House being sold directly by owners - but way overpriced

My wife and I are in the market for a house and we've seen one we fancy.
The downside is that it's not being sold via an estate agent. It's being sold directly by the owner.

We like the house. It has five bedrooms and the area is 1,500 sq ft but the price is €235k, which is unchanged since it was originally advertised 2 years ago.

There is a house one mile up the road, five bedrooms and the area is 3,800 sq ft for €240k.
There are other houses in the locality that for that size are less than €200k, and their ads on Daft show their prices decreasing over the years since first advertised.

It seems that the estate agents are clued into the market (being professional house sellers) whereas the owner doesn't seem clued in at all.

Obviously, we could just buy the house up the road that's twice the size, but it's not our preferred option. We'd prefer our first choice but get the impression that the owner just isn't up to speed on the reality of the situation.

The house up the road, asking price is €240k, we reckon it's worth €200k, and will put in a bid of €150k.
The house we're interested in, asking price is €235k, we reckon it's worth €150k, and will put in a bid of €110k. But this seems so small an offer; not because is it, but because the asking price is unrealistic relative to other properties in the area.

What to do? Any opinions? I'm sure that if there was an estate agent selling it the asking price would be about €175k.

I think you and the seller are too far apart and won't come to an agreed price.

Offering €110k will only create a bad first impression.

Buy the one up the road.

Don't make an offer which will completely insult them.

Be honest. Tell them that you really like the house and prefer it to others, but the others are much cheaper. Wish them luck getting €235k and invite them to get back in touch if they reduce the price, significantly.

If you offer €150k on a house you reckon is worth €200k, they will probably think you are a messer. My understanding is that auctioneers are now quoting low prices and expect a bidding war above the advertised price.

It seems that the estate agents are clued into the market (being professional house sellers) whereas the owner doesn't seem clued in at all.

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It is also possible that they are clued in, and you are not.

Brendan

Brendan Burgess said:

Be honest. Tell them that you really like the house and prefer it to others, but the others are much cheaper.

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Yeah, I was thinking this. If I show them a few nearby properties from Daft, of same size and bedrooms, and the disparity in the asking price for this one property ("everybody's out of line except my Johnny"), they may not be insulted.
My other fear is that because they're selling it themselves, to move "moving to a restored property nearby", that they have an emotional tie. A bit like people that inherit shares and are unwilling to sell them.

Brendan Burgess said:

My understanding is that auctioneers are now quoting low prices and expect a bidding war above the advertised price.

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This is certainly true in some areas, I live in south Dublin, two houses on my road caused traffic jams recently at viewing times.

Both sold for 20% above the asking price.

Belton said:

The house up the road, asking price is €240k, we reckon it's worth €200k, and will put in a bid of €150k.
The house we're interested in, asking price is €235k, we reckon it's worth €150k, and will put in a bid of €110k. But this seems so small an offer; not because is it, but because the asking price is unrealistic relative to other properties in the area.

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I realise you want to put in a bid lower than you're prepared to pay, but I think going in that much lower than you think it's worth, let alone the asking price, you'll just be dismissed as a chancer.

For starters, stop speculating about what is going on in their heads. Doing that is no use to you at all. Stick with your own situation and don't try to second guess stuff.
Secondly, if it looks like a rat and smells like a rat it is a rat.
For all you know the house may not actually be properly for sale at all. They may only be 'thinking about it'. They could be doing it to make it look like they are selling their assets to make people they owe money too stop harrassing them.
Look at the property price database (nprsa).
Look at how much you can afford. What is your walkaway price. Then offer something below that to allow for wiggle room. They have to feel they got as much out of you as they can, so allow for 'we can't afford much more than that' with your first offer. Horrify them with your first offer so the next offer seems much much better. Be pleasantly firm rather than aggressively rigid.eg. the market suggests 100k but we like the house so we are prepared to start at 110k (or whatever).

Have you viewed the house yet? If not it could have a really bad kitchen or layout that might cost you thousands to put the way you want.

