First time buyer query - what to offer

caramel08

Hi,
I am a first time buyer interested in a house that has a current asking price of 182k. How low should I go when making an initial offer?

Thanks

RentDayBlues

As low as you want, you're trying to buy the house not please the estate agent. If they house is only worth €100K to you then you start lower than that. Work out what is the maximum you can spend and use this as an offer guide

jetski

Excellent advice from the previous poster. Spotted a lovley house myself, 6 bed on 4 acres in Dublin for €2M, personally i can only afford to day 50k so going on your advice im in with a chance, and certinly not going to waist everyones time and make a complete tit out of myself.... happy days.

The OP shouldnt be asking advice for a descission that will affect his whole life more or less on a public internet forum. seek professional advice and do the leg work yourself, we all have biast opinions here.

whizzbang

Whatever you do be sure to look up the house on www.irishpropertywatch.com so you know how long it has been on the market and what they have been doing to the price.

Duckjob

jetski wrote: »

Excellent advice from the previous poster. Spotted a lovley house myself, 6 bed on 4 acres in Dublin for €2M, personally i can only afford to day 50k so going on your advice im in with a chance, and certinly not going to waist everyones time and make a complete tit out of myself.... happy days.

Thats right Jetski, work that buyer fear of looking foolish

The OP shouldnt be asking advice for a descission that will affect his whole life more or less on a public internet forum

Eehhhhhh, public forum. OP can ask what he/she likes. And people can give the opinions that the OP is asking for.

seek professional advice and do the leg work yourself

who would this professional advice come from now Jetski? An estate agent? A developer?

, we all have biast opinions here.

True, and one has to assume that the OP recognises this and wants to get a cross section of these biased opinions.


@OP, first reply is good advice. Decide how serious you are about buying right now and price your offers accordingly.

Try not to think in terms of a fixed percentage off asking when making offers. Instead try to gauge how realistic the asking price is in todays market in the first place and work from there.

Many current asking prices are off the wall and have little or no chance of selling in todays market. Of these, some are sellers just chancing their arm, others are simply delusional. The ones chancing their arm will likely accept lower offers put on the table. The delusionals will hold out for their silly price and will not sell their property.

Rafa1977

Offer whatever you think the house is worth to you. We offered 200k for a house yesterday, where the asking price is 299k, the estate agent told me that the seller wont sell for something as low as that and that the house is worth a lot more than 200k, but he has to say that as low sale for him equals low commission. Most of the stuff that comes from their mouths is lies and such crap. Dont be scared to put in a really low offer, yes it maybe rejected but you can up your offer or go somewhere else, as it is very much a buyers market now.

rugbyman

Step 1, convince the agent or seller that you have the funds, or mortgage approval.

Step 2, offer far less than you would be inclined to.( I do not mean 50 k for a formerly 2m house) Lets say 60% of asking price, provided the asking price relates to a recent sale in the area.

Step 3, ask for an answer by return, or withdraw the offer.

Rugbyman

ei.sdraob

research house prices in the area (what sold, what hasnt and for how much), plot everything in excel

then take 20% off, and work your way from there with EA, see what else they can throw in to the pot

remember if your are not embarrassed by the offer then its not good enough

Jo King

caramel08 wrote: »

Hi,
I am a first time buyer interested in a house that has a current asking price of 182k. How low should I go when making an initial offer?

Thanks

The asking price is the wrong place to start! It may be a house which might on a good day make 195K but the owners want a quick sale. On the other hand it may be a house which should only get 160k and the owners are hoping that some idiot thinks 175k is a good bargain.
In order to know what to offer you need to train yourself as a valuer. After looking at a particular market segment for a few months and trying offers you should be able to value houses reasonably accurately. Once you can value a house you can then check the asking price and decide if it is worth going for it. If it is way too high forget it. If it is too low, try and find the catch. Do not be afraid to pay more but beware of being hooked into a bidding war.

