TomBorehamUK Posted February 11, 2017 Share Posted February 11, 2017 So after a long time of saving, we're finally in the position of buying our first house, we've looked at plenty of properties in the last few weeks (Seen some right states, surprising how some people live! ) Anyway, we keep coming back to one place we really like which came up in our budget, lovely small open planned house with the whole of the upstairs on a balcony overlooking downstairs - We left feeling ready to put an offer in however after getting home & doing some research into the area the house seems to be rather overpriced! Most homes in the area are built exactly the same & are averaging around £40,000 less than this is advertised for. This house was actually bought only 2 years ago for £50,000 less than it's up for sale for now, that's around an extra 40% Mark up with little reason for the added value. Wondering how to approach this, do I take the market data accurately or could a house really be worth an extra 40% after 2 years! We have a couple of houses left to view and then we'll possibly put in an offer though I've a feeling the owner may feel insulted..... Quote Link to comment Share on other sites More sharing options...
Richf Posted February 11, 2017 Share Posted February 11, 2017 First off dont worry about offending anyone My advice would be to have a sensible discussion with their estate agent, mention you have looked at other properties and like this but want to understand why the vendor feels that the value is where they have set it 2 Quote Link to comment Share on other sites More sharing options...
G1en Posted February 11, 2017 Share Posted February 11, 2017 Suprisingley house prices have shot up over last 2 years. I found that out last month when i remortgaged my house after our 2 year deal finished. I filled in all the paperwork online happy with the new deal based on my loan to value worked out at original purchase price. When the paperwork came back i was over the moon to find our halifax now valued my house 35k more and as a result my loan to value percentage was less and it meant the interest rate offered was lower and saves me £80 month. So sorry to dribble on but what i sm saying is house prices do seem to have increased by a decent amount over the last two years BUT every area will be different 1- the house you are looking at may well have gone up 50k 2- the owners are cheeckily trying to make a quick buck 3- maybe a bit of both and they arent in a rush to sell do price it 20k higher than market to see what offers they get Like everything. Do some research and check other properties for sale nearby at current time. Find out how long it has been up for sale for. Even with people struggling for mortgages there is still a shortfall of housing and its my understanding that "nice" house priced "right" will still be snapped up straight away while others either not looked after or priced too high will sit there for months/years 2 years ago. We had to sell our last house quick as it was only 2 bed and family on the way. I priced it around 5k lower than what the estate agents said, it sold in 4 days 1 Quote Link to comment Share on other sites More sharing options...
sipar69 Posted February 11, 2017 Share Posted February 11, 2017 We're going through the selling and buying process. Three estate agents told Jane to market her flat in New Malden at £450k. Even I could tell that compared to other similar properties in the area the valuation was too high. Unsurprisingly, there was very little interest, even though we'd spent time and money making it look immaculate. Within a week of her taking the initiative to drop the price by £25k it was under offer. I'd offer what you think it's worth and explain your reasons. If the house really is overpriced it's not likely to sell and they will probably end up dropping the price anyway, so bide your time. We've spent months looking at properties in rural Kent and East Sussex. I've seen nice houses sit on the market for months and in some cases the prices have been reduced by as much as £75k. It can pay to be patient while sellers wise up to the fact their house has been overvalued. Case in point- we offered on a house that was on for offers over £625k. We ended up making a final offer of £590k. The seller wouldn't budge on price so we walked away. Four months on and the house is still sitting on the market at a significanly reduced price. Quote Link to comment Share on other sites More sharing options...
davey_83 Posted February 11, 2017 Share Posted February 11, 2017 The bank won't lend you more that the property is worth regardless of the asking 2 Quote Link to comment Share on other sites More sharing options...
gangzoom Posted February 11, 2017 Share Posted February 11, 2017 Offer what you think the property is worth. We are currently completing on a purchase, we offered asking price because in our view it was worth the asking price. Another property nearby is on for 20% more we went to see it and told the vendor he was aiming to high but he refused to move on price. That property has now been on sale for 12 months and he still hasn't dropped the price!! Quote Link to comment Share on other sites More sharing options...
sipar69 Posted February 11, 2017 Share Posted February 11, 2017 I've been surprised by how inflexible some sellers are, even when their property has been on the market for months on end. Quote Link to comment Share on other sites More sharing options...
veilside z Posted February 11, 2017 Share Posted February 11, 2017 Two things to consider I have found in the past is firstly, a vendor ignores an agents valuation, and goes higher than advised, and the second is if you have had two valuations done, the much higher one sets it high only to get it on his books over priced, only to then drop it down to its real worth after no takers. Quote Link to comment Share on other sites More sharing options...