Go and view the house.
Ask the sellers why they are moving. Ask them when they are moving.
Ask them how much interest they have had.
you could ask them why they chose to sell it themselves, that'd be a revealing conversation.
Ask which solicitor will they be using for the sale. That'll tell you if they are serious. And will show them you are serious.
Look around the house and see does it look like a house someone is really moving out of. They may or may not be telling the truth. You won't find that out until the offer is accepted. Or even till your solicitor requests the contracts.
Make a Business case for your first offer, have some figures prepared so its not you that is telling them as such. Say you can only offer what the market suggests and what you can afford.
You could get your solicitor to make the offers on your behalf either especially if the owners are acting the maggot and being really cagey or difficult.

sadie said:

For starters, stop speculating about what is going on in their heads. ...

They could be doing it to make it look like they are selling their assets to make people they owe money too stop harrassing them.
...

Horrify them with your first offer so the next offer seems much much better.
...
are moving. Ask them when they are moving.
...

Ask which solicitor will they be using for the sale. That'll tell you if they are serious. And will show them you are serious.
Look around the house and see does it look like a house someone is really moving out of. They may or may not be telling the truth. .

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Hi Sadie

You seem to be doing an awful lot of speculating yourself.

The OP has to speculate about why they are looking for so much.

It's quite possible that they asked a few auctioneers who valued the house much lower than the sellers' own valuation.

I suppose it's possible that they are not really selling the house, but I think that is unlikely. The OP has to assume that the house is genuinely for sale.

Agree fully with building up a good case for the amount to offer.

The sellers may be messers, so maybe it's best to simply tell them it's overpriced and move on.

It's their house. They can ask whatever they want for it. They mightn't get it but they can ask.

There's a lot of psychology tied up in house buying/ selling and sometimes we lose sight of that human dimension.

You offer what you think the house is worth. They will reject or accept.

If they reject you walk away or increase by five thousand. It really is that simple.
It is their house and your money.

I think it's only that simple if there the gap between the buyer and seller is not too large.

In this case,it appears that the seller appears to be way out of touch. If they want to sell the house, they will have to reduce the price. The buyer should stay on good terms with them so that they come back to him, when they become more realistic.

The house we're interested in, asking price is €235k, we reckon it's worth €150k, and will put in a bid of €110k.

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You could ask a friend to pretend to be interested in the house and make an offer of €110k. Then you could come in with an offer of €130k and you will be seen as less offensive.

Brendan

I'm aware of a house that sold recently after sitting on the market for two years. Local wisdom dictated that the value of the house was 280,000 and the vendors had it for sale at 350,000. It sold two weeks ago at 339,000.The house is in a desirable area where houses are selling fast.

I think the moral of the story is that sometimes a desirable house in a desirable area, where supply is very limited will fetch an extraordinary price if the vendors are willing to sit it out and wait for the "right buyer"

Its amazing, but apparently some buyers will pay above the odds to get a nice house and money alone or value are not always the primary considerations. You only need to find one buyer.

You are right Brendan, I often catch myself not taking my own advice re speculating what's going on in other people's heads.
I was on the receiving end myself of two house-buying attempts where the owners backed out of the deals when we were well into the process. Also I have been in a few bidding wars.
The price issue could be any number of reasons. Speculating about what they are doesn't better prepare us for the pain of a disappointing outcome. Only thing we can do is accept that house-buying is an emotional roller-coaster of a process but it is worth that pain in the end!
And if this process doesn't work out, the experience of it will be an asset going into the next negotiation.

DH was talking to a neighbour who sold their house recently. It sold very quickly for above the asking price. I know this is Lucan, and that prices and markets are very local, but prices here have come up sharply.

It's a bit insulting to assume that the sellers aren't clued in to the situation. They can go on daft just as easily as you do. I know people who have put their property up for sale at a price that they will sell at but are in no rush to sell. The price is more expensive than other properties in the area but they don't care. People have viewed and made offers which have been rejected. The sellers aren't messing anyone about. They are not forcing anyone to view the house or make an offer. They have been very open about the price they want and as far as they concerned, that's that.

If you think it is overpriced, move on. It's that simple.

