Are you a first-time homebuyer who is afraid of taking a shot at a cheeky offer on a house?
Quit worrying! Here’s the truth you need to hear.
If you’re serious about buying a house, you’re certainly keen on getting the best price possible, even if it means making a cheeky offer on a house. The goal is not to offend the seller in any way, but to ensure you get the house at the best deal possible.
But have you ever asked yourself, ‘what is a cheeky offer on a house?’ and if making an offer that is below the asking price is ethical?
You need to draw a line between that is ridiculous and what is acceptable. So, here it is a cheeky offer refers to any offer you make that is over 10% below the seller’s asking price. As such, it’s subjective, as there’s no fixed percentage. The actual percentage of a cheeky offer for a sale will depend on who enjoys an upper hand from the outcome of the negotiations as well as whether it’s a sellers’ or buyers’ market. However, when the offer is more than 25% of the asking price, it is no longer a cheeky offer; it becomes a lowball offer.
You don’t have to pay a hefty price tag to buy your dream house. You’ll be surprised at just how many property sales end at prices lower than the asking price.
How much can you offer below the seller’s asking price and what makes it a cheeky offer?
Making an offer below the asking price requires you to be tactical. Otherwise, things could go south.
Your offer helps the seller to decide if they will negotiate with you. By putting in an offer that is too low, the seller can conclude you’re rude and decline to negotiate completely!
You don’t want the vendor to put off negotiations…
So, you need to be realistic with your offer by making sure you mention nothing more than 25% below the asking price. In simple terms, the offer you make should be 90% or less of the asking price.
Sellers can easily settle for offers of between 5 and 10% below the market value so you could test the waters with an offer that is 15% below the asking price. This gives plenty of room for negotiation and can even get the seller to accept your cheeky offer.
Ultimately, acceptable offer you can make below the asking price depends on two things:
- How badly you want the house
- How much is the seller is ready to sell the property – Is the seller motivated to sell?
Keep in mind that the best way to tell just how much the seller wants to sell the property or if their desire to sell exceeds your desire to buy is by putting in an offer.
And that’s where we recommend making a cheeky offer!
Is it possible to offer 15% below the asking price?
Yes, you can!
You can offer any percentage you choose below the asking price. However, you need to be careful so that you don’t give an offer that borders more on being disrespectful than cheeky. Otherwise, the seller will disregard you.
A 15% offer below the asking price will in most cases be acceptable, keeping in mind that estate agents will often overvalue property by between 5% and 10%. This means that by making an offer that is 15% lower, you’re closer to the actual value of the house.
Keep in mind the seller may make a counter offer paving way for negotiations.
The trick to putting in a cheeky offer that is 15% below the asking price is to look at the number of days the property has stayed on the market. Properties that have been on the market for less than 3 months are seen as being fresh, so such a cheeky offer could end up being offensive.
Looking at sold prices of similar properties in the area can also give you an idea if making an offer of 15% below the asking price is a good idea.
How to make an offer for a house that has been on the market for long
For a house that has been listed on the market for a long time, the issue would mostly be overpricing, so the seller may accept a low offer from you.
If the vendor hasn’t received any other offer apart from yours, they may begin to understand that the value of their property may be exaggerated.
Is it possible to make an offer 20% below asking price?
Yes!
You can put in a 20% below the asking price offer if that is what you perceive the house to be worth. While such offers are likely to upset a seller, it all depends on their personality and keenness to sell. Sellers whose houses have been on the market for some time may accept the low offer.
The ball is in your court; all you must do is ask!
Is it possible to offer 20k less on the value of the house?
Yes!
While you can offer 20k less for a house, the seller has the discretion to accept or decline. In most cases, they’ll first look to see what percentage the 20k represents compared to the asking price.
For instance, £20,000 will be equivalent to 20% reduction for a house with an asking price of £100,000. Conversely, for a £500,000 house, there will be a mere 4% below the market price.
How low can you go for a house that is more than 6 months on the market?
For a house that has stayed on the market longer than 6 months, you can make a 15% to 20% offer below the asking price.
You can even go lower!
This is a good place to start, so then you can increase your bid as you negotiate.
What factors affect how low you can go with the cheeky offer?
Before you make a cheeky offer, you must understand the conditions that determine just how low you can go. Here are some of the factors to help you determine the % of cheeky offer to make:
- The vendor. Knowing who the vendor is helps to put things into perspective a great deal. You need to know if you’re dealing with an individual or property investor dealing in quick house sale. It is unlikely that an individual vendor will be willing to go as low as an investor. An investor may have properties in their portfolio, but they want to dispose of, hence are open to take a cheeky offer.
- How bad does the vendor want to sell? Are you dealing with a motivated seller? It is easier for a motivated seller to agree to a greater discount. A desperate vendor will be more willing to accept a cheeky offer.