-G- Posted February 11, 2017 Share Posted February 11, 2017 My kid brother bought a house 3 years ago in Harlow for £120k, it's worth £180k now. So yeah. It's genuine. Quote Link to comment Share on other sites More sharing options...
Ekona Posted February 11, 2017 Share Posted February 11, 2017 The fact you're coming back to the same place despite looking at others in the area suggests it is worth a premium. Either they're happy to wait and get the price they want, or they're not: Nothing you can do will change that. There's no harm at all in making an offer to them outright whilst you're there, you may well find that there's a common ground you're happy to meet in the middle at which you wouldn't get to if you make offers via agents. We did with our house, and got the deal we wanted. Also as it's a home not a BTL, you need to consider just how much you want to live there. BTLs or investments can be viewed with cold eyes, whereas homes sucker you in! I'd pay above market for somewhere I really wanted if I thought it was perfect and could afford it, I don't get the hang up about people having to drive a bargain everywhere. The bank won't lend you more that the property is worth regardless of the asking THIS THIS THIS. You absolutely must check this out first before getting too advanced, as otherwise you may end up stuffed. As for the increase, very possible. Looking at the market, we've 'made' approx £70K in two years on our place, which is about a 35% increase. We did get a bargain though, so the exception rather than the rule. 3 Quote Link to comment Share on other sites More sharing options...
The G Man Posted February 11, 2017 Share Posted February 11, 2017 To the OP, you can only offer what you've saved + what the mortgage company will loan you. But there are some chancers out there. Bare in mind record low interest rates, with some commentators forecasting significant rises in interest. Citing that its needed to cool the market down, especially in the south (baffles me how any normal working person can afford housing in the superheated housing market down there). As for 'it's now worth £ insert random number, more in a short period, that's all relative to where you live, everything else around about has also shot up by similar amounts. My sisters both have houses in Ealing, both were bought for a five figure sum, both are now property millionaires, but to move to similar properties, they'd need to hand over all that 'profit' for the new property. To move to a better area, they'd need to fork out more. Anyway, all my sympathies lie with young people/couples trying to get a foot on the ladder, it's bloody hard. Good luck to the OP Quote Link to comment Share on other sites More sharing options...
TT350 Posted February 11, 2017 Share Posted February 11, 2017 (edited) You're all living in the wrong area lol. I bought my house 7 years ago for £37,750 It was bare inside. I've done a lot of work to it and it's worth 65k now. Also, look what you can get for 450k round here...... http://www.rightmove.co.uk/property-for-sale/property-64163552.html http://www.rightmove.co.uk/property-for-sale/property-60676772.html http://www.rightmove.co.uk/property-for-sale/property-43672659.html http://www.rightmove.co.uk/property-for-sale/property-45678867.html And for the price of a one bedroom shoebox flat in London... http://www.rightmove.co.uk/property-for-sale/property-45815154.html Edited February 11, 2017 by TT350 Quote Link to comment Share on other sites More sharing options...
jimboy2 Posted February 11, 2017 Share Posted February 11, 2017 You're all living in the wrong area lol. I bought my house 7 years ago for £37,750 It was bare inside. I've done a lot of work to it and it's worth 65k now. Also, look what you can get for 450k round here...... http://www.rightmove.co.uk/property-for-sale/property-64163552.html http://www.rightmove.co.uk/property-for-sale/property-60676772.html http://www.rightmove.co.uk/property-for-sale/property-43672659.html http://www.rightmove.co.uk/property-for-sale/property-45678867.html And for the price of a one bedroom shoebox flat in London... http://www.rightmove.co.uk/property-for-sale/property-45815154.html At least we can get cheaper car insurance 2 Quote Link to comment Share on other sites More sharing options...
Alpinaman Posted February 11, 2017 Share Posted February 11, 2017 The house may have had money spent on it in the last 2 years so maybe worth a little more ? If you like the house then go in around 10% off asking and negotiate from there... We live in a small rural village in Derbyshire and Our house has increased around 55% in 10 years and we supposedly bought in the high price bubble of 2007....I think prices are only going one way,despite the "price crash" that people keep saying is gonna happen.. Borrowing rates are so low now there has never been a better time to get a mortgage.. BTW Rawtenstall is lovely,and house prices are obscenely low for what you get... Cheap insurance up here too.... £214 for my Z,Fully comp with NCP and the missus covered too..... Bargain.. Quote Link to comment Share on other sites More sharing options...
