Received offers but worried house has been undervalued

[Deleted User]

I would really appreciate some advice from others on this subject if possible.

We put our house on the market just over a week ago - well, my fiancee did as it's her house - and it was put on at a fixed price of £249,995 (no offers). This was because - the EA advised her - the stamp duty threshold means it won't sell for anything more than that, even if its 'value' is around £260 - £270k.

We got three EAs round, all of which asked her 'how much are you hoping to get for it' before giving her the valuation and inspecting the property. She told them £250k.

This weekend, we received five offers on the property out of five viewings. All fine, except now that I've got involved I'm interested (not concerned, but curious) that maybe the property wasn't valued accurately to begin with, and that because my OH told them what she wanted, they simply shifted their valuation down to that. Or - in other words - we shouldn't have told the OH what we wanted first.

In our area, nothing has really sold since 2008, and sort-of-similar properties were going for £240k then. However, these aren't similar enough to compare: both were townhouses, whereas ours is a simple up-and-down. Our house is 4 years old, these were 10. Our house was Bryant, they were Barratts. Ours is 2 bedrooms with 2 bathrooms (quite rare) whereas they only have one bathroom. It's a desirable estate and two of those putting in offers have waited over a year specifically for a property in our estate to come on the market.

We have seen comparable 2 bed properties on the market in the local area at a guide price of £280 - £290k but only after the EA put our property on the market.

We're not disputing the valuation, but we're quite worried that we're about to throw away a potential £20k having done further research. This is one of life's lessons which may be absolutely fine, but I'd rather learn the lesson before we throw money away.

We thought that the stamp duty threshold would 'cap' the value of our property, but others seem to be on the market (with others) for much higher. We've had 5 offers out of 5 in the first weekend, so clearly people think it's a good price. But we are worried that the EA has valued it at £250k just to get their sale (a bird in the hand is worth 2 in the bush and all that).

So, what do we do?

My OH has raised this with the EA but got fobbed off - and I'm due to speak with them later, but I don't know the best approach to take. We've got 5 offers - and it's on at a fixed price - so I'm assuming we can't go back and challenge their valuation and put the price UP now, can we?

We're not hugely fussed about losing these offers - we haven't found anywhere that we like and we're struggling - as we're already quite tight on the money side of things - so what should we do?

[Deleted User]

Just to add to the above, there's a 'stamp duty shadow' at £250k at which point is doesn't make sense for buyers to offer. I reckon it's from £250k - £260k ish. But actually, compared to other properties I think we should be on for £280k which might be high enough about the threshold to tempt people.

cte1111

I can understand your concern. Whilst it's great to get offers, 5 out of 5 viewings does tend to suggest it's underpriced.

You don't have to accept any of the offers, but if you don't then it probably would leave you liable to paying the estate agent's fees. They usually write in to the contract that if they find you a buyer who is ready, willing and able to proceed, then you owe them the fees, whether you proceed or not.

If you put it back on the market at £280,000, the potential buyers are likely to already know that it was previously on at £250,000 so you might well just end up with the same offers.

[Deleted User]

I'm going to look at the EA's terms again - I wasn't there when my OH signed them, but I did glance over them and I'm pretty sure it was 'no sale, no fees', so should be ok on that front - it's not just 'introducing a buyer'.

Here's a link to the property:

http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pid=5699331

And a link to the sold prices in the area:

http://www.findaproperty.com/soldsearch.aspx?edid=00&salerent=0&pid=5699331&sp=0&sporder=4

ILW

Were all the offers at asking price?

[Deleted User]

Yes - all offers on the money. The EA has told them that we won't (and indeed, can't) accept anything lower.

begbeer

My way of thinking is accept the money, a bird in the hand is worth two in the bush, if you put if back on the market for 280k you might wait ages for another buyer, another alternative is to have a sealed bid with all five interested parties not sure how you go about this though

Chinkle

Does sound like you have a rather lazy estate agent. With five offers at asking price how do you choose between them? They should have suggested going to sealed bids, so get on the phone now and ask them to set this up.

You will inevitably find some will choose not to because £250 is their top budget. But by doing this you will then find the properties natural selling price and there's nothing like a bit of competition to help drive that up.

Essex_Maid

Give the other two EA's a telephone call, and ask them what price they would recommend putting it on the market and what you could reasonably expect to get.

I am surprised tho, that if £250k was very under what they would have recommended that they would have said so at the time. But if you want to sell, you do have to be very competitive.
The current EA may have given you good advice, eg priced it at a price it will sell. In some areas there is not a lot of new property coming on to the market, and that might be why u have got eager buyers, who could all evaporate if you put the price up. If u do decided to go ahead the EA should be finding out the financial status of the people to see if they can actually proceed - and the sealed bids suggested below is a good idea.


It really shows that you have to do your homework. Look carefully at the paper work to see what has been agreed.

Running_Horse

There is a house on for £270,000 near us where the vendors are offering to pay any extra stamp duty. But it has been on for a long time, and maybe there is just a psychological thing about going above £250,000. With so much interest, maybe you could offer it on sealed bids on the basis that the stamp duty will be as if £250,000?

A slight word of warning though. During the last boom, both us and a neighbour sold on day one for full asking price. The neighbour turned down the offer and ordered the EA to put it back on the market for £20,000 extra. We proceeded and moved to our dream home. The neighbour didn't sell and the market crashed, and eventually the house was withdrawn unsold.

Only you know how important it is worth taking a risk for a few thousand extra.

delmar39

You could get another EA round to do a valuation and see what they come up with. Do not tell them what you're expecting to get. However, the EA will know what it's up for as they'll do their research before turning up. What was the average of your three original valuations? At the end of the day the valuations are a guide on which you can make your final decision. If you've had a lot of interest and offers, sounds to me like people think it's a good deal (too cheap though?). Just depends. You've had offer, if you then up the price you may not get any for a year or so and lose out. I'd be careful in terms of how you proceed with this. After all, you did tell the EAs that you wanted £250k.....