Hiding for Nothing - viewing an over-priced over-budget house...

QTPie

Ok, we are going for our first viewing (now we have completed on the sale of our own house, are chain free and renting) tomorrow.

Yes, may be COMPLETELY nuts on so many levels:
- I am sure that the market still has further to fall.
- We are in a "bounce" (at least that is what I think) - so many vendors think that the market it shooting back up: so negotiating a good deal seems unlikely

SO I will only view houses that I absolutely adore the look of (this is the only one on the market at the moment, in this city, that I adore).

It came onto the market yesterday, is just about perfect for what we want (large family house that we wont grow out of, lots of space, reasonable sized garden, parking, quiet suburban location). Because of the insane price it came on at, I ummmed and arrred about requesting a viewing. But, you never know... if you don't try, you will never know.

Why do I think it is over-priced?
- Three doors down (identical house physically, may not have been up to same spec internally, but is currently run as a high spec guest house... I think it probably was then too - so it wasn't a wreck) sold for 6% less than the asking price of the one we are seeing tomorrow in August 2007. So houses have risen in value 6% since August 2007?
- Four doors down the other way (physically slightly different house, but very similar in size - was in very good condition when sold... I saw the details for it) sold for 16% less than the asking price of the one we are seeing tomorrow in September 2008. So houses have risen in value 16% since September 2008?
- Although I don't know whether it has any relation to the value, the house is priced at 266% of the price that the current owners bought it for in 1998 (so they are not in negative equity or anything). they haven't extended it, but have put nice kitchen and bathrooms in and it is nicely decorated. Don't know if the garden was lanscaped before of after they bought it (hard to tell - not hugely recent, but could have been within the past 11 years).

It is (at least from the details) a beautiful home and looks to be finished to a high standard. Unfortunately we live in a very popular tourist city (which can inflate values and perceptions) and there isn't a lot of property available in this sector ("large family homes") at the moment. So, who knows, maybe someone will be crazy enough to pay something near the asking price for it... Since it is 23% over our budget, we are probably on a "hiding for nothing", but we will see

I know what I think it is worth. I know what our budget is. I am pretty certain that the market has further to fall... If it isn't to be, it isn't to be (and is probably doing us a favour).

QT

QTPie

Well, went to view it.

Lovely house... but they are fully stacked with viewings and the EA is very confident that the seller wont look at offers at this point (which makes sense - been on the market two days and they are doing viewing after viewing).

On at £800k. Looking at the various house price indices (Nationwide etc) and what an identical house sold for (3 doors down) in August 2007 (£757k). Very similar sized house (a few doors down the other way) £687k in September 2008. SHOULD - if the market was predictable - be worth £635/£650k...

However so little supply of big family houses in this area - and considering the level of interest - assume it will go for £750/£780k+ :rolleyes: (WAY over our budget and VERY frustrating - we priced aggressively to sell, to find that the sort of house that we like appears to have risen in value by about 6% since Q3 2007 :rolleyes: ). House is being sold chain free - since woman is moving in with her partner in London (so, by the sounds of it, no pressure to sell).

So we have two choices:
- put in a ridiculously low (and I mean ridiculously low... 20%/25% off asking price) offer and make idiots of ourselves... OR
- sit back and watch and hope... I am pretty sure that people WILL make offers. I am guessing that someone will go in there with a good offer, but I guess you never know how many offers will be made or at what level. By not making an offer now, do we risk anything?

Or is there a way to express an interest, but not make an offer? Perhaps say that we really like it, but it is over our budget.

Am a little fustrated - since the house was very right for us. Plus 3 years ago (mid/late 2006), we could have afforded it. But now, despite the "drop" in the proprty market and the recession, we can't .

I guess the dangers of viewing a property well outside of your budget (even if you think that you "should" be able to afford it - i.e. if it was valued "correctly" ). But a property is worth what people are willing to pay for it and if that is "over the odds" then well done to the seller (who obviously made a wise investment).

