Overpriced... I think so - do you?

roseland69

We have had an offer on our place and have accepted (hurrah) so are now looking to either buy or, if we can't find anything, rent. We favour renting to be honest, but should the "right" house come up - and the right price - we'd buy as it'd be our home for a long time probably.

So we see a house. According to propertybee its been on Rightmoves since March. No reductions AT ALL (which is also odd as most places have a reduction if they're still there since then). Its a 4 bed detached, priced on Rightmove at £400K. A tad over our budget (by £30K at least). But it has v. good sized rooms, nice garden in a quiet cul-de-sac in a non estate area. It is a corner plot which is nice. The decor inside is VERY tired though. I think older people lived there as its got the look of 1980's taste, beige kitchen and "pub" carpets in the dining room (which is crying out to be knocked through into the kitchen to make a nice big kitchen/breakfast room overlooking the garden). So it needs some serious work to spruce it up. Anyway...

I checked on houseprices and was surprised to find that out of all the sales on the close its on since 2000 the biggest was for a detached property (as this one is), sold in July 2007 (the very peak) for £395K. Which got me sitting up a bit. I know from looking at this area for some time that prices are around 15% - 20% down from the peak. I've watched one gorgeous place plummet from £550K to £435K over the past year as an example (there are many like it) you get the picture.

I've given the owners the benefit of the doubt and thought that perhaps this house is a lot bigger than the mystery £395K house (being a corner plot). So I've been generous to them and imagined it would have sold for £415000 back in 2007. Take the average of say 17% off that price would still value it at £344,000. Less a bit because its kitchen needs ripping out and its a bit knackered looking (I can do knackered ).

Anyway, we are going to look at it next week. And if we like it may put an offer in at about £320K and go from there. Of course we expect to get turned down at that price (and for the agent to laugh and baulk at our cheek) but its a base from which we would be willing to move from to an extent. But to me the £400K price is crazy. It would be the most expensive property ever to sell on that close. Quite something a year + into a massive property crash! I wonder if the Estate Agent or seller were on something they day they priced it up? Do they not realise people check these things out? I almost think they don't want to sell it as its so out of whack. Double so given its in need of work inside.

Are we mad at making such a low offer compared to the sale price though? I guess they can just say no. There is no onward chain so not sure what the story is with it; the owners are definitely old I'd say from the decor. Can you ask an agent flat out what the story is? I will of course but is it "done".

But what is the lowest offer you have put in, ratio wise, to the price of the house in this pricerange? In this case at the house is "up" for £400K and we will offer £320 that's a 20% drop for them. The 20% they seem to have forgotten to take off their house in the first place as it goes! I know "normally" you should offer 10% less but I'm just not happy that the current "for sale" price is in any way rational/realistic. I'm almost inclined to wait to see if it drops to say £375 and THEN go for the viewing and offer. I'll be amazed if someone buys it at the price it is though...

Sorry that I'm not posting a link by the way but rather not if that's okay. Nothing to hide but the house (lest someone else spot it! ) and running the risk (however slim) of someone connected with the house seeing it and getting wind of my cunning plan :A).

So... If they say no and aren't willing to negotiate, fine. We'll just walk away. Depending on the price (and our sale, of course), we'd have around 60% + of LTV so the mortage side for us isn't a worry. But we do want to lower our mortgage from what it is now (particularly with interest rate rises looming) and we don't want to stretch ourselves. Getting this place say for £340K would be just the job. £10K on doing it up (a wall needs knocking through, kitchen putting in and wood floors in living room/entrance hall (I love wood floors). But just doing that would make it very nice I think and a perfect family home for us.

Thanks for reading this far.

I'll probably get a call from our Agent saying our buyer has pulled out or something and it'll be all pointless anyway. Ah, optimistic me!

RL x

Patmoore

Love to read the responses to this. In a very similar position.

The property we are looking at is at 375k and we're going in at about 15% less. The agent has agreed that the price is inflated, so we are chancing it. It's quite hard to call what to do but given the insane amount of research that buyers/sellers can do now, to make that informed decision, less can be said of offers being cheeky or whatever.

More so in todays market, with some sellers just not being realisitic or themselves chancing it by loading their properties higher than their worth.

sirhan_sirhan

What part of the country are you in?

Current RICS statistics show that, in the north for instance, the average accepted offer is 26% below asking price:

http://www.moneyhighstreet.com/finance-news/2658/

Many sellers have delusional aspirations, don't let this sway your perception of what you think the property is worth to yourself.

Hope this helps.

Cidersid

I'm also going to look at a house thats been on the market since oct 08!! and the price hasnt dropped at all. I rang the EA and they said the buyer doesnt want anyone viewing unless they are in position to buy ASAP and doesnt wanna really budge on the price!! Now i know i'm buying a home not house but this is the most important financial transaction i'll ever make! :money:

Some sellers seem to live in cloud cuckoo land - as do some buyers (me probably)

Jazzie99

We looked at a house that was on the market for £400k. It needed at least £50k worth of renovatation. Another house on the street that needed work went for £330k. Another house that was in perfect condition went for £385k.

We offered £320k... three other people offered within the region of £370k-£380k.... if the house is in an excellent area with excellent schools, then people with more money than sense will pay top dollar!! Even in this market.

By the way, the area is bordering London/Essex and the Central Line is closeby... houses on that estate are selling like hot cakes (albeit probably £25-30k less than at the height of the market).

It really does depend on where you live but go with your low offer... you've got nothing to lose!

roseland69

sirhan_sirhan wrote: »

What part of the country are you in?

Current RICS statistics show that, in the north for instance, the average accepted offer is 26% below asking price:


Many sellers have delusional aspirations, don't let this sway your perception of what you think the property is worth to yourself.

