Advice needed re: offer made on Mayo house.

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PaulyB63

Registered User
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Hi All,

Myself and my missus are in a good position to purchase a semi-rural mayo house. It's near to westport and has been on the market for about 2.5 years. It has had one price reduction just over a year ago from 350k to 325k. We viewed it initially last December and at that stage hadn't sold our Dublin house. We liked it immediately.

In the meantime, we sold our dublin property (broke even), moved into a rented property in westport to see if we liked the area and kind of put searching off 'til closer to the end of our lease.

The time is nigh, so we have arranged a new viewing of the property, which has, by the estate agents asmission, received no viewings and/or offers and is pretty much stale on the market.

I have looked into the 2003/4 price regions for the type of property and area etc. and the asking price would have been about 190 - 210k..... I am certain this is where asking prices are headed as that was a more natural house price level at that stage before the madness ensued...

I have offered 200k and the estate agent basically laughed at me and said that this offer was plainly ridiculous.

Am I way off the mark here?? I really, genuinely don't think I am.... Of course the vendors don't need to accept but is the offer wrong??

Opinions welcome please!!

Thanks for reading!
 
if its been on the market for two and a half years with no viewings...then i dont see what the EA is laughing at!
 
That's how I feel.

We are serious purchasers, making a serious offer. I have my doubts that she even spoke to the Vendors tbh...
 
I'd say the EA didn't mention it to the vendor. That would be normal practice if they didn't think the offer was in the right ball park.
Don't understand why, it's up to the vendor not the EA.

With regard to the offer, prices might be headed in that direction but they aren't there yet. You seem to be looking to get it for the value you expect it to be worth in 12 or 18 months time.
 
"I have my doubts that she even spoke to the Vendors tbh..."
"Maybe go direct to the owners themselves? "
"I'd say the EA didn't mention it to the vendor. "

Lads, lads..............

You don't know this and it is so highly unlikely that an EA would not tell a vendor about any offer being made, its actually laughable. AND remember - lots of vendors don't want prospective purchasers by passing the EA. Personally, I'd hate to be dealing with purchasers if I was selling.

Vendors do not have to accept offers. It really is as simple as that.

Is your offer wrong? No - you are free to offer anything you want. If your question is, why will they not accept my low offer, its because they do not want to sell the house at the price you are willing to pay.

mf
 
Knowing EAs in this current climate, they definitely would have given the offer to the vendors (after the laugh of bravado).
EAs work on commission, they'll be delighted to see the house sell, 1% of 200k might keep the wolf from the door for a wee while longer. It's better than 0% of 325k.
 
Agree - The offer should be based on what you believe to be the current market value. You could estimate this figure on whatever evidence you can gather based on current listings in the area, time on market etc. If you think its gonna be worth that little in future then why would you even be attracted to the property in the first place? If you can say with confidence that the price could fall as low as your are offering then what is to say its not gonna fall further. Why not just continue to rent if you place such a low value on owning the property?
 
sanne said:
Agree - The offer should be based on what you believe to be the current market value. You could estimate this figure on whatever evidence you can gather based on current listings in the area, time on market etc...
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But isn't that the crux of OP's problem?

You cannot arrive at a realistic valuation based on "listings in the area, time on market etc." because of the current state of the market; the only realistic way to arrive at a valuation would be to know what similar properties in the area are selling for and the only people to give this number would be the EAs. :eek: (fat chance, as they work for the vendors)

One possible solution might be to have an independent surveyor i.e. your surveyor, in and to base you offer on that valuation.
 
sanne said:
Agree - If you think its gonna be worth that little in future then why would you even be attracted to the property in the first place? If you can say with confidence that the price could fall as low as your are offering then what is to say its not gonna fall further. Why not just continue to rent if you place such a low value on owning the property?
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We're looking at this property as a home rather than to sell on. It does have a decent garden and while you could live in it as it is, it does need modernisation in the form of new kitchen and bathroom. On top of this it is a small house overall. My view is why should I buy something at current market value in a falling market? I don't want to have a bigger mortgage then is neccessary. The reason I offered what I did is bec thats what I believe it will end up being worth therefore in my mind that is a fair price to pay. I can rent and have no problem renting, if the house is still on market in a few months then maybe they might start taking it seriously.

Back to original question am I deluding myself in offering what I did which is roughly 35% off the asking price? To me current market value is irrelevant until the market starts to recover and rise again - anyone else on same page?

I know the vendors don't have to accept, if I was them I would rent the property and try sell it again when market rises bec as things stand it loses value for every day it is for sale at present.

EA attitutes in area kinda annoying me to say the least but these are confusing times for all concerned.
 
I do not think you need to start spending you're hard earned on a surveyor to determine the value of the property. Any potential purchaser who has done enough viewings in the area in and around their budget KNOWS the current market value of the property when they get to the offer stage. If you don't have a feel for the current market value you should not be making an offer.

Determining the future value is the hard part (unless you happen to have a crystal ball).
 
sanne said:
Agree - The offer should be based on what you believe to be the current market value. You could estimate this figure on whatever evidence you can gather based on current listings in the area, time on market etc.
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It's not unusual for house buyers to base their purchasing decisions on their beliefs about how the market will fare in the future. During the boom many people rationalised high prices because they assumed prices would be even higher in the future. It's not surprising that now buyers are factoring in assumed drops in the future.

