Where are EA's getting valuations from??

Gizmogiz

Me and hubby are FTBs and have been looking for a house since the new year.

We are struggling to work out how EAs are valuing properties. We have seen one we like, on at £239,950. It is a 3 bed semi in Cardiff. It doesn't really need much doing to it but it is quite small downstairs esp the kitchen. We would want to extend this at some point. (It is in a great area with v good schools nearby hence the price).

I have looked at sold prices in that road and 2 3 bed semi's sold in 2007 for £228k and £233.5k which when indexed to todays values makes them £201,470 and £206,330 respectively. These both have slightly bigger plots and would be easier to extend due to the shape of the plots and where the garages are.

What do you guys think would be a reasonable price to pay for this property? We already went in with an offer of £215k last week which unsurprisingly they rejected almost immediately.
We were told originally that the seller keen to move but when we put our offer in they said he's not in a hurry to move and wants closer to the asking price.

We haven't rushed in with another offer, its been a week now. At 90% LTV so don't want to overpay for something as we'll end up in negative equity pretty quickly if prices drop.

All comments gratefully received.

ILW

If you are 90% LTV there is a good chance that the bank will value lower than your offer and that will be the end of it anyway.

phlash

I don't know what you earning capacity is, but this sounds like a big purchase for a first time buy.

My sentiment is echoed by the fact you only have a 10% deposit.

I don't understand - you've done your research and found that better houses in today's market are 'worth' 200-205k. So why offer 215k for this one?

From a risk profile, I'd buy something at around the £150k mark with a £20k deposit in today's climate.

Gizmogiz

We're nearly 30 and earn almost £60k jointly. We have nearly £30k of savings and no debt.
If we were to spend £150k we would not be able to buy the family home that we are after. I am an accountant and am very aware of risk and our budget. We can afford the repayments on this size mortgage with enough spare to have a bit of a life and save up for a family.

House prices are high in the areas we want to buy but I'm afraid we are snobs and want to bring up our family in a nice area with nice schools.

Eric1

Where are EA's getting valuations from??

In my area it's simples - 2007 prices, taking advantage of the shortage. Some actually selling at totally insane prices because there's nothing else, so you can't really blame them for taking the chance while they can.

Running_Horse

Gizmogiz wrote: »

Where are EA's getting valuations from??

Estate agents work for the vendor, not the buyer.

If you, and enough others refuse to pay too much, the price will fall.

If you think it's too expensive, don't buy it.

Gizmogiz

Ok I did kinda think that would be the opinion but I guess we're worried that we'll always think things are too expensive and will keep missing out on nice properties because there are people out there prepared to pay these crazy prices.
I wish this house buying malarky was easier - maybe if I had a crystal ball I'd be alright!

puddy

so you're borrowing 180k plus ?? its a huge amount

Gizmogiz

Yes it is a huge amount which is why we're not rushing into anything. We can't buy anything nice for less than £200k here though and we want to start a family and buy a nice family home.
We can afford the repayments.

poppysarah

Can you afford the repayments whilst one of you is on maternity leave and maybe doesn't go back to work?

Nice is all very well and good but paying over the odds isn't.

Gizmogiz

I've done some sums and yes we would just about afford it on maternity pay. Things will be a lot tighter but I see people on these boards all the time with much smaller budgets and they manage. We can easily cut back on a lot of things when the baby comes and we will have a fair amount of savings behind us.
We have really thought this through and aren't rushing blindly into anything.

At the moment, we are paying rent of £635 and saving £1,200 a month = £1,835. Mortgage would cost max £1,300 a month and I have also budgeted for increased running costs of having a 3 bed house as opposed to a flat. If we are lucky enough to start a family in the near future we could still cope with these payments.