What to offer

MDL74

A house we like is up for sale at £315k - a similar house was sold in March 2007 for £240k and i've found out the vendor purchased this house in 2003 for c£200k. It's been for sale for over 6 months (orig at £340k) and the vendor is moving in to rented accom. We are chain free.

The house has been improved and is in good condition but the improvements were made when the vendors bought it, although the boiler is from the 1970/80s and needs renewing - i know the advice is to bid what we think it's worth but i'm looking for feedback/suggestions from people not driven by the heart!

I have phoned the EA and asked him to explain to me why it is valued as such - any advice?

Cannon_Fodder

http://forums.moneysavingexpert.com/showthread.html?t=1907059

MDL74

Thanks, i did read that before posting - and that is probably the reason why i posted as my valuation would be significantly lower based on information available.

I really don't want to overpay for it - mainly for financial purposes as the asking price would stretch us to the very limit - i also don't want to insult the owner or to not be taken seriously.

Is it a reasonable request to ask the EA to validate his valuation? Should i push him for a response?
Should i put in an offer and state my reasons why i am offering so low - does this info get fed back to the vendor by law or by ethics?
Could it be that the EA has overvalued the house to get the business and doesn't want to lose face having already dropped the price by £25k?

I'm new to this and this house is going to be a very considered purchase as a family home for 10 years or so and therefore i really don't want to get this wrong

Cannon_Fodder

You can ask the EA to validate the valuation. It might be set at the vendor's insistence, which they might admit to. If its their own mis-valuation, they are unlikely to admit to it.

What the EA chooses to pass onto the vendor will vary by vendor/EA etc. Nothing in law.

Some recommend putting an offer in writing, to spell the issues out clearly. The trouble I have with that, is that if you base an offer on a factor that relies on your opinion, perhaps without all the necessary expertise, you are putting into black and white something that could offend, be inaccurate, or otherwise inadvertently weaken your argument.

Perhaps better to keep it simple and vague. The survey might give you extra ammunition to revisit negotiatons, anyway.

Plenty of houses have been dropping by £25k over the last six months, and are still doing so now, even when they have only been on the market for a month, so the EAs should be used to having egg on their face.

NAEA figues showed that sold prices were falling short of asking prices by 6% at the end of 2009. It was, iirc, 8% in the summer. So if the EA/vendor had built that sort of leeway into the price to "generously negotiate down from" then dropping to £315k is potentially just getting to the real valuation.

This doesn't mean you shouldn't further adjust that by comparables and local market movement since that value was set 6 months ago.

If you want more accuracy, we'll need to see the property link...