It's all very well saying that the decision should be based on the current market value. But what exactly is that? In many places there is a big disconnect between asking prices and selling prices. Looking at listings will often tell you little about the current market value.

The OP says that the price has not changed in a year. Yet the Irish economy has changed dramatically since then. Most people would have scoffed at the idea of a recession 12 months ago, let alone the potential collapse of the Irish banking system. Whatever about the future it's not unfair that the OP is factoring in those changes into their bid.

Of course if the vendors are in no hurry to sell they are perfectly entitled to turn it down. This doesn't excuse the dismissive and unhelpful attitude of the estate agent.

Only time will tell how eager the vendors really are to sell. OP you might simply want to continue to rent in the meantime and maybe look at other properties.
 
mf1 said:
Is your offer wrong? No - you are free to offer anything you want. If your question is, why will they not accept my low offer, its because they do not want to sell the house at the price you are willing to pay.
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I am not asking why they are not accepting my low offer, I am asking am I correct in speculating on future value? I have no intention of ending up in the negative equity trap because I offer "current market value".... As another poster stated, current market value is based on sale completions and is impossible to calculate on your own.... But.... Has anyone seen (m)any SOLD signs in rural, semi-rural, urban or otherwise Ireland lately???
 
I think your offer was a fair in your eyes but a bit of a joke really.

It's obvious that when all is paid out of your 200,000 offer by the seller that they may well end up with less than they started out with.

What annoys me with this is that they have been selling it for 2.5 years, that means even at 350K people still believed it to be overpriced when times were good.

I think an offer of 230 - 250K is all the seller should be expecting and fair current market value for the property and the fact its not a re-sale your looking for and a family home, by the time you may come to re-sell in the far future, it will have stabilised and more than likely gone up in value anyway.

I think more of your type offer is needed to be fair, glad to see you have the balls to do it, laughable as it is!
 
I reckon you moved too soon with your offer.

2.5 years is a long time to have a property on the books especially when times were good.

My gut feeling would be to hold tough for awhile .... you've made an offer ... no harm done.

Doesn't matter how you look at it .... it was an offer from a 'potential buyer' ..... a breed that's getting rarer by the day!
 
PaulyB your comment "have no intention of ending up in the negative equity trap because I offer "current market value".... How can you say that this wont happen even if your very low offer was accepted? It does not sound like you are ready to buy a home as for most of us negative equity is part of the risk of home ownership. It seems fair enough not to want to overpay but to hope you can close on a deal that is devoid of all risk is not possible particularly in the current climate.

Why on earth not continue to rent?
 
lsc1779 said:
I think your offer was a fair in your eyes but a bit of a joke really.

It's obvious that when all is paid out of your 200,000 offer by the seller that they may well end up with less than they started out with.

What annoys me with this is that they have been selling it for 2.5 years, that means even at 350K people still believed it to be overpriced when times were good.

I think an offer of 230 - 250K is all the seller should be expecting and fair current market value for the property and the fact its not a re-sale your looking for and a family home, by the time you may come to re-sell in the far future, it will have stabilised and more than likely gone up in value anyway.

I think more of your type offer is needed to be fair, glad to see you have the balls to do it, laughable as it is!
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My offer was in my eyes not laughable... Why should I offer 230 - 250 if the house (I believe) will be worth 200 or less in 18 - 24 mths time? Also... As regards current occupents... Is it my problem if they get less then they paid? I had to take the same money as I paid for my house a year prior thereby losing out on €38,000 in stamp duty paid... That's life... I saw the sh*t on the way towards the fan and decided to bail and am I glad I did but that's a different topic really...

That's not happening in this case as they are residents of circa 40 years...
 
sanne said:
PaulyB your comment "have no intention of ending up in the negative equity trap because I offer "current market value".... How can you say that this wont happen even if your very low offer was accepted? It does not sound like you are ready to buy a home as for most of us negative equity is part of the risk of home ownership. It seems fair enough not to want to overpay but to hope you can close on a deal that is devoid of all risk is not possible particularly in the current climate.

Why on earth not continue to rent?
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You may have a point....! I do want to lay down some roots as my children are about 2 years away from starting school etc. and I don't want to enroll them somewhere and then have to move again etc. etc.....

I'm not looking for risk free investment. I am completely aware that this doesn't exist but I am willing to take a risk at the level I can comfortably repay etc. This will be my 3rd purchase so I have done it before. I mentioned in a post above that my second purchase was just idiotic... I bought right at the ceiling of the market and was lucky to get out at all.... Just don't want to do it again.... My second property was purchased for 438,000......!!!! SOUNDS MENTAL TO ME NOW!!!
 
I'd say its a waste of time looking at a house thats been on the market for 2.5 years and as only dropped 25K. from the sounds of it the house is old enough and so there might be no mortgage left on it. The seller does not need to sell and wants the 2006 price.
I'd move on to at houses that are a bit more realistic. Get the property-bee tool for firefox, look for house in the area that have had a few price drops, these are more likely to be open to offers.

Take your time, rent for the moment, the right house with the righter seller will come along. You never know, even your offer of 200k may be too much in 6/12 months.
 
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