- Property market. The general outlook of the property market will influence the seller’s decision to accept or decline a cheeky offer. You see, when the demand for property is high, chances are the vendor will probably decline your offer. After all, they could just receive a better offer from another buyer. Conversely, when the demand is low, the vendor is likely to accept your cheeky offer. It even gets better when dealing with a motivated seller, as you can go for a lowball offer. Understanding these dynamics will help you make the right move with your cheeky offer.
- Property location. When a property is within a prime location, you must calculate your move with the cheeky offer because they’re less likely to consider anything below the asking price.
- Emotional attachment to the property. When you have a high emotional attachment to the property, there’s little chance that you’ll think about making a cheeky offer. When you’re dealing with a non-emotional purchase, it’s easier to have cheeky offers.
- The housing condition. If the house is in a worse condition that requires so much work before you can move in, then the seller is likely to accept your cheeky offer.
- Your level of interest and preparedness. When you have so much interest in a property such that you’re not ready to see your offer being turned down, you’ll want to put in an offer that will be closer to the asking price. This way, you increase your chances of getting a discount, so you don’t walk away from the deal.
- The duration of the property on the market. When a property has been on the market long enough (by this I mean beyond 6 months), the vendor becomes desperate to sell. Because of this, they will be more willing to accept a cheeky offer, if only to attain a sale.
- How you relate with the vendor. If you’re negotiating directly with the vendor, then you’ll be keen about the kind of offer you make. Think about it this way, you don’t want to ruin an existing relationship with the seller by simply putting in an offer that is too low. Do you?
- Previous drop in price. You can ask your estate agent or check on Rightmove if there have been any drops in the asking price. If the vendor has already dropped their asking price, then they probably will have a different feeling about accepting a lower offer.
- Your bargaining advantage. Do you have a better bargaining advantage? If you’re a cash buyer and in a chain or proceedable, you are at an advantage than if you’re in a chain. As a cash buyer, you’re more likely to get a cheeky offer than if you’re dependent on an impending sale.
- Readiness to accept rejection. If you’re not ready to handle a rejection of your cheeky offer, then you’ll be unwilling to make an offer in the first place. It all starts with believing in yourself.
- The current listing price. If by looking at the price of the property, you’ll realise that is it already too low then you can be sure you’ll not get away with a lowball offer or even cheeky offer. However, this can turn around with a little more effort in research so you’re able to tell when you see a bargain.
Will an emotional purchase make a cheeky offer harder?
When you’re buying a house and the process becomes emotional, it’s difficult to make a cheeky offer. However, it is the property owner and the estate agent they’re working with that will influence negotiations.
Although the estate agent shouldn’t divulge inside information on how low the property owner can go to sell the house, most of them do.
While a cheeky offer should not be more than 10% of the property’s value, you’re free to make an offer you consider to be appropriate. If anything, the asking price of a house is not the same as the actual valuation.
The asking price only helps to start the talks. So, make sure you have this in mind when you’re thinking of the percentage of a cheeky offer to make on a property. The agreement you’ll reach with the seller depends on several factors.
The buck stops with both you and the seller agreeing. You might just a cheeky offer of 20% or 30% or more. It’s all about how the seller interprets the deal.
The role of the estate agent in negotiating your cheeky offer
The estate agent plays a critical role in negotiating your cheeky offer. However, this doesn’t always guarantee you a positive outcome because it all boils down to how the offer is made. When the estate agent finds your offer to be disrespectful, then they’ll turn it down. This means that they’ll not be considering it as a cheeky.
When an estate agent considers your offer to be disrespectful, they’ll not give room for negotiations even though they have the legal obligation of putting all offers forward regardless of if they are cheeky or lowball.
The estate agent must steer the negotiations professionally while being both careful and sympathetic. They must also take the responsibility for explaining each offer to the seller and guide them on how to go about lowball offers.
So, nothing should discourage you from making a cheeky offer of 25% or higher.
If you don’t have any attachment to the property you want to purchase or you’re simply making an investment so it’s not a must that you buy it, then go with a cheeky offer. If you’re unafraid of a rejection and would gladly walk away from a deal, then how low you can go with the cheeky or lowball offer is insignificant.
Making a cheeky offer directly to a vendor
If you’re making a cheeky offer direct to a vendor, the negotiation process can sometimes be tough. You see, the estate agent acts as a buffer. So, in their absence, you must communicate with the seller face to face, which can be harder.
This brings up the issue of how prepared you are to accept a rejection. Only go for it if you’re sure you can handle it.
When does a cheeky offer become disrespectful or rude?
This is an ironical question.
When you look up the meaning of the word ‘cheeky’ you’ll realize it points to showing no respect or slightly rude.
Does this help you to understand why some sellers will be unhappy with cheeky offers? Ultimately, it’s all about how you interpret it. Some sellers will not want to deal with you again based on the cheeky offer they consider disrespectful.
So, you must tread with caution. You don’t want to end up giving up the opportunity to own your dream home after months of searching because of something you can approach tactfully.
