Would you pay more than a house is 'worth' if you loved it?

arthur_22

I have a first-time buyer dilemma. Have fallen in love with a little house. It has been on the market for absolutely ages - since at least March 2008. It has gradually dropped in price from 125k to 115k to 113k. Was on at 115k for entire 2009 year, dropped to £113k at beginning of this year.

I have offered 110k and it has been rejected (offered a lower amount first). Sellers want £112 or no deal, as that's apparently what they 'need' to be able to move. They are not bluffing as a) I have left things for over a month now and they haven't caved in and b) they have now put the house on the market with another EA saying 'offers over £112k'.

Now....I love this house. I know all the stuff about a house being worth whatever someone is prepared to pay for it. But I also think that if a house that has been on the market for an entire year at 115k and didn't get a single offer of 112k then it can't be worth 112k, and I really don't want to be the naive FTB who comes in and pays top whack when no-one else would.

I think the vendors want to move abroad. They also have a one year-old child (it's a small one-bedroom starter house) so they will have to have more room at some point.

So - I guess I have a couple of questions. Has anyone here paid top whack just because you wanted the house so much? Or have you ever been selling a house and held on and held on for the top price and eventually got it, or do houses that are on the market forever always have to come down in price?

ciano125

Rule one when buying houses, don't fall in love with it until after you've bought it. Doh!

If nobody else is offering that, why would you? What if you needed to sell it for whatever reason? Just because they "need" that amount to move on to what they want does not mean that the house is worth that. I think that has been proven by the fact that nobody else is interested. £110k sounds like a decent offer if they want £112k, I think they're silly not to take that, but obviously I don't know all the facts.

If you really really must have this house, why not go back with £112k but stipulate that they have to pay your legal fees and mortgage arrangement fees etc? Its all negotiable.

I still think if nobody else has shown any interest at £X, £Y or £Z, that tells the story though.

CLAPTON

a small one beroomed house is (presumably) a temporary home for you?

so think about the resale value when/if you have kids and need to move and don't overpay.

AfterDark

Personally I would go that little bit extra for a house I loved. But if you think the price is really OTT, I wouldn't pay it. No one else will and they will have to lower the price at some point. Hang in there

Annisele

If I loved a house and I could see myself staying there for thirty or forty years, then yes, I might overpay.

For something that you describe as a "starter house", I absolutely wouldn't. There are plenty more houses out there, and if it hasn't shifted in more than a year I suspect it might not even be worth £110k.

The amount the vendors "need" has nothing to do with the amount I as a buyer would be willing to pay.

arthur_22

Thanks for the replies. Clapton - for various reasons there are definitely no kids in the future, so I think I would live there for at least five years, and to be honest probably much longer than that - I'm not someone who needs a lot of space.

I was told by the EA that the vendors had had one offer right back when the house was first on the market, which they declined and now regret. I guess that was right back before the market went kaput, so who knows why they turned it down. I can sympathise a bit as they must have had EAs giving them very high values when they put it on the market and then had to watch it slowly go down in price...can't be fun.

So...resale isn't really a huge factor, but I still find myself torn...

FlyingBrief

So you are prepared to offer £110k, and they want £112k...why not ask if they'll split the difference i.e. £111k. That sounds perfectly reasonable. At the end of the day, you'll be paying just £1k more for a house which you have said you love.

As to what it is worth when you want to resell, much will depend on how long you think you're likely to stay on for - are you planning on having an expansion to your domestic life [partner/kids] in the near future? If so, then going for a small house no one else has been prepared to pay £112k for might be a gamble if it then proves too small for your near future needs...but if you are happy that the house will be perfectly adequate for your needs for a longer while [at least until the market picks up in a few years time], then it shouldn't be an issue.

To answer your 2 questions:
1] Yes we have, but
2] Yes we have sold them on pretty near to or at the full asking price afterwards as well.

Good luck!

RobertoMoir

their problems are not your problems. There's a difference between paying a little over the odds to seal a deal and letting your emotions turn you into a chump.

The question is why do you love this house so much, could you find that elsewhere and how much over the odds would you be paying?

Would the "lovely little house" still be quite so lovely in 5 years time if you needed a 2 bedroom house and can't sell because you "need" £115k to be able to afford to sell, and the place is really only worth £100k on a good day. Are you about to fall into the same trap the current residents are in?

arthur_22

Flyingbrief - from what I can tell the 112 is absolutely set in stone. Surely they would have come back with a counter offer of 111 if that's what they would accept by now? Or put it on with that other EA at offers over 111.

From comparing the place with flats I have seen and calculating square footage etc I would estimate that the house is 'worth' definitely more than 100, but definitely less than 112.

Roberto, you sum it up nicely. A chump I do not want to be. There aren't many starter houses in the areas I like, but there are some nice flats.

Fire_Fox

arthur_22 wrote: »

Thanks for the replies. Clapton - for various reasons there are definitely no kids in the future, so I think I would live there for at least five years, and to be honest probably much longer than that - I'm not someone who needs a lot of space.

You keep saying I, is there no possibility you will end up as one half of a couple in the next five years? :huh: One bedroom accommodation is not usually enough for two people and certainly not if you want a dog or a couple of cats! You can't easily have overnight guests nor a home office, you can't let a room if money gets tight and it will appeal to a narrow market if you need to let or sell the whole house. Any chance you'd need to relocate for employment before five years is up?

I wouldn't pay over the odds for anything less than a two bedroom, it's just so much more flexible. I bought this flat six years ago as a single thirty-something knowing I'd probably never have kids, and can honestly see myself living here for many more years for the reasons given in the paragraph above. Two bedrooms is just so much more flexible. :cool:

timmyt

arthur_22 wrote: »

I have a first-time buyer dilemma. Have fallen in love with a little house. It has been on the market for absolutely ages - since at least March 2008. It has gradually dropped in price from 125k to 115k to 113k. Was on at 115k for entire 2009 year, dropped to £113k at beginning of this year.

I have offered 110k and it has been rejected (offered a lower amount first). Sellers want £112 or no deal, as that's apparently what they 'need' to be able to move. They are not bluffing as a) I have left things for over a month now and they haven't caved in and b) they have now put the house on the market with another EA saying 'offers over £112k'.

Now....I love this house. I know all the stuff about a house being worth whatever someone is prepared to pay for it. But I also think that if a house that has been on the market for an entire year at 115k and didn't get a single offer of 112k then it can't be worth 112k, and I really don't want to be the naive FTB who comes in and pays top whack when no-one else would.

I think the vendors want to move abroad. They also have a one year-old child (it's a small one-bedroom starter house) so they will have to have more room at some point.

So - I guess I have a couple of questions. Has anyone here paid top whack just because you wanted the house so much? Or have you ever been selling a house and held on and held on for the top price and eventually got it, or do houses that are on the market forever always have to come down in price?

Price is just what someone is willing to pay. If your lender valued it lower than ou were offering then they may not lend as much but otherwise, sure, people pay that bit extra to get their dream house.

I have - but then again, @@@@ agent held out for the price we ended up paying risking me withdrawing...risky game but he won, as we wanted the house. Actually we were happpy to pay even more than we eventually paid as we were moving away from London so our money could buy a palace compared to what we sold for