Would you pay asking price or more for the right house?
Discussion
When I moved into my current place a year ago, I put an offer in at asking price as it was the only house about that fitted our requirements. I am sure I could have got £5k off or maybe even £10k, but for me as it ticked all the boxes and therefore it was worth it. If it had been up for more, then it would not have been worth asking price to me.
grumbledoak said:
Don't fixate on the 'asking price', it's just a number pulled out of the air by a twerp in a bad suit. Ask yourself what you would pay to live there, ask said twerp what it would cost to secure it, and offer the smaller of the two.
If there was a like button, I'd click it. You've pretty much summed up buying a house to me. I recently went to look at a studio apartment advertised at £55K
I also found that the price to rent one would be about £300, including the agents cut.
I found out on right move history that the owner had paid £78K for it.
I offered £46K - Cash (BACS really) and was turned down. (I would use it monday to friday for 12 months or maybe longer and then rent it out, so figured anything more would be silly)
I asked the agent what it would take to buy it and they said "close to £50K" and I said "£46K it is then"
4 months later they have re-priced it at £50K.
I still don't understand how anyone paid £78K for it.
Hoofy said:
Dizeee said:
as people never really do this do they?
All the time in London. Open days really result in a case where offers creep above the asking price unless the property is awful and estate agents know this. 10-15 years ago, it was rare to get open days. You'd make an appointment etc.Your best strategy if you both like the place is to go around criticising everything and putting other buyers off.
In many parts of London the asking price is merely the starting point in negotiations.
Paid asking price for my first house 30 years ago. Didn't really have an option, as it was a development corporation new build, on shared ownership. Bought the final share 3 years later, at the original price.
Second house, I paid £64k, advertised at £70k.
Third and probably final house I paid £205k, advertised at £230k.
Surely if the agent has done their job correctly, any house will be valued at just a little bit more than the maximum that the market will bear?
BTW, this got me thinking - how much have I actually spent in total on houses over the last 30 years?
The answer, including interest only mortgage payments, endowment policy, lump sums for capital repayment and the upgrade cost when I last moved, and improvement works, is £160k. For that, I've got a house that's now worth £260k, and somewhere to live for the next 30-odd years.
It would've cost me more than that to rent somewhere, and I'd be paying around £800 a month for the next 30 years too.
Makes me realise how lucky I've been. Makes me feel bad for the average person, who stands no chance of buying now.
Second house, I paid £64k, advertised at £70k.
Third and probably final house I paid £205k, advertised at £230k.
Surely if the agent has done their job correctly, any house will be valued at just a little bit more than the maximum that the market will bear?
BTW, this got me thinking - how much have I actually spent in total on houses over the last 30 years?
The answer, including interest only mortgage payments, endowment policy, lump sums for capital repayment and the upgrade cost when I last moved, and improvement works, is £160k. For that, I've got a house that's now worth £260k, and somewhere to live for the next 30-odd years.
It would've cost me more than that to rent somewhere, and I'd be paying around £800 a month for the next 30 years too.
Makes me realise how lucky I've been. Makes me feel bad for the average person, who stands no chance of buying now.
While this sport of thing does happen in London and even on specific properties in the suburbs of London from what I have seen. I don't think it's common place. Worth doing some research on sold prices in e immediate area if you're worried about overpaying. But really grumbledoak has nailed it.
Nearly every house round my way that is any good has an open day, it doesn't always produce a buyer.
Nearly every house round my way that is any good has an open day, it doesn't always produce a buyer.
Amazing response and very honest replies, very grateful for those. I have had my wife read the thread - we are both very interested in the viewpoint. We agree with pretty much all of it. This for us is everything, it may not be the usual powerfully built PH poster's abode, but it is well in advance of what we thought we could ever buy. The house we are currently in is too, don't forget this is actually a sideways move for similar value. Amazing what 3 miles can do for your budget.
I am happy to disclose the house below, the open day is done, furthermore our buyers came round today to meet us and there is absolutely no rush. The chain beneath us is solid, they have first time buyers and our buyers are first class. We have set a price we are happy to go with this house to but have done nothing other than submit our offer on the doorstep after we viewed on Friday which is merely a footprint for us to be included in negotiations. Our offer is typed beneath the house link at bottom of post.
