on asking prices of property which means nothing. Only data that matter is the selling price. Would be interesting for the PPR to do a quarterly report of prices which would be much more accurate if done right.


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    #12
    iguana
    Moderators, Entertainment Moderators Posts: 12,915 Mod ✭✭✭✭iguana


    chris85 wrote: »
    Dont trust Daft reports. All based on asking prices of property which means nothing. Only data that matter is the selling price. Would be interesting for the PPR to do a quarterly report of prices which would be much more accurate if done right.

    Yes that's true. Looking at the PPR sale prices would be down quite a bit more than 4% but I don't think it can be denied that prices in Limerick are still falling or at very most bottoming out. It's just that when even the latest Daft Report which was bullish overall agrees with my anecdotes it lends them a little more credence.


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    #13
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    iguana wrote: »
    Yes that's true. Looking at the PPR sale prices would be down quite a bit more than 4% but I don't think it can be denied that prices in Limerick are still falling or at very most bottoming out. It's just that when even the latest Daft Report which was bullish overall agrees with my anecdotes it lends them a little more credence.

    You would be better doing some research comparing daft and PPR prices. A few others have posted similar for Dublin and quite interesting results where a lot of Dublin places where going below asking this and last years comparing daft and PPR figures and really dampened some of the info Daft were putting out in their reports.


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    #14
    fro9etb8j5qsl2
    Closed Accounts Posts: 2,391 ✭✭✭fro9etb8j5qsl2


    Yeah I've seen the figures on Daft differ by up to 40000 from the actual sale figures on the ppr. Am I right in thinking that it's a ploy by estate agents to try and keep the prices up or is it just that once a house has been marked as sold, Daft assume it sold for the asking price?


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    #15
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    Amir Wailing Machinist wrote: »
    Yeah I've seen the figures on Daft differ by up to 40000 from the actual sale figures on the ppr. Am I right in thinking that it's a ploy by estate agents to try and keep the prices up or is it just that once a house has been marked as sold, Daft assume it sold for the asking price?

    Daft don't assume any sale price. Their report clearly state its based on asking price. Asking price is useless as some may be looking for higher or lower than they expect depending on the tactic choosen to sell I guess.


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    #16
    MouseTail
    Registered Users Posts: 1,663 ✭✭✭MouseTail


    It really depends on who is selling. There was deals on receivership sales, and Iguanas experience would indicate there still are, but I would imagine that level of discount is extremely rare from a private sale.


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