Swore I'd never post one of these - but what should we offer next?

9wizard9

OK, so it's a very subjective question, but I really want to get some second opinions.

We've just offered on a house that we think is slightly overpriced. It was bought in Oct 2007 for £226,000, then there was a load of work done on it:
single story extension to kitchen
moving bathroom upstairs
moving some internal walls
loft conversion
new ensuite bathroom
new kitchen

It's now on for £319,000.

We offered £275,000 because the house next door sold for £245,000 in December, and because the local Land Registry index values it at £198,000 now (albeit without the substantial work).

My question:
How much is the house really worth? - I can't believe that the work adds enough value to take it to 319, but the agent said that the vendor was very keen to achieve asking price and wouldn't consider our offer. Although I guess they'll always say that to a first offer.

My gut feel says that any more than £295,000 is probably too much, but I'm not sure it's even worth making another offer unless the vendor is prepared to negotiate somewhat. What would anyone else do?

Tempted to go into the agents office on Saturday and offer £285,000 (the first offer was slightly cheeky IMHO), but don't know if I'm just wasting my time.

Can't believe that trying to buy has suddenly made me so irrational that I'm posting this - I know that you can only give very subjective opinions, but I'm afraid I'm asking anyway just to keep my sanity.

JA1000

They have to put forward your offer, they cannot refuse to, if you think they have knock on the door of the house and ask if they have had an offer put forward.

Offer what you like but when the surveyor visits you will get your accurate valuation, if this is below your offer they will not lend and you have ammunition to put in a lower offer.

9wizard9

Thanks for the reply - I know we're being really silly - all the sensible advice is stuff that I already know really, just need someone to reiterate it as we're getting emotionally involved (as everyone will tell us not too).

Can't go round - it's unoccupied at the moment - looks as though it's developers of some description who bought it at a bargain price and have done it up. I'm reasonably sure the agent did put the offer forward (though I've no real evidence), just not sure how much room for negotiation there is. Is it likely to harm our bargaining position asking outright if there is any room for negotiation at all at this stage? My other half isn't impressed with the idea of simply going back with a slightly higher offer, though that's my inclination at the moment.

The other difficulty is deciding how much value the work they've done adds. It's finished fairly well, although it's still a fairly cheap ikea kitchen, so I'm guessing they've not gone high end on the stuff they've fitted.

I think I probably know the answer, which is to decide on a maximum and offer up to that before leaving it alone. Just very hard to decide what an appropriate maximum is with so little to compare it to. It's in a very nice location in the midst of fields in green belt, but still very close to the centre of the village, so fairly unique in that respect. Don't want to end up paying over the odds and then be unable to sell for a reasonable price in a few years time.

Sorry - rant over. think I probably just need to vent, as I know the answers to most of these questions. That said, if anyone's got any idea how much value you would expect to be added by the work they've done, feel free to comment.

Doozergirl

I wouldn't use the price they padi as the major guide for what it is currently worth. That said, I'd argue that £226k is not a knock down price for something which you then completely gut and add space out and upwards.

The comparison can only be the square footage compared to the price of other properties. If you have seen similar sized houses yourself for similar prices then the asking price is possibly fair.

However, is the garden big enough to cope with a house that has been extended to that degree? Is it overdeveloped - if so the value added will not be as much as if the plot could easily cope with the extra space.

The house that sold for £245k - was that extended at all? Presumably in decent nick which would make your own vendors purchase price of £226k just fair presuming it needed work when they bought it.

I suspect that the project will have cost them in the region of £50k if the loft conversion is a good and proper one.

Doesn't help you with what it's worth but you can look further afield for comparables. There will be villages not far away with similar house price levels and you can look at the prices there as well. Even houses you don't like - you can look at the room sizes and compare what you get for your money. Anything that is already under offer is brilliant for a reflection of the current market.

9wizard9

Thanks Doozergirl

Very useful to get an (albeit distant) view of how much the development might have cost. It's hard to gauge exactly how much work was done, but I know the bathroom was still downstairs when they started, so I'm guessing it wasn't in the best condition when they bought it.

Been reallt struggling to find decent comparisons, even in neighbouring villages - the prices round here seem very sensitive to location - this village has good transport links, so prices are inflated compared to nearby. The village itself is rather small, so there aren't many previous sale prices to go from, so I'm mainly basing my judgement on the purchase price for this one and the sale price for that next door property.

Handily, we actually viewed the next door property about six months ago when we were looking for a rental, so we know that it's got smaller rooms (no loft conversion) and slightly shabby decor, but not too bad. It's slightly smaller square footage, but the main selling point is probably the location, which is obviously pretty much the same being next door and all.

If I knew the house was worth the price I wouldn't be bothered about paying for it, but I don't think I can make the sums work, and don't want to pay over the odds only to find we lose out if we sell in a few years.

I though buying again would be fairly stress free after selling - how wrong I was in this market. It was so much easier the first time when prices were lower and the difference between first offer and asking price was fairly small.

Doozergirl

Don't be pushed into buying something just because it's the only thing that suits right now.

Can you describe the amount of rooms, before and after? Is it a semi or detached?

My gut keeps swinging from fair price to overpriced. In my head I have a picture of a traditional 1930s sort of semi - only because that's what would have fetched those sort of prices near me back in 2007. With a loft extension and a single sotorey extension I think they would have struggled to fetch over £300k back then you see, but that's my mental picture of a house I know nothing about!

Wanton

How long has the property been on the market for? If its only just gone up then they'll probably want to wait and see what interest is like before accepting an offer that much less than the asking price. Depending how quickly you want to move and how much you like the house, it might be worth waiting a few weeks before going back with a second viewing/higher offer.

Like has been mentioned above, the Estate Agent is legally bound to report every single offer to the vendor so if you don't get a response phone the EA and ask if they've had an answer yet. When you phone the EA maybe mention that you're only chasing it up as you have a few other properties to look at and want to know if you need to cancel the viewings or not, or something along those lines.

9wizard9

It's a mid-terrace, but quite a large one with fairly decent sized front and rear gardens. There are a few three and four bed detached houses in the same village (though not in such nice locations) for about £275,000, but they're all modern houses, hence very small rooms and very small plots. The big three and four bed houses all seem to go for well over £400,000. This definitely beats the ceiling price I've seen for a terrace here though (but it is probably the best location I've seen too).

The issue we've got is that there haven't been many houses for sale in this village, which is really where we want to live (currently renting here). There are probably only a few suitable properties that are ever going to be in our price range, but most are not for sale!

Seems pricey for a terrace, but it's been quite nicely done and the rooms are big - much smaller two bed terraces without any grounds are going for about £210,000 fairly regularly.

I'd post a Rightmove link, but i'm suddenly unnecessarily paranoid that I'll point someone else towards it, and then we'll lose it. Insane! I did have a rational brain once, honest!

It's frustrating that all the normal tips for price research just don't seem to work well in the current market where not enough stuff is selling. Hence my insane outburst into asking the internet for it's opinion :-)