1st-Timers Buying Landlords Flat! Advice on Flat Valuation?!

master_ian

Hi All,

Thanks for reading my post. What I really am looking for is just some opinions of the situation below--We're inexperienced 1st time Buyers!

My sister and I will be buying our 1st property in the spring next year, and one of our options is to buy my landlords 2-bedroom flat (I've been living here for nearly 5 years!). Granted, it is above the budget--however--I'm hoping to strike some sort of deal with him as I'm a family friend (mates with his son). The budget is 190K, however, we're willing to wait and save more/OR try to negotiate a deal where we can 'spread out' the payments.
WHY are we considering this even if it's above the budget you ask??! Because:
1) I love the can see myself living in this area long-term, and would rather own the flat than pay rent.
2) of the potential ease of the transaction--I'm already here (no moving needed), no flat hunting/viewing needed, I know the landlord and his family ( he has been good to me: have lived here for 5 years and no rent rise, yet service charges have gone up considerably), less of the time/money expected to waste on the typical home buying process.
3) We're willing to wait a bit longer to save a little more --as we're not in rush to buy.

It's location is on the edge of the CITY in London (aldgate, E1) and is a very nice, albeit small flat--within a 10-story block converted in 1998, with 24-hour concierge, private gated parking, communal roof terrace on the 10th Floor, lifts. Having checked on sale prices on nethouseprices, I've found that in the last 6 months 2-bedroom flats in this building have a wide range of sold figures...from £187K to 265K. See: http://www.nethouseprices.com/index.php?con=sold_prices_street_detail&locality=TOWER+HAMLETS&town=LONDON&street=COMMERCIAL+ROAD&postcode=E11NZ&search_radius=150&cCode=EW&year=six&house_style=F&house_age=ob&house_type=&find_postcode=&find_locality=&find_town=&find_street=&eastingToSearch=53420&northingToSearch=18120&pcsaCode=

And lately, there's been one on sale for £299K!! DOH! This is the figure my landlord has been looking at. The thing is that they are not all dimensionally equal, and we'll need to get someone in to value the place. This is where I feel we can get closer to the lower end prices...The second bedroom is tiny--measuring just 8.5ft x 7.5ft. Here are the dimensions, in case any experts in the house:
All in feet:

Reception: 14 x 11
Kitchen: 9.75 x 8
Bathroom 4.5 x 9.25
Bedroom 1 7.5 x 8.5
Bedroom 2 9.5 x 12 (incl built-in wardrobe)

Flat is on the 8th Floor, served by a lift. Everything is in good condition...walls newly painted (we did that-landlord paid), double-glazing south-facing aspect. Built-in Washing machine in kitchen.

Having compared the sold properties dimensions, I've found Bedroom 1 to be the smallest of ANY bedroom. Also, the reception is small in comparision to the pricier flats.

I realize we'll have to get someone to value the flat, but any THOUGHTS/OPINIONS considering the smaller dimensions of the flat.

Many thanks...

lynzpower

In order to value any property your best bet ( oor the LLS best bet) is to get 3 estate agents round to do a valuation.

I advise not foxtons they are expensive- sometimes I dont know where they get thier prices from!

But once hes had 3 valuations, voila take the median price of the three.

thats the best possible way of valuing, however, a property is only worth what someone is wiling to pay for it.

Dont pay any more for it than its been valued at, otherwise this is not moneysaving!

UK007BullDog

I cover the areas of E & SE London.

The gap of £100,000 from your estimate to the flats sold recently is quite large. The only way to find out is to actually pay for a survey. Or get 3 to 4 estate agents in to give you an appraisal. (pretend you contemplate selling) its sneaky but hey we all do work for free If the other flat sold for nearly £300K I cannot see them giving you much of a discount, it depends how much the property is mortgaged up to and how much he needs to release the mortgage on it. If they do I want a friend like that too!

It does not seem to matter much about the second spare room being small, what is more of a consideration is the area and the public transport links in the area.

As the flat is quite high up not every lender will lend on it. It is classed as a higher risk so you might not be getting the most competitive rates. If the property is ex-local authority, with shared balcony access and if your credit record is not spotless then the rates will be even less competitive and the lenders willing to lend will have narrowed considerably.

How much deposit do you have? And how old are you?

To lengthen the mortgage term I would only recommend if you had problems paying for the mortgage on a repayment scheme. Otherwise stick to the shortest term possible. However the main thing is how much do you and your friend earn to be able to support this mortgage and how much can you borrow in the first place.

master_ian

Cheers Bulldog...

Well, we're not in the best position probably...

I'm 32 and freelance with an annual income of about £30K
My sis is 30 and works as an Occupational Therapist and earns £35K

We have a deposit of 20K at the moment ie 10% of 200K.

If the dimensions have very little impact on decreasing the price we're basically screwed for this option! And as you said, even as a friend--there's no way he'd discount it that much...mmmm.

Still though, love the property, and will get a valuer in. Probably the estate agent idea you proposed. Nice one.

Cheers.

lynzpower

try cityfish whio are based at the middle of brick lane with the junction of bricklane & bethnal green road by the redchurch-

there are a lot of scumhole mock EAs round there, ensure you pick someone who is fairly well respected.

master_ian

Cheers Lynz.

lynzpower

Also to say, dont discount looking around either.

You wouldnt buy the firtst car you saw ( would you ) so I certainly wouldnt buy the first flat I saw particularly if its got a duff 2nd room.

there might be better elsewhere