Eurorunner

Would be more transparent for all if they implemented the same system as in the UK - and recorded actual sales prices with that info being available to anyone who has an interest...

ellejay

ei.sdraob wrote: »

remember if your are not embarrassed by the offer then its not good enough

Excellant Excellant advice, you can always go up, very hard to go down once sale agreed.

Can you give an indication of area, house size and age? (just curiosity)
It could be, that the asking price is as realistic as it gets for that seller.

As a previous poster said, have a look at what other houses were asking and recently sold for in the area.

Personally I think if it means knocking on a strangers doors who have just moved in, what harm?!!!

seamus

Rafa1977 wrote: »

Offer whatever you think the house is worth to you. We offered 200k for a house yesterday, where the asking price is 299k, the estate agent told me that the seller wont sell for something as low as that and that the house is worth a lot more than 200k, but he has to say that as low sale for him equals low commission.

Actually he has to say that because the seller won't sell at that price. The agent can't force the seller to accept an offer and probably already knows what the absolute minimum is. If the seller is asking 299, and has a mortgage for 250, then he's simply not going to accept anything less than 250, at the minimum. Whether the house is worth that or not is irrelevant - your offer isn't guaranteed to be accepted if it's what the house is worth.

Most of the stuff that comes from their mouths is lies and such crap.

Yep, and be particularly wary of them telling you that the seller will throw in X and Y appliances. They often do this to get the sale in the hope that the buyer won't realise it's not on the contract or the buyer won't be bothered with chasing it.

ei.sdraob wrote: »

research house prices in the area (what sold, what hasnt and for how much), plot everything in excel

then take 20% off, and work your way from there with EA, see what else they can throw in to the pot

I'd say that's pretty much the best advice, but keep in mind the price of the house. If your calculations above show that you should offer €190k, then take 10% off the €182k as the low price indicates a desperate seller.
€182k may be on the lower end of the scale in that area, so you may not be able to take much more than 10% off - as I mention above, the seller is probably not going to sell to you at any old price; They will have their own debts to clear and will simply stay put if they don't get a high enough offer.
On the other hand, €182k may be on the higher end of the scale, where the average asking in the area is €170k, so you can offer €140k and be serious about it.

Remember that it's business, not personal. If someone gets upset at a low offer, then they've lost sight of what's going on and they're likely to waste your time or cause hassle in other ways. Don't be embarrassed at throwing in a low offer, and don't be afraid to keep your cards close to your chest:

- Never, ever, ever, ever tell an EA how much you have been approved for, or how much you can afford.
- Every time you increase your offer (*if* you increase your offer), tell the EA that you've had to move money around and make promises and that you're absolutely stretched to your limit.
- Fight for every euro. You can be sure that the seller will. Every €1k added onto the offer will increase the length of your mortgage by about a month.

mmalaka

Hi...

Sorry to hijak this post...

I am in the same position as the OP... first time buyer...intersted in a 3 bedrooms house in Lucan-Castle Riada state...the asking price is 270k...would like to know your view on the price

Thanks

jimmycrackcorm

mmalaka wrote: »

Hi...

Sorry to hijak this post...

I am in the same position as the OP... first time buyer...intersted in a 3 bedrooms house in Lucan-Castle Riada state...the asking price is 270k...would like to know your view on the price

Thanks

You would definitely get away with an offer of 240k but I'd doubt you can go lower unless it's a forced sale. Live in the area and am aware of a couple of sales that went through recently.

ei.sdraob

on some further thinking (and as someone who had to recently do this)

its all about research, research research, i spend days upon days gathering info on houses in area, also had a chat with a neighbor about the area and what he would offer


if your looking in a rural location, the options widen

since then you can find the cost of a similar plot of land and work out a rough cost to build, obviously enough no one will sell less than cost to build

oh i know it might be hard, but dont get attached to any particular house, if your gut is not happy about something then listen to it

fletch

Recently offered 80% of the asking price of a property. Estate Agent sounded disgusted at me and told me that my offer was totally irrelevant. Are people really getting away with offering such low first bids...60% sounds extreme

Colonel Sanders

jimmycrackcorm wrote: »

You would definitely get away with an offer of 240k but I'd doubt you can go lower unless it's a forced sale. Live in the area and am aware of a couple of sales that went through recently.

