Making an offer

T

TheBigD

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Hey all,

A few articles I've read giving advice to buyers in the market today have stated that the buyer should over 30% below the asking price.

Now for an apartment listed at 390K, this means offering 273K. Surely no one will be prepared to accept that price.

So what are peoples opinions on the 30%? What would be a more realistic percentage discount to offer?
 
I think that is just air talk and not realistic in most sales, I think a seller now knows that they would be lucky to get their asking price but I imagine they would maybe accept 5-8% less than asking price. I know of people who have sold in this climate and all have either got asking price or quite close to it. If I was going bidding on a house where the seller where looking for 390K and that I knew 14 mths ago went for 390K,then I would expect to pay around 370K.
 
DNG have done research to say that 2nd hand residential property has dropped between 11-12% from last year in Dublin. So 390 would be close to 345k. As prices are predicted to drop another 5% this year, I would be tempted to build some of this into the offer as well. If you got 15% off from the peak you will be doing well.
 
Well overall for apartments the market has dropped approx 25%, so your first offer should be in that region. Remember its easier to go up than come down with your price. EAs won't admit the market has dropped, but what do you expect from persons working on commissions, based on the sales price.
 
Yeah I imagine in some areas you can offer an amount significantly under the asking. In other areas that hold their value better I would expect you wouldn't see the same level of reductions. Guess I'll just start low and see where we meet. ;)
 
TheBigD said:
Yeah I imagine in some areas you can offer an amount significantly under the asking. In other areas that hold their value better I would expect you wouldn't see the same level of reductions. Guess I'll just start low and see where we meet. ;)
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You may as well start as low as possible. There is nothing to lose by going too low but plenty to lose by going to high
 
Hi,

It depends on a lot of things, location, apartment or house - people generally don't give the asking price but negotiating is a delicate balance you don't want to insult the vendors either - if the property has already been reduced in price you have to take this into account - if it hasn't then give a low offer. Good luck.
 
The only way that would insult a vendor in the present circumstance is by not making an offer at all -- especially for an apartment.
 
Hi,

Can't say I know too much about apartments apart from there seems to be any over supply of them as there is houses.
 
angela59 said:
It depends on a lot of things, location, apartment or house - people generally don't give the asking price but negotiating is a delicate balance you don't want to insult the vendors either - if the property has already been reduced in price you have to take this into account - if it hasn't then give a low offer. Good luck.
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And, er, why would possibily of insulting the vendor figure in your thinking?

The only reason not to go too low is that you (possibly) won't be seen as serious. So long as there's some logic to the offer, I wouldn't be the least bit shy of making a it low: it's your cash you're spending.
 
You should also factor in what the possibility that the price has already been adjusted. I know that some posters here say that beware EA's as they are vested interests, but don't forget alot of people also have a vested interest in talking things down as much as possible so don't pin your hopes on knocking 25/30% off the price. By all means start as low as you like, but beware of starting say 100k below and slowly working up the price as then it seems that you will keep going up and up.
 
TheBigD said:
Now for an apartment listed at 390K, this means offering 273K. Surely no one will be prepared to accept that price.
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Depending on when the apartment was purchased, this may be perfectly reasonable and even allow the seller to walk away with a tidy profit.

TheBigD said:
So what are peoples opinions on the 30%? What would be a more realistic percentage discount to offer?
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I think it might be possible to achieve this kind of discounting but you would have to work hard on targeting properties and testing the market with several offers until you find a willing seller.

Since it has become a buyers market, your best bet is probably to find 10-20 properties that fit the criteria you are looking for and make low ball offers on them all. It could work in your favour if you let each seller know that you have other offers pending in the area and whoever comes back to you first will get your business. If you are a buyer, who is not in a chain, with mortgage approval, mention all these things so the sellers knows they could have a fast hassle-free sale on their hands if they are willing to go with your offer.

Targeting sellers that are most likely to accept low offers is important if you are going to try this tactic. There are two obvious groups that fall into this category; investors trying to exit the market and people who have bought pre 2004 and now need to trade up. Homeowners who bought pre 2004 are likely to be found in schemes that were developed within the last 5 to 10 years. A little bit of detective work (on daft.ie for example) may help you spot investors trying to sell up. Typically ex-rentals will have pretty bland colour schemes, very few homely items (pictures/family photos) and fairly standard furniture. Some investors will be very eager to get rid of the assets that are not washing their faces to improve their cashflow so I would imagine the best discounts would be possible here. Also the fact that they should be looking at it as a business transaction rather than an emotional deal would work in your favour.

Best of luck and remember you are simply carrying out a business transaction so insulting the vendors does not come into it. All you need is one vendor to accept your offer and then you are laughing.
 
Hi,

I think prices of properties in Dublin and what you get for that money are outlandish.
 
What about a new apartment in South County Dublin asking price €315,000 do you think a developer would take an offer under the asking price or is only possible on 2nd hand places to offer under the asking price?
 
I would say you can negotiate with a developer more as they have bills to pay, householders usually are just planning on moving somewhere else so do not necessarily need to sell.

Usually developers owe quite a bit to banks (e.g. they got loan based on the strength of them selling the houses), or they need to fund a second phase etc. Depending on location I would say throw a price about 20-15% (probably more in Dublin) less than advertised and wait, be patient. They might not accept the offer immediately but they will move on their price and maybe throw in some things free e.g. kitchens, fitted wardrobes.

Well this is what I hope as it is what I am doing, have put in the offer and going to play the waiting game.
 
angela59 said:
Hi,

It depends on a lot of things, location, apartment or house - people generally don't give the asking price but negotiating is a delicate balance you don't want to insult the vendors either - if the property has already been reduced in price you have to take this into account - if it hasn't then give a low offer. Good luck.
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You would not be insulting a vendor, if the market was riding high, they would have no problem ask for an extra 10k or 20k or what ever they felt they could squeeze out of you. The tables have turned and for the better I would say. The new homes now that are been built and a good bit better than say a few years ago, and it will be the same over the next couple of years. Also the BER's will help the build quality, also should this not be a factored in when bidding for a house or building?

Joejoe
 
firsttimebuy said:
What about a new apartment in South County Dublin asking price €315,000 do you think a developer would take an offer under the asking price or is only possible on 2nd hand places to offer under the asking price?
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What development is that?

Joejoe
 
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