Cheeky House Offer: What Is It?
Making a cheeky offer on a property you believe is worth less than the listed value is a gamble. Your offer may annoy the seller, potentially missing out on the opportunity to make a more reasonable offer. When the negotiations go in your favor, however, you'll end up with your dream property for considerably less than what the seller wanted.
So what is a cheeky offer on a house? This article explains what a cheeky offer is, how to maintain a strong relationship with the seller, and outlines the circumstances under which a cheeky offer may be accepted.
What percentage under the asking price is a cheeky offer?
A cheeky offer is typically between 10% and 25% under the asking price of the property. An example is that a seller has listed their property on the market for £250,000, but you've only offered £200,000. This is a 20% decrease between your offer and the asking price. Most sellers expect to receive the figure they have requested. So by putting in an offer for £50,000 less, you're bound to ruffle some feathers.
Why is 10% to 25% under the asking price a cheeky offer?
Making an offer considerably below the asking price can be deemed disrespectful to the seller. You must anticipate the seller walking away completely at this stage because they feel your cheeky offer is undercutting their valuation.
The seller's estate agents will provide them with a valuation of their property based on the values of nearby properties. This valuation will be for properties within the area, as extending the range can tack on thousands.
Work out how much you can offer in a 'cheeky offer'
Before making an offer of any kind, buyers need to understand not only what they are willing to pay, but also what they can afford to pay.
Buyers ideally should get a mortgage in principle before any offer is made. Sellers are more likely to take you seriously if you have a mortgage in principle. This establishes a rough guideline for how much the bank will be willing to lend. This figure, combined with your savings, will be your total budget.
Have information prepared when making a cheeky offer
As the buyer, you have to put yourself in the strongest position possible when negotiating, even if it's a cheeky offer. You need to come prepared with information that will make it difficult for the seller to reject your offer. For example, if the property has been on the market for some time and the price has undergone multiple reductions, you can present this as justification for your offer.
The seller won't simply accept your cheeky offer without justification. Preparation is crucial when making a lower offer.
As mentioned above, doing research on the area surrounding the property will come to your benefit. We offer a helpful house offer calculator that allows you to compare similar properties in the area.
When might a cheeky offer be accepted?
The seller's circumstances contribute to the likelihood of a cheeky offer being accepted. Typically, the seller needs the money, meaning they want to sell their property as quickly as possible. Let's explore some circumstances in which a seller might accept a cheeky offer:
Financial difficulties
A seller having financial difficulties will increase the chances of a cheeky offer being accepted. The seller simply needs the money, potentially because they have lost their job, or even worse, their property is about to be repossessed and they want to get as much as possible before losing the home.
Seller has passed away
In the unfortunate event that the seller has passed away, the beneficiaries of the property may want to get a fast completion to get their money.
Property defects
A cheeky offer may be accepted when property defects have been discovered during the property survey. In this instance, you'll return to the seller with a cheeky offer, using the property defects as evidence to support the lower offer. As long as no contracts have been signed, you're free to renegotiate the price, even if the original offer was accepted.
The property has been on the market for a while
Buyers can take advantage of a seller who is desperate to sell their property. For example, a seller has had their property listed on the market for a while, consistently decreasing the price in the hope that their home will sell. If you are the only person making an offer, you have the negotiating strength in this situation.
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Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
