What would you do?

macgirl

We are very interested in a house that has been on the market a few months and the price has recently been reduced by £50k.

We are considering our offer and are thinking of a price that is about 13% under the new asking price - but still about £10k above what they paid - according to House prices.

I have just noticed that the house next door sold a few months ago for slightly less than the vendors paid for theirs 4 years ago...

Therefore, do we go in at the same price (which is £100k less than the initial asking price). I know an asking price is just that and it was obviously massively overpriced in the first place, but it feels really cheeky.....

I should add that we have a mortgage agreed in principle and have nothing to sell so could complete quickly. They are relocating and want to move during the school holidays.

EDIT: The house was last sold 6 years ago - not 4, so the one next door sold for more or less the same price 5 years later

mufi

I would offer what your research tells you the property is worth - that's the only factual evidence in the equation. Many vendors and estate agents are still living in 2007 fairyland, to the degree that we now almost ignore asking prices. Before any agents leap to the defence of their colleagues and blame the vendors for unrealistic expectations, we had four agents to value our property, resulting in a difference in valuation of £200,000 between the highest and the lowest, and it's not a million pound house, so one can only conclude that they haven't got a clue either.

The knack is knowing when to walk...

macgirl

Thanks mufi I agree, but I'd expect that to be knocked back.

I guess the last decade has lulled people into a false sense of the market in that property always appreciates in value. Vendors think it's a given that they will get more than they paid for it.

It is a very special house, but I know there will be others. thanks for your input

mufi

You can but try - as we were in no hurry to sell, we started off by putting our house on the market nearer to the higher valuation to test the market; you never know. We believed it to be hopelessly overpriced and were proved right (no viewings gives one a little clue...) - your vendors may also know that their property is overpriced, but are still living in hope.

If it's any comfort, we ended up selling for £110,000 under our initial unrealistic asking price, and are perfectly happy with the outcome.

macgirl

That is some comfort yes! But would you have been happy had that been less than you had bought it for?

You are right, it's about what today's market value is - plus they are in a hurry to sell.......I'll keep you posted

macgirl

I was up half the night reading the House Price Debate thread and scaring myself to death!
It was definitely a reality check and as we having another viewing this morning, I want to be mentally prepared.

What does anyone think of the Nationwide House Prices Index? According to them, the property has increased in value by between £10-15k (between when the neighbouring house sold and now)....which is what we thought. I guess there might be a difference between the state of repair between this house and the one next door, which validates the higher asking price?

Like anyone, we don't want to pay over the odds when the market indicates a downturn. My head is spinning

jonewer

Relax a bit. If you're buying a home then the price is laregly irrelevant so long as you can afford it. If you're buying an investment, then panic!