Artificial prices.

carolt

Sounds like they overpaid. Their problem, not yours.

chucknorris

If you were the seller would you have accepted the 193.45k or the 178k offer?

martynh99

Thrugelmir wrote: »

Why would the vendor give them money towards the deposit?

Good question, my guess is as I originally posted - the buyer doesn't have sufficient deposit to meet mortgage requirements.

Thrugelmir wrote: »

Surely a price reduction would have sufficed?

How do you know that they got an 80% LTV?

Not if they can't meet the deposit requirements - 80% was a general figure I plucked to base my example workings on.

Thrugelmir wrote: »

If there was the amount of work needing doing that you say there was. Then the property wouldnt have been valued at the price it went on the market at.

Depends - EA will put properties on the market for more than they are worth if the vendor insists. On another estate nearby they have a 2nd hand(1 year old) property on an estate still being built - it's on the market at £233500 and is £20k more expensive than a brand new property bang across the road that is considerably bigger too.
The estate we are currently renting on has properties on that have been on the market for 18 months, they haven't reduced their prices either in that time.

Thrugelmir wrote: »

You valued the property after costing in what you wanted to spend. Unfortunately buying a house is more heart at times than cost analysis. Using historical data is totally misleading.

As you probably saw from my other thread, i'd done lots of analysis on the LR prices and what I know from living in the area for 20 years and the historic data was scarily accurate.

martynh99

chucknorris wrote: »

If you were the seller would you have accepted the 193.45k or the 178k offer?

£193450 of course - the purpose of this thread was to highlight how the house price indexes may not reflect reality - remember this house will be recorded as being sold for £199950 on the LR. If this is happening a lot the monthly average house price figures will creep up and up leading to a false sense of recovery. Also the mortgage that the buyer has acquired *may* be beyond their means(look at the calcs in the OP to see how I come to that conclusion) which could then lead to bad debt/repo's.

carolt

Is it not illegal to gift deposits? Or does that apply only with new builds?

Thrugelmir

martynh99 wrote: »

£193450 of course - the purpose of this thread was to highlight how the house price indexes may not reflect reality - remember this house will be recorded as being sold for £199950 on the LR. If this is happening a lot the monthly average house price figures will creep up and up leading to a false sense of recovery. Also the mortgage that the buyer has acquired *may* be beyond their means(look at the calcs in the OP to see how I come to that conclusion) which could then lead to bad debt/repo's.

Lets see when the figures are published what it sold for. My instinct says not. You seem to be assuming a lot.

There's a semi detached in our road that 5 years ago, had both a side and rear 2 storey extension added. So selling price when sold increased £90k. From LR how would you determine value of improvements? This is extreme but a single storey rear extension would increase value. Wouldn't be viewable from the front of the house so how would you know what had changed?

martynh99

carolt wrote: »

Is it not illegal to gift deposits? Or does that apply only with new builds?

Not sure, I would have thought it was bordering on fraud on the buyers part *if* my assumption is right about getting round the deposit requirement for the mortgage.

When we bought a new build we were given a £10000 discount for quick completion, we were also the first ones on there.

martynh99

Thrugelmir wrote: »

Lets see when the figures are published what it sold for. My instinct says not. You seem to be assuming a lot.

There's a semi detached in our road that 5 years ago, had both a side and rear 2 storey extension added. So selling price when sold increased £90k. From LR how would you determine value of improvements?
This is extreme but a single storey rear extension would increase value. Wouldn't be viewable from the front of the house so how would you know what had changed?

Errm I lived on that estate for 6 years before moving away for a short period and know lots of people on there as do our kids so know the layouts / styles of all the houses - i'm very observant and you can see which properties have had extensions/conservatories very easily due to the way the culdesacs shoot off from the feeding road.
As for value of improvements, I can tell a quality kitchen install vs a bad kitchen install. When we lived on that estate, we had a quality kitchen installed and it cost approx £4k - the one I quoted in my other thread that sold in peak of the market also had a quality kitchen.

Agreed, I am assuming in this thread and the LR figures will tell fact when they are published. The thread was to highlight that the HPI figures may be distorted if this practice is widespread.

Thrugelmir

martynh99 wrote: »

As for value of improvements, I can tell a quality kitchen install vs a bad kitchen install.

I use to have a neighbour like you ........:rolleyes:

martynh99

Thrugelmir wrote: »

I use to have a neighbour like you ........:rolleyes:

so have you figured out yet why we moved out of the area only kidding.
We had an experience with having a kitchen fitted that ended up in small claims court (we won). Also had lots of snags on new build kitchen aswell which is why I feel able to make my statement.