It's their house. They can ask whatever they want for it. They mightn't get it but they can

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+1
Its their house and they can ask what they want - Price depends on what its worth to the buyer.
Maybe the sale price is set and they don't need to sell.

it's a bit insulting to assume that the sellers aren't clued in to the situation. ...if you think it is overpriced, move on. It's that simple.

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Good Comment + good advice

Offer what you feel the property is worth €150k & let the sellers stew over it. If its been up for sale for 2 years at same price, they aren't in a rush to sell.
This mini bubble is really only affecting Dublin (SCD especially) if the house is outside Dublin, ignore all the VI spin of increasing prices & don;t panic buy.
My 2c as i'm currently buying in Dublin, luckily with a house I view as good value (€212 per sq ft).

I'll gladly accept that I'm speculating. Aren't many of us?

I suppose part of my problem is that if it was an estate agent I could easily come straight out and say "All other houses in this locatation, with five bedrooms, of an area of about 1,500 square feet, on a half acre, are asking €125k to €160k. Why is this so much more?" But to say this to the sellers may be insulting. Despite the fact that if they were employing the prefessional services of an estate agent, the latter would probably (maybe) advised them an asking price of €160k. (Yes, I'm speculating).
I want to convey this query but in a subtle manner.

Brendan Burgess said:

In this case,it appears that the seller appears to be way out of touch. If they want to sell the house, they will have to reduce the price. The buyer should stay on good terms with them so that they come back to him, when they become more realistic.

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Yes, this is it. Good terms is vital. Even if we don't buy it, we may but the one up the road. We'll be neighbours! And, of course, they're moving to a restored house somewhere nearby.

Brendan Burgess said:

You could ask a friend to pretend to be interested in the house and make an offer of €110k. Then you could come in with an offer of €130k and you will be seen as less offensive.

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I should have mentioned that this is in rural Munster. House prices are still dropping. I'd say if it was a case of "...waiting an hour for the 46A, then two come at once..." they might see thru' it.

Dr.Debt said:

I'm aware of a house that sold recently after sitting on the market for two years.

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Was it sold directly by the owners or via an agent? The crux of my post is not so much the price, but how to bring up the topic of the asking price being 50% more than similar properties.

Sunny said:

I know people who have put their property up for sale at a price that they will sell at but are in no rush to sell.

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monagt said:

Its their house and they can ask what they want - Price depends on what its worth to the buyer.
Maybe the sale price is set and they don't need to sell.

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True. They've been in it for 20 years. Actually, 22.5 years if you include the time it's been on the market. Back them most mortgages were 20 years maximum. Unless they re-mortgaged during the boom the don't have repayments and don't need to sell.

Thanks for all the comments. It's helped me get inside the sellers head. Not that I want to get inside, just the try to understand the 50% premium.

There is a lot of speculation in your posts which is based on assumptions. You could walk away from this property, which potentially you could have bought for the price you had in mind, purely because you have persuaded yourself that the sellers will not come back significantly from their asking price. making an offer well below the asking price is not an insult. The seller will quickly let you know if you are in a ballpark for negotiation. Why would any seller be offended at a genuine offer, even if it was well below their asking price?

44brendan said:

There is a lot of speculation in your posts which is based on assumptions. You could walk away from this property, which potentially you could have bought for the price you had in mind, purely because you have persuaded yourself that the sellers will not come back significantly from their asking price. making an offer well below the asking price is not an insult. The seller will quickly let you know if you are in a ballpark for negotiation. Why would any seller be offended at a genuine offer, even if it was well below their asking price?

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If I had a house on the market for €235k and someone came for a viewing and then offered €110k, I would be peeved off. If everyone did that, people selling their house would be inundated with people wanting to view. My budget is €200k but sure I will go and check out the €500k house and slap in a €200k bid for the craic. It's time wasting.

Belton said:

I suppose part of my problem is that if it was an estate agent I could easily come straight out and say

.

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You are making problems where there are none. The fact there is no professional estate agent is irrelevant.

You want to buy the house, they want to sell it, it's all very simple. If your purchase price is not their minimum selling price than you don't get the property. Whether their asking price is over the price you are willing to pay or is overvalued is not relevant. They will only sell at a price they want to.