We are all too aware this could all be agent frenzy and keen not to appear over keen hence why we have seen, offered and remained quiet. We can exceed the asking price by 16k on paper but are looking at avoiding our max. Yes there are risks in posting all this on a public forum, but the price we are prepared to pay remains no matter what, and the chance of any of this getting to anywhere that matters is so remote that it is well worth gathering the PH opinion in my view. As has been said, there ARE other houses and after meeting our buyers today we are now totally comfortable in our position, which is under offer, mortgage agreed and with a solid chain.
The house : http://www.rightmove.co.uk/property-for-sale/prope...
Our initial offer to get us into the loop was 382'500. This will have to rise, I am sure. Our budget was 400k. Having spoken to our mortgage broker we have a max purchase price of 416k. We are thinking of an offer of 408k ish.
It is a blinding house with an amazing load of space and finished to a level that we would not need to do anything at all.
:-)
I am happy to disclose the house below, the open day is done, furthermore our buyers came round today to meet us and there is absolutely no rush. The chain beneath us is solid, they have first time buyers and our buyers are first class. We have set a price we are happy to go with this house to but have done nothing other than submit our offer on the doorstep after we viewed on Friday which is merely a footprint for us to be included in negotiations. Our offer is typed beneath the house link at bottom of post.
We are all too aware this could all be agent frenzy and keen not to appear over keen hence why we have seen, offered and remained quiet. We can exceed the asking price by 16k on paper but are looking at avoiding our max. Yes there are risks in posting all this on a public forum, but the price we are prepared to pay remains no matter what, and the chance of any of this getting to anywhere that matters is so remote that it is well worth gathering the PH opinion in my view. As has been said, there ARE other houses and after meeting our buyers today we are now totally comfortable in our position, which is under offer, mortgage agreed and with a solid chain.
The house : http://www.rightmove.co.uk/property-for-sale/prope...
Our initial offer to get us into the loop was 382'500. This will have to rise, I am sure. Our budget was 400k. Having spoken to our mortgage broker we have a max purchase price of 416k. We are thinking of an offer of 408k ish.
It is a blinding house with an amazing load of space and finished to a level that we would not need to do anything at all.
:-)
Dizeee said:
May I refer your new neighbours to the following threads?http://www.pistonheads.com/gassing/topic.asp?h=0&a...
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
We've bought three houses. First two were rather dull identikit Wimpey/Barrat boxes on huge 1960 developments in mid Essex, bought because all we were looking for was somewhere to live near good schools and both our jobs, and the third is a quirky C18 farmworkers cottage on the edge of a rural village on the Essex/Suffolk borders because it's the little country home miles from anywhere we've always really wanted.
Paid around 15% under asking for the first two as we knew if we lost that particular house to a higher offer another similar one in the same area would come on the market pretty quickly so we'd just try an offer on that one instead, and paid full asking on the third within hours of it coming on the market as it was perfect for us and pretty unlikly we'd find another.
Deciding to go to full asking or playing the OIRO game depends on how much you want the house and the local supply and demand I guess.
Paid around 15% under asking for the first two as we knew if we lost that particular house to a higher offer another similar one in the same area would come on the market pretty quickly so we'd just try an offer on that one instead, and paid full asking on the third within hours of it coming on the market as it was perfect for us and pretty unlikly we'd find another.
Deciding to go to full asking or playing the OIRO game depends on how much you want the house and the local supply and demand I guess.
Well today has come (Monday) and I had to chase the agents today for an update, which Im a little perterbed by, however they had a couple of open days on Sat so I understand.
At close of play today they got back to me saying they had put forward the offers to the vendor who had to discuss it with their husband during the evening in order that negotiations start Tuesday. Guess that's fair.
I did get out of them that there were 3 offers including ours and that we were sat at 2 out of 3 in terms of value offer. They have intimated on both occasions though that it is not value but position that counts - I had told them we had a solid chain (having met our buyers on Saturday who are dream buyers, in love with our house and happy to wait as long as it takes with their buyers being first timers who feel the same about their property). I got the impression we may be the only ones proceed able but I can't confirm that.