You can rent a 3 bed in Lucan for less than a grand a month

Using a 6% yield would imply a value of about 190k (I assumed a rent of 950 a month and also used 12 months rent rather than 11)

And this doesn't factor in that rents are still falling (and IMO will continue to fall) and there is no shortage of rentals in Lucan

I'm not saying that a house couldn't sell for more than 190k at present but looking at rentals you'd be mad to pay any more

gurramok

fletch wrote: »

Recently offered 80% of the asking price of a property. Estate Agent sounded disgusted at me and told me that my offer was totally irrelevant. Are people really getting away with offering such low first bids...60% sounds extreme

It depends how pushed the seller is. Some are only testing the market and others are desperate to sell. Its the latter that has turned the tables towards buyers since the bubble years.
I do know of one 3bed place which had an asking of 250k(reduced from 290k) and ended up been sold for 180k with only one buyer interested.

leahyl

Hi all just came across this thread and thought i would ask what you thought here - i spotted this house in Cork on the Ballinlough road - terraced, 3 bedroomed has just been refurbished - looks lovely from the pics - 285 grand. I'm totally new to all this house hunting stuff - i was just half thinking about moving out of the family home and was wondering if i were to 'haggle' how much would i get off this price?

http://www.daft.ie/searchsale.daft?s%5Bcc_id%5D=ct3&s%5Ba_id%5D=341&s%5Bmnp%5D=&s%5Bmxp%5D=&s%5Bbd_no%5D=&search=1&s%5Bsearch_type%5D=sale&s%5Bfurn%5D=&s%5Brefreshmap%5D=1&search_type=sale&refine.x=21&refine.y=9

it's the second one on this page

johndaman66

ei.sdraob wrote: »

remember if your are not embarrassed by the offer then its not good enough

ellejay wrote: »

Excellant Excellant advice, you can always go up, very hard to go down once sale agreed.

I'd second that assuming ei.sdraob means bad as opposed to good depending on what way you look at it. Also in addition do remember that perhaps your greatest bargaining tool if you are a buyer is that you can walk away at any stage and bear that in mind throughout the bargaining process.

On the assumption that you are taking out a mortgage OP make sure you stress test it before you buy. For example if interest rates shoot up next year or in 2011 (which many commentators are now predicting is inevitable) such that so too will your mortgage repayments shoot up will you still be able to afford the expected mortgage repayments. If you are taking out the mortgage with a partner and one of ye is made redundant and out of work for a year or more how would this affect yer repayment capacity, unexpected pregnancy, flood damage not covered by insurance, etc etc. Not saying any of these scenarios may pan out (apart from interest rate rises which surely is a certainty over the lifespan of any mortgage being taken out these times) but you should theoretically play out the scenario or a combination thereoff if they are a possibility.

johndaman66

fletch wrote: »

Recently offered 80% of the asking price of a property. Estate Agent sounded disgusted at me and told me that my offer was totally irrelevant. Are people really getting away with offering such low first bids...60% sounds extreme

I tend to get the same reaction from estate agents. I'm sure the fact that I'm not a very decisive person doesn't help but in general when discussing a house price with an estate agent it typically goes something like this.

"He had the house on at 250k 15 months ago and it didn't sell. He is now asking 210k, I'll have to check but think he'll accept 200k and that would include kitchen appliances and blinds. I have another guy to look at the house tomorrow evening also"

The general impression I get is don't even bother trying to bargain as that's the lowest price I'm giving you and nothing lower will even be entertained.