TomBorehamUK Posted February 11, 2017 Author Share Posted February 11, 2017 (edited) Plenty of replies, thanks for the input guys. As much as we're buying our first 'home' I am looking at it in investment terms also, what worries me is if we bought for that price I don't see much potential for a house of this size to grow in value much further & with interest rates set to finally rise at some point in our ownership, how this will affect saleability. I don't want to pay over the odds and end up in a negative equity situation (Of course with my limited knowledge of the housing market this might be irrational..) We spoke with the Estate agent this morning & while he conceded that it is practically top of the market price for this type of house he still feels it will sell quick & that house prices here have gone up 20% in the last 2 years. Being the skeptic I am, I was planning to speak to another EA about the prices but hadn't got round to it today. He phoned me back late afternoon to say he'd relayed my concerns about the price to the seller and they've said they found a place they want to buy so "may be open to offers if they can possibly get the same off their purchase" Mulling it over for the weekend then we'll probably be chucking an offer in at 15% less, worst they can say is no. It's only been up for a week so far, so only time will tell if it's overpriced or not. Edited February 11, 2017 by TomBorehamUK Quote Link to comment Share on other sites More sharing options...
Ekona Posted February 11, 2017 Share Posted February 11, 2017 If he's telling the truth, then I'd be looking elsewhere to buy. They sound exactly like the kind of people you don't want to be dealing with, as I'm already picturing them gazundering you right at the end. If it's only been up a week my guess is they'll reject an offer that low, I think I would too tbh. In terms of negative equity, it's only an issue if you're selling, otherwise it's irrelevant so don't worry too much. Just buy the right place, be happy there and if the market drops at least you're in a place you like. Quote Link to comment Share on other sites More sharing options...
gangzoom Posted February 12, 2017 Share Posted February 12, 2017 (edited) I would not be obsessed by trying to turn a 'profit' on a family home. Most price changes are makert wide, so if a £100k house goes up by 10% the owners may feel great... Till they have to move, and the £200k house they want to buy has also gone up by 10%, so actually their £10k net worse off due to price increases. This works the other way too, even though I 'lost' money on a house I bought in 2007 pre crash, we haggled down the price of a much more expensive house we bought by a much larger cash sum due to market conditions. Negative equity is beyond your control so don't stress about it, having an affordable mortgage is more important. Rates are so low now even the most expensive houses are relatively cheap to mortgage, but bare in mind back in 2007 I was paying 5-6% interest compared to 2.15% now, that a difference of over £200-300/months on a £150k mortgage. So budget for future rate rises and plan for what your going to do in 5-10 years time, don't be fixated on just the short term situation. We've gone for a 20 year mortgage fixed for 5 years this time, am going to aim to overpay by 10% a year in addition, this will mean when we exit our current deal in 5 years our LTV will enable us to get the cheapest deals and the total mortgage amount will be a good chunk less, so any rate rises will have minimal impact. Good luck with the move, our current move will be my third, and I can tell you it doesn't get any less stressful. I have no idea how people do the BTL thing, I find the sums of money involved with houses far more scary/stressful to deal with than a other stuff in life!! Oh and don't forget to take into account stamp duty and mortgage application costs, it all adds up!! Edited February 12, 2017 by gangzoom 3 Quote Link to comment Share on other sites More sharing options...
Ekona Posted February 12, 2017 Share Posted February 12, 2017 I'm never moving house ever again. Ever. How people do it over and over again I've no idea, packing boxes is soul destroying and the stress is just off the chart, especially now mortgage companies are bellends after the new rules were brought in. Quote Link to comment Share on other sites More sharing options...
davey_83 Posted February 12, 2017 Share Posted February 12, 2017 Once you both do settle on a house you want to place an offer, express to the vendor that you're first time buyers - this packs a massive punch when doing a deal. May sound obvious but you can only offer on one property at a time also. Quote Link to comment Share on other sites More sharing options...