Hope this helps.

Hi - we're in the South East - about 35 miles out of London so still in commuterland but only just. I guess the problem here isn't so much the percentage drop of the offer we want to put in (if we like it - we haven't seen it yet, just in photos!) but the price its on for in the first place. I'm only being cheeky due to its asking price. If they asked what I think is sensible (say it was on for £360K - and I'm being generous) then I'd still make the same £320K offer and then it would just be 10% below asking which seems to be an acceptable norm.

By the way, here is the land registry sold prices info for the close the house is on. Its not a big close so only a few houses on it:

1 01/10/2007 £196,500 Semi F
2 12/07/2007 £395,000 Det. F
3 23/08/2005 £68,000 Ter. L
4 30/08/2002 £250,000 Det. F

To give an idea of prices. Its a mix. But I've done a googlemap on the £395K address and that house looks to be the biggest there. To put it into perspective.

I guess there is a part of me that doesn't like confrontation, which I know I'm going to get from the Agent/owner should we offer so comparitvely low. But nothing ventured, nothing gained! We hope to view it Sunday. Heh, who knows, may hate it and its all academic.

As for other houses not budging - there's a 4 bed detached not a million miles from this house that's been up for £365K and hasn't changed price SINCE WE HAD OUR PLACE ON THE MARKET THE FIRST TIME ROUND, AT THE BEGINNING OF 2008! Do these type of people really want to sell...? Weird.

Patmoore

Well just had a chat with the agent. Again he said and I quote 'You'll find all houses currently are over-inflated as sellers are try to make up the shortfall in the market'.

I'm not used to this level of honesty in an agent. He still tried his best to get us to make an offer but admitted our opening gambit would likely be turned down and it's too low.

I'll swimming in a sea of self doubt as well now

Should maybe have just gone in at £325k and then left it, as opposed to chickening out.

roseland69

Patmoore wrote: »

Well just had a chat with the agent. Again he said and I quote 'You'll find all houses currently are over-inflated as sellers are try to make up the shortfall in the market'.

I'm not used to this level of honesty in an agent. He still tried his best to get us to make an offer but admitted our opening gambit would likely be turned down and it's too low.

I'll swimming in a sea of self doubt as well now

Should maybe have just gone in at £325k and then left it, as opposed to chickening out.

haha - an honest agent. Who'd have thunk it!! :rotfl:

If we like it we'll make an offer and if they reject we'll up it by 10 grand. If they reject we'll say fine and walk away but leave the offer on the table should they have cause to reflect a year from now when its still unsold! And if they do come back... we'll review our offer and knock another £10K off it (maybe more, depending on the market then)

Just rung a lettings agency for the town the house is in. Happy to rent and wait it out if needs be - for this or any other house that comes up that we like.

Our sale is still going through apparently. First time home owners, but its the MOTHER of the chap who wants to buy it who's stumping up the funds apparently. haha, I had to laugh when I heard that. I love my mum but I don't think she'll be footing the bill for my house any time soon!! Ah well...

pinkshoes

roseland69 wrote: »

The decor inside is VERY tired though. I think older people lived there as its got the look of 1980's taste, beige kitchen and "pub" carpets in the dining room (which is crying out to be knocked through into the kitchen to make a nice big kitchen/breakfast room overlooking the garden). So it needs some serious work to spruce it up. Anyway...

It's always going to be a compromise of what the buyer wants to pay for it, and what the seller is willing to sell at. Are there LOTS of similar properties for sale, or is this one somewhat unique?

The bit about older people living there implies they're perhaps mortgage free, so maybe in no hurry whatsoever to sell, and are happy to sit tight, and are merely testing the water by putting it up for sale.

Given you're in a chain, your offer is a bit cheeky!! It would be more tempting to the seller if you were either a FTB or a cash buyer!!

Catblue

roseland69 wrote: »

haha - an honest agent. Who'd have thunk it!! :rotfl:

If we like it we'll make an offer and if they reject we'll up it by 10 grand. If they reject we'll say fine and walk away but leave the offer on the table should they have cause to reflect a year from now when its still unsold! And if they do come back... we'll review our offer and knock another £10K off it (maybe more, depending on the market then)

Just rung a lettings agency for the town the house is in. Happy to rent and wait it out if needs be - for this or any other house that comes up that we like.

Our sale is still going through apparently. First time home owners, but its the MOTHER of the chap who wants to buy it who's stumping up the funds apparently. haha, I had to laugh when I heard that. I love my mum but I don't think she'll be footing the bill for my house any time soon!! Ah well...

Whoa there.

Just go and see this house first. You are getting completely carried away with things. It must truly be a great house if you are already doing the sale negotiations in your head, so maybe not as overpriced as you say.

First things first people. View the house first. If you like it, go and view it again, pricing up every single thing in the house that it will cost you to fix/replace. Only then should you be agonising about your offer.

roseland69

Catblue wrote: »

Whoa there.

Just go and see this house first. You are getting completely carried away with things. It must truly be a great house if you are already doing the sale negotiations in your head, so maybe not as overpriced as you say.

First things first people. View the house first. If you like it, go and view it again, pricing up every single thing in the house that it will cost you to fix/replace. Only then should you be agonising about your offer.

I'm a Virgo. We overthink all decisions to the smallest of detail in advance!

I'm already speaking to a nice lady at a lettings agency. So definitely hedging our bets and not committed to anything. I am actually quite dispationate about it all (I know, I perhaps don't come across that way). I get caught up in the detail but I also rather like our equity and don't want to fritter it away because we get carried away one day on Rightmoves.

But your advice is gratefully received all the same.

RL x