I would also seriously question whether offers of as low as 60% of asking prices is being accepted as has being previously suggested in the forum. Is this akin to drunken pub talk or whats the story? Surely a sane and serious seller would price the property at much closer to the accepted price of 60% of asking price in the first place to generate interest in the property?

Straffan1979

Intersting post,
I'm currently looking at a house that was for long time on the market at a €440 000...I think higher during the real good times.
It recently dropped to in the region of €360 000. How do people read the term 'in the region'. I'm strongly considering making an offer 0f €290,000
in the new year...Its a big game with the EA.
I've gone and sat down with an EA to look at a derelict houses/sites etc...one for €150 000 comes to mind. Before I even opened my mouth I got the line...'now I've had an offer of €115 000 on this and thats been rejected outright by the seller'...basically trying to set the bar. I didn't make an offer...judging by the drop in price of 0.5 acre sites in same area its only worth €75000.

Just on the 60% thing. If you take a 290 000 offer now on the asking price of 440000 which this house was for sale in November ...It would be offering 65% of the value. Now obviously it has dropped but an offer well below €440 000 obviously would have been considered all last year!

ei.sdraob

Straffan1979 wrote: »

.judging by the drop in price of 0.5 acre sites in same area its only worth €75000.

well lets do some maths

75K for 0.5 acre (quite reasonable) with planning
+
build an average sizish house 200sq m @ a round figure of 100€ per sq

were looking at 275K

johndaman66

ei.sdraob wrote: »

well lets do some maths

75K for 0.5 acre (quite reasonable) with planning
+
build an average sizish house 200sq m @ a round figure of per sq

were looking at 275K

Your saying 275k seems good or bad ei.sdraob or just meerly pointing out the figure? To me it still seems a lot of banana's never mind the 350k it would be working out at if Straffan were to pay full asking price for the site. Location, specification and quality/ level of finish would need to be taken into account also no doubt. 200sq m seems to be considerably on the large size of average to me...Then again I may be thinking more in terms of your more regular 3 bedroom semi detatched and hence 200 sq metre may well be the average for a detached bungalow or dormer.

Also 200 sq m by €100 equals 20,000. I'm by no means an expert but €100 per sq metre seems incredibly low to me, even €100 per sq foot would be on the low side I'd be thinking so I assume you mean €1,000 per sq metre?

Straffan1979

I think just to get back to the point of this tread...I was merely throwing out an example of how EA's in my experience will try and push you towards a price where they want to seal the deal...with lines like 'now i've had an offer of x amount on this property that has been rejected outright' are commonplace in my experience...ie don't even think of offering less....bolloxology.
At the moment there are very few offers on any properties and many guide prices haven't moved south much since the celtic tiger days...They count for nothing.I think alot depends on how badly the seller needs to get rid of a house.
I'm coming round to the lads thinking that if your not embarrassed by your first offer its not low enough!

ei.sdraob

johndaman66 wrote: »

Your saying 275k seems good or bad ei.sdraob or just meerly pointing out the figure? To me it still seems a lot of banana's never mind the 350k it would be working out at if Straffan were to pay full asking price for the site. Location, specification and quality/ level of finish would need to be taken into account also no doubt. 200sq m seems to be considerably on the large size of average to me...Then again I may be thinking more in terms of your more regular 3 bedroom semi detatched and hence 200 sq metre may well be the average for a detached bungalow or dormer.

Also 200 sq m by €100 equals 20,000. I'm by no means an expert but €100 per sq metre seems incredibly low to me, even €100 per sq foot would be on the low side I'd be thinking so I assume you mean €1,000 per sq metre?

oops sorry! mixed up my feet with my meters!

sorry i mean when building €100 per square foot is not bad at all, you can check many threads in this forum , some people have a cost to build of €75 per sq foot and some have over 120 per sq foot

so
* land 0.5 acre @ 75K (seems a little expensive, can get an acre with permission in galway country for 50K)
* 200 sq meter 4 bed dormer -> 2100 square feet, thats fairly average size of new-builds around east co galway
thats 2100 * 100 = €210,000

