House valuation query

int3rc3ptor

Hi,

Four years ago I bought my house for £170k, next door a chap took his 4 bedroom place off the market as it didn't sell (got completed towards end of property boom) it was on for £225k.

On the other side of me, my neighbours have just accepted a price on their house for the simple reason that they'd had enough with it being on the market and wanted shot of it.

Now this house is an exact layout mirror image of mine (3 bed).

So, they went on at £159k fair enough I appreciated it would have lost something in the downturn, but due to lack of interest they put it down to £155k

Before Christmas a couple came to view and put an offer in for £147k, they initially turned it down, but now have accepted it.

So in a round about way, does their selling their property have any effect on mine if I were to put it on the market for their original price of £159k or even higher knowing next door's went at a silly price in my opinion

Guess what I'm saying is that I'm assuming that sold price of £147k will appear on various search results, etc. So I'm wondering that as they're sold because they've had enough will that price have a much bigger negative impact on the potential selling price of mine regardless of it's condition, etc

Any thoughts would be appreciated

Regards

Darren

JQ.

Yes it will have an impact. Ultimately, their house is worth £147k, their reasons for accepting that offer are to a degree immaterial - we all have reasons for selling, unless it's a Repossession it's not a forced sale. If you consider your house and theirs are very similar then your house is probably worth £147k. Why not pop round and ask if you can have a nosey, explaining the reason, and guage whether yours or theirs is better.

Yes, once the sale gets registered at the Land Registry, anyone can find out how much it sold for - so I would imagine people would use that evidence to place a value on your house - it would be pretty hard not to if as you say they are identical and it's only just happened.

However, it may take a while to appear on the Land Registry - I don't know how long but I'm sure someone on here will. So that may give you a window of opportunity to get it sold before the evidence becomes available on the net. Although, if you did get a buyer, no doubt the Surveyor doing the valuation will have that evidence available to them, so even if you do get more than £147k the valuation may be at £147k and they try to reduce their offer.

int3rc3ptor

Thanks JQ, that was exactly what I was looking to know, appreciate your reply

tyler80

In my experience it takes about a month to see sold prices from the land registry

JQ.

tyler80 wrote: »

In my experience it takes about a month to see sold prices from the land registry

Wow, I didn't know it was that quick, I had assumed something like 6 months.

stokesley

One that I've been tracking appeared on Land Registry yesterday. It sold on 1 February this year, so took nearly 2 months.

tyler80

I think it depends where in the month it sells as they only seem to update once a month. Two houses I was looking at, one sold 4th Feb the other the 21st and both appeared on the website yesterday.

flecker

Going by the national average, your neighbours did alright to get 147k for something that was 170k at peak. (I make that a 13.5% drop. On Halifax figures, we've seen a 15.3% drop since Feb 07.)

Obviously it depends where you are in the country - none of this applies if you're in London

int3rc3ptor

The house is in Cornwall, probably not too dissimilar to London, half of Londoners have second homes down here ha ha

dopester

There are old people living on my street who bought their semis, way back in 1953, for £1,900 and who still live there in 2011.

They've seen the value of their semi rise, because over the years new transactions (people selling and people buying) on the street, and local area, have been at progressively higher sums of transaction price..

In 2001 you could get a semi on our street for £130,000. That was asking price of one which became available which sold for that. Then a massive spurt of HPI, with easy credit, and ones which became available were selling at £350,000 to near £400,000.

The buyers being prepared to pay more, sellers asking more, lenders lending more... all allowed values to rise. Not just for one transaction... but impacts on values of all the houses on the street and the local area. The market conditions in play, as seen as happening in the active market.

The reverse effect happens when sellers and buyers transact at lower prices. Values fall, and fall for everyone, including owners of similar homes in the area. It's all part of the education. It's how markets work.

Asset prices rise not because of "buying" per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher.

All that everyone else - including those who own some of that asset and those who do not - need do is nothing.

Conversely, for prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high. If no other bids are competing with that buyer's, then the value of the asset falls, and it falls for everyone who owns it. If a million other people own it, then their net worth goes down even though they did nothing. Two investors made it happen by transacting, and the rest of the investors made it happen by choosing not to disagree with their price. Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land.