It s probably just a "sign" - great property that would have served us well (for the next 20/25 years), but wrong time to buy...

QT

Annpan

Hi QTPie,
I feel for you with this as I can't understand why they think they can get more than something that sold at the peak of the housing bubble for so much less. Your estimate is bang on so maybe the other viewers are the same as you and are expecting to put in a cheeky offer and get the house. Beat them to it and insist on leaving an offer with the agent to sit on as to my mind you are a perfect buyer with nothing to sell and ready to proceed. Don't say it's over your budget, just say it's overpriced compared to identical properties which sold for less and taking into account the % drop in prices your offer is a reasonable one. Nothing to loose. Good luck!

ukcarper

I suppose supply and demand can will make a difference but I can't see any harm in putting in a low offer.

uropachild

I would say that you should put in an offer anyway. The worst that will happen is that they'll say no. Although you might feel uncomfortable putting in an "insulting" offer it's not like they know you and they will expect it as sellers in this market.

If you put in an offer you might have a (very) slim chance of it being accepted by some stroke of luck. If you don't put in an offer you don't have any chance at all.

Squirreler

We looked at and fell in love with somewhere outside our budget. We put in what we could afford which was 15% below the asking and it got accepted. They can only say no.

Also, don't listen to any hype about loads of other interest etc.

charliee_3

i'd put in your offer.. if it gets rejected wait a month and if its still on the market put it in again. the intial flurry will have died down by then and they will be able to give it proper consideration if they have had lots of viewings but no other offers
good luck!!

SwissLe

There is no damage to be done by putting an offer in. I think you make your points very well, perhaps a letter/email explaining your conservative offer. It is surprising the emotional price people put on their property - they want it to go to a 'good home'. There are always loads of 'carpet treaders' just going for a look round, coupled with the fact that agents have fewer viewing staff than ever before it leads to an apparent 'demand and busy' period. Don't be fooled.

I wouldn't assume the person isn't in negative equity - for all you know they could've been on the phone to Picture Loans for the last few years releasing every penny of equity!

QTPie

ukcarper wrote: »

I suppose supply and demand can will make a difference but I can't see any harm in putting in a low offer.

I think this must be the key - absolutely frustrating as h*ll, though... not good luck to take the pain on your property value and sell, just to find that some of the properties that you are interested in haven't lost value since peak, but may actually have increased in value...

On the philosphical side, if someone else does buy it... it the current economic climate, maybe they are doing us a favour... maybe it isn't to be. We will see.

Am still thinking it over - can't do anything until Tuesday - BUT currently favouring leaving it for a few weeks (not putting an offer in) and seeing what happens. I am pretty much 100% sure that the vendor will not accept a low offer quickly: so either it will go very quickly to a high offer OR they will hang out for a high offer... Will watch the property: if it doesn't go "under offer" in a few (two/three weeks), then I will arrange a second viewing. They may be more receptive to a lower offer then (I doubt it!) IF it is still on sale. Personally, I think that someone will crack and make a high offer... as ukcarper says, "supply and demand".

Thanks
QT

chickmug

I would be interested to know what county the house is in if you feel you can tell us as I do speak with an odd old associate (agent) and the position does seem to vary a little from area to area.

socrates

Hi

Hope 'things' are OK~!

15 or so years ago I looked at a house with my OH.

We lost it as it was IMO overpriced in a falling market - I was not prepared to pay the price full stop.

My OH cried etc etc.

Anyway 6 months later - we found a better house, better location, cheaper etc.

You obviously live in one of those unique areas which defies the norm.

I had this debate before - in my area any large house that comes onto the market is snapped up by Asians - they are even prepared to pay over the odds.

In your particular case what may happen is that the eventual valuation may fall short BUT on a similar note someone who can afford £800k will probably be in a strong position to bolster up the deal.

Good luck with your continuing search

My best to you and yours!!