Either way we have gone in low and there is huge margin left for us yet, up and above asking price. My instinct is that we will get it. I just feel things have been slow as I wanted this wrapped up today. I will be asked tomorrow to raise my offer I am sure, and I will. I wonder whether I am underestimating the strength of our position, so now wonder how far to go with upping my offer. They know we are serious and know our position is about as good as it gets.
Watch this space.
At close of play today they got back to me saying they had put forward the offers to the vendor who had to discuss it with their husband during the evening in order that negotiations start Tuesday. Guess that's fair.
I did get out of them that there were 3 offers including ours and that we were sat at 2 out of 3 in terms of value offer. They have intimated on both occasions though that it is not value but position that counts - I had told them we had a solid chain (having met our buyers on Saturday who are dream buyers, in love with our house and happy to wait as long as it takes with their buyers being first timers who feel the same about their property). I got the impression we may be the only ones proceed able but I can't confirm that.
Either way we have gone in low and there is huge margin left for us yet, up and above asking price. My instinct is that we will get it. I just feel things have been slow as I wanted this wrapped up today. I will be asked tomorrow to raise my offer I am sure, and I will. I wonder whether I am underestimating the strength of our position, so now wonder how far to go with upping my offer. They know we are serious and know our position is about as good as it gets.
Watch this space.
Renovation said:
The "rules" of sealed bids are clear but 95% of sellers will break their own / agents "rules" when a higher bid is received.
If an agent receives an offer for a house they are marketing they legally have to present it to the vendor within 24 hours. Sealed bids in principle are a good idea, but an agent can't refuse to put forward an offer after the event.
Edited by FrankAbagnale on Tuesday 21st April 09:03
FrankAbagnale said:
I would take the figures out of the above or it could be the most expensive post you've ever made!
If the agent, a colleague, a friend of the owner etc read this they know your max purchase price.
Yes, I would remove the latter two figures however I don't see this going well for the OP. On the one hand he says:If the agent, a colleague, a friend of the owner etc read this they know your max purchase price.
Dizeee said:
However, this house seems to be extremely good value for what else is available for the same price. As a result there is some serious interest, and basically tomorrow there is an open day, which is the only few hours that anyone can view it. The open day is crammed full. There have also been a few special pre visits, such as ours today, for those who are very serious about it that cannot make the open day. It has taken a week of pestering to even get through the door but we managed it. Although offers will not be considered until open day tomorrow, we have submitted one to the agent as we are not attending tomorrow. I believe the other couple who have seen it early have done the same, and I have no doubt many more will follow.
So it sounds like the agent has pitched the price low to try and get a bidding war going and bid up to the 'reserve' price but knowing all of the above the OP has bid 5% below and this may mean that the seller views him as hard work so his future bids will be the least preferred ones. You never know though.Dizeee said:
What are your thoughts?
If it's a forever house and there is doubt that you might secure it - pay what you can afford to pay within reason.We were looking for 2 years and hardly anything came up that ticked our boxes in the area we wanted to buy. Anything that was suitable went in a matter of days. Our house was not on the market as the initial plan was wait until something suitable came up, then sell ours in order to buy.
It became evident this strategy wasn't going to work as the market in our area was slow and we didn't want to miss out on anything that came up. We then changed strategy to just sell ours and if necessary rent until something suitable came along, and we would be in a very strong position.
In the end, fate struck and just as we sold ours a perfect house came up for sale. Such is the demand in the area though was that including ours, they had three asking price offers the first day the house was open to viewings. So it was decided to go to sealed bids. Luckily for us the house was quite a way under our maximum budget so we had a little flexibility to bid over the asking - we went 3% over which was a reasonable sum, and just crossed our fingers.
Luckily our bid was the one that was accepted and we have been in now for 6 months. The house is amazing and will be our family home for at least a couple of decades until such time as if we ever need to downsize, so for us going a little over was insignificant in the grand scheme of things.
Good luck with yours!
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