To be safe, always aim for a cheeky offer that is below 10% of the asking price to minimize the risk of rejection. Especially, if you’ll be disappointed when you fail to secure the house.
Remember, as you make the cheeky offer you want the vendor to take you seriously so that they see your offer as being reasonable.
Is offering less on a house rude?
Whether or not it is rude to offer less than the asking price of a house is an issue of perception. While some sellers will expect such low offers, others find it to be rude. However, when a property has been on the market for so long, then it is unlikely that the offer is rude.
You just need to know when it is appropriate to make a cheeky offer before making a move.
How to make your offer on a house?
You need to do a little research about the type of house and the location before you can make an offer. Look through important data to have an insider view of the area. This will help you avoid making an offer that is far-fetched, resulting in a collapse of negotiations if at all you’ll get a chance.
Bearing in mind that your offer will go through an estate agent, then you will do well to find out how much the seller will take for the house. A good estate agent will not divulge this information because then it jeopardises the seller’s chance of maximising a sale.
Interesting, most of them will answer the is question. If they do, then it means you just might have an upper hand in this entire process.
Remember, sales agents are mostly motivated by the earnings they’ll make in sales commission.
How would this play out in a real life? Take this example:
If they listed the house for £255,000 and the estate agent responds with £245,000, then you’ll have already saved £10,000. You’ll do well to find out from the agent if there are other offers. They could share this information with you even though they don’t have to.
If they’re willing to share with you information about offers that have already been rejected, then you’ll know where to place your offer. However, this also depends on the duration of time that has lapsed from the time the past offers.
Most importantly, find out from the estate agent how willing the seller is to make a deal. Here, you’re better off going lower than the amount the estate agent suggested. Here’s why:
- Although the estate agent may have gone against the code of secrecy to give you information about the other offers, they could just withhold the actual lowest offer that the seller may accept.
- Looking at the other side of things, if the estate agent is truthful about how low the vendor will go and if they’re willing to accept £245,000, they may just be willing to take less.
We suggest you begin negotiations with an offer that is less than what you can pay. How low you will go is entirely your decision. It’s all about how comfortable you are putting in a lowball offer.
This process is a sliding scale. When you highly desire or want a house, you are less likely to be willing to make a cheeky offer. On the contrary, you’ll be more willing to get cheekier with your offer when you least desire or want a house.
Well, always treat the seller with respect when it comes to negotiations. Therefore, focus on creating a good rapport with the sellers whenever you get a chance to meet with them. Remember, when a seller likes you, it increases their chances of accepting your offer.
How do you convince the seller to accept a cheeky offer?
What is a lowball offer?
A lowball offer refers to any offer that is more than 15% lower than the asking price.
It is important to make sure you do the necessary research, know how much the property is worth and take the asking price into account before making such an offer. Remember, with lowball offers chances are you’ll offend the seller so, be prepared.
What if your cheeky offer is turned down?
By now, you should have thought about what you can do should your cheeky offer be rejected.
Yes, this is a reality.
And you need to think about your next move in advance. What you do when a seller doesn’t accept your offer will depend on just how attached you are to the deal. This is in addition to how much you desire the house.
If you want the house so badly, you will readily accept a high offer. This means escalating your offer until you attain the vendor’s lowest price. On the contrary, if there’s no attachment to the property, you can pull away from the talks. You can also leave the offer pending, so if the seller hasn’t sold the house several weeks later, they can come back and take up the offer.
At what point should you resort to offering the asking price?
You can offer to pay the asking price on a house when:
- You really want the property and are not willing to lose it.
- You’re competing for the same house with another buyer, so you’re willing to offer the asking price than simply stop at a cheeky offer.
Can you offer more than the asking price?
Ridiculous!
This must have been your first reaction. I’m sure you’re asking yourself why you should think about paying a high value than the asking price. Well, this is common when there’s a high demand and a low supply in the property market.
Sometimes the property market is so competitive so that you find buyer jostling for the properties that are available. The spill over effect of this is that you’ll have house prices going up so that you pay more than the asking price.
Even then, the guiding principle is that you should only offer to pay more than a property’s asking price if you really want it.
Conclusion
When it comes to making cheeky offers, always remember that the first offer you make will serve as a starting point for negotiations. It is from a cheeky offer that the seller will reach a decision to negotiate with you or not.
You must be tactical about the offer you put in after taking several factors into consideration. Certainly, you don’t want the seller to turn you down because your offer gives an impression of being disrespectful/rude. Don’t hesitate to ask estate agents what the seller’s expectations are, even if it is unethical to disclose. You might just get some important pointers to help you make a reasonable offer.
Ultimately, aim for an offer that is not more than 25% below the value of the property on the market. Offering anything less will be seen as a lowball.
Generally, most sellers will accept offers of between 5% and 10% below the market value, so if you want to test the waters you can propose an offer of 15% below the market value. This will pave way for negotiations before settling for your desired cheeky offer.
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