€210 + 75 = 285K

now can get something like above done for cheaper of course, around 220-230 since costs have gone down, and there are newbuild houses that price range for that price around galway nowadays which i would imagine is very close to cost price


to the side of my table is a surveyors report for 195 sqm house to complete, the surveyor put down a figure of 93 euro a sq foot so i could be a bit generous here

of course the price of land with a good permission is what matters most

Freddie59

jetski wrote: »

Excellent advice from the previous poster. Spotted a lovley house myself, 6 bed on 4 acres in Dublin for €2M, personally i can only afford to day 50k so going on your advice im in with a chance, and certinly not going to waist everyones time and make a complete tit out of myself.... happy days.

The OP shouldnt be asking advice for a descission that will affect his whole life more or less on a public internet forum. seek professional advice and do the leg work yourself, we all have biast opinions here.

1. Who would give this 'professional opinion'?:rolleyes:

2. The 'biased' opinions on here are probably the voices of reason, trying to prevent you from getting screwed.

Try these sites as well:

www.irishhousehunter.com

www.thepropertypin.com

Just to give you an example of how volatile things are, here's what happened with us:

Sold in November 2008 (did very well). Viewed a house in August. Three houses for sale in same estate (nice area, 100 homes). Tow on at €299k and €287k respectively.

The one we looked at (in better nick than one of the others) for €195k (executor sale). Settled for €175k. So - my advice to you is sit tight, and keep a close eye on Daft.ie and the irishhousehunter site.

It will pay you dividends. Remember - you're talking about saving TENS of thousands of Euro over the lifetime of your mortgage. So be very, very careful.

Best of luck with it.:)

ei.sdraob

^ a fellow pinster so

good site it is, tho some of the people there are of the "stock up on beans as the end of the world is nigh" opinion, but otherwise alot of good info on that site to knock sense into any prospective buyers

Freddie59

ei.sdraob wrote: »

^ a fellow pinster so

good site it is, tho some of the people there are of the "stock up on beans as the end of the world is nigh" opinion, but otherwise alot of good info on that site to knock sense into any prospective buyers

Oh yeah. That site saved us THOUSANDS of Euro.:D

Idbatterim

OP are you in a rush to buy? be wary of catching a falling knife! whatever you borrow to buy the house will be doubled atleast by the time you have paid it back! interest rates are the lowest they will ever be and will rise! Regarding the comment about seeking proper advice IMHO you have come to the right place! where is the OP going to go and seek good IMPARTIAL advice from? her bank, the estate agent, or someone with a crystal ball? Dont make me laugh! Whatever you do, do not offer the asking price! There are so many factors that could influence the sellers decision and thus the final selling price!

johndaman66

Straffan1979 wrote: »

I think just to get back to the point of this tread...I was merely throwing out an example of how EA's in my experience will try and push you towards a price where they want to seal the deal...with lines like 'now i've had an offer of x amount on this property that has been rejected outright' are commonplace in my experience...ie don't even think of offering less....bolloxology.

That would pretty much sum up my experiences of dealing with Estate Agents too. No doubt they are preying somewhat on the fact that people who aren't accustomed to bargaining will blindly accept and pay asking price or very close to it. Do try and bear in mind though that their job is to get the best price possible for the seller. While some have less scruples than others try not to loose sight of the fact that their job in acting as agent for the seller is to get best price possible for property and/ or maximise their commission which is no doubt a higher priority among many.

Straffan1979 wrote: »

At the moment there are very few offers on any properties and many guide prices haven't moved south much since the celtic tiger days...They count for nothing.I think alot depends on how badly the seller needs to get rid of a house.

Would agree with this also. Despite all the talk of seemingly hugh price drops it would appear to me that asking prices remain very high (stupidly high in many cases). Maybe I'm wrong but I think sellers with silly high asking prices are just testing the water and have no real intention or even half realise they will not sell at all with advertised price.