Ebized Posted February 12, 2017 Share Posted February 12, 2017 Never forget, most estate agents sell on the basis of getting a % on the selling price, so it is in their vested interest to get as much as they can out of the sale and if someone out there is prepared to pay over the odds then both the EA and the seller are happy. But, I M Experience, the credibility of the buyer should be carefully considered - often chancers will offer the selling price or close to, and then press for a reduction just before the deposit, often screwing up what seemed a sound 'chain'. Cash buyers/those not in a chain are notorious for this ruse knowing that the seller has probably got their ideal new home sorted and desperate not to lose it and end up not making the profit they thought they would and letting it go for a lot less than the EA said. Remember, that as a buyer you have the right to put in an offer in even though there is an offer subject to contract. The EA will be quietly hoping the seller will accept an improved offer (providing it is sound) even though they cannot (should not) convey their opinion about its worthiness. It is for the seller to decide if they feel the improved offer is better for them, not just financially but because they may be feeling the offer they have accepted is looking less soundly based for any number of reasons. So, at the end of the day it is really how much you want that property and if you can afford it, bearing in mind the the advice above ^^^ about what the mortgage company may value the property. Some may say that is gazumping, but in my book that is only the case when an offer over and above the asking price is being made - until then you are simply making a better offer and hope the seller sees your credentials as the one that better suits them. 1 Quote Link to comment Share on other sites More sharing options...
nimz Posted February 12, 2017 Share Posted February 12, 2017 (edited) I'm never moving house ever again. Ever. How people do it over and over again I've no idea, packing boxes is soul destroying and the stress is just off the chart, especially now mortgage companies are bellends after the new rules were brought in. Been living in London for a while now and so for one reason or another we've ended up moving every year for the last 4 years and you're right, its bloody awful. Thankfully the last move was us selling up to leave London and, as we were out of the country, we had to pay somebody to pack everything up and move it. Worth. Every. Penny. Edited February 12, 2017 by nimz Quote Link to comment Share on other sites More sharing options...
TomBorehamUK Posted February 15, 2017 Author Share Posted February 15, 2017 It's not that we're trying to make a profit, more so just protecting our investment. I appreciate house price increases are relative, I just would be worried about this property being worth less in the future as we bought it way over market value, while the houses we would then want to buy when up sizing would be out of reach. Anyway, EA called back again asking to get an offer out of us but for now we've decided to leave it, keep an eye on it while we continue on our search - went to view about 8 more over the week, didn't like any of them. 1 Quote Link to comment Share on other sites More sharing options...
Adrian@TORQEN Posted February 15, 2017 Share Posted February 15, 2017 The house we're looking to buy is on the market for £425k, sold last time in April 2011 for £310k. That's 37% increase in 6 years, no improvements made (extensions, refurbishment etc) After speaking with many EA friends, they say we should offer £360k to start with which I feel it's a "low ball" offer We're seeing the house tomorrow, but from the photos it looks amazing, it's the "perfect" place we need for now. I'd be happy for anything under £400k... Good luck with your purchase, Tom! Quote Link to comment Share on other sites More sharing options...
rabbitstew Posted February 15, 2017 Share Posted February 15, 2017 I really dont understand house prices half the time. My old house, when i came to sell that, I looked at sold prices for the last few years. My neighbour sold their house 2 years previous needing total renovation for £170k, and there was one 3 doors away also needing total renovation up for £145k. Id just spent over £35k on my house having every room re-done, new bathroom, kitchen, triple garage and landscaped gardens/patio etc. Even spent over £1000 just having the stairs all ripped out and replaced with new. Estate agent valued it at £165k which was fair enough, but noone wanted to pay that, in the end it went for £150k. So, just £5k more than one 3 doors away needing total renovation. Go figure. Then again, a 2 bed bungalow in my current road was bought by a property developer for £150k 8 months ago. He basically fitted new kitchen, bathroom & gravelled the small garden, then put it straight up for £220k. I was amazed as the highest price any 2 bed bungalow in my road has ever gone for was £160k. I was even more amazed when it sold within a month for £220k! I couldnt believe it. 1 Quote Link to comment Share on other sites More sharing options...
JetSet Posted February 15, 2017 Share Posted February 15, 2017 I would not be obsessed by trying to turn a 'profit' on a family home. Most price changes are makert wide, so if a £100k house goes up by 10% the owners may feel great... Till they have to move, and the £200k house they want to buy has also gone up by 10%, so actually their £10k net worse off due to price increases. Yep, I paid £16.5k for my house some 38 years ago and it's valued at £225k now. Sounds great, but if I wanted to move to a house worth £20k back in 1978 that'd be worth £250 to £270k today. The thing is that house prices don't go up at a linear rate. In the first 2 years mine went up 25% then it leveled out for many years with another large spike in the mid 1990's and a bit of a slump around 2008 but the general trend is up. Won't do me much good though . Pete Quote Link to comment Share on other sites More sharing options...
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