House price - how do you know what something is worth?

ukbondraider

You say a similar house was sold in October at £106K. Did you get this date from Nethouseprices or the land registry etc. If so, you have to remember that it would have taken many months before it was officially documented by the land registry so the house could have in fact sold in Feb or March.

Secondly for some unknown reason house prices have experienced a significant increase over xmas. I have seen a house sell recently for £340K despite an identical one selling for £299K just before xmas. Likewise another house sold for £560K with an identical one selling mid last year for £495K.

In short, you cannot simply rely on previous prices as the only guide to a value of a property as there will always be someone foolish or clueless who will pay the prices.

Like another poster has stated, estate agent will overvalue the house to get the business but the problem is, is that someone out there is paying that price meaning the inflated price now becomes the benchmark to base further inflated prices.

Phirefly

wiggly wrote:

I like the house yes, but I wouldn't want to be here more than 3years - I'm a country girl and this is in Birmingham, I need space!

Which is ultimately where I want to be, but to get there we need some money into a house first

I'm the same. We're looking at our house as a 3, 5 year max timescale before I want to get back to the muck of my country bumpkin roots. In the meantime though, we're more relieved every day that we held out for this house as it gives us some time to really decide what we need from a property and where we want to live. When we were in your position of shopping around, we got so muddled over what we needed/could afford etc that its just a massive relief to buy our rented house that we know suits us and is going to be easy to sell.

Try not to set too much store on the £106k that other property went for. As another poster said, it IS realistic that the value could have increased, and as I said, in my street there was a 8k increase in sale price between october and january on identical houses. We were also told that the lower sale price was priced low to sell and sold in a week, that could be the same as the £106K house you're making comparisons with.

As FTB with money stretched, its such peace of mind to have the prior knowledge of the property. Many of the lovely Victorian terraces we viewed would have been great but I'd have been freaking out over all the unknown structural gremlins lurking just waiting to jump out and suck our bank accounts dry.

I think you're right to have a look around at your other options, but try not to get too mindboggled (easy for me to say now - I lost the plot when I was in your shoes). You've mentally set your max budget and I think you should hold out for it. If you end up offering £110000, its unlikely he'll go to all the trouble of putting it on the market just for the extra couple of grand after fees. If he doesn't accept straight away, hold your nerve and call his bluff.

good luck

wiggly

Its amazing how similar we are

we're arranging to see this other house at the weekend, just for information really - like you say, we know what needs doing in this house cos we've lived here for 3 years already!

Will let you know how the EA tonight goes!

Phirefly

How exciting, I look forward to hearing how it progresses

HammersFan

A view from the other side of the fence.

I have a buy-to-let property that I may look to sell soon. Have a tenant who has been there for 2 years and has given me no trouble, and kept the place in really good order. My view would be that if the tenant would buy, I would avoid about 3 months void (£1500), 1.5% agents fees (+VAT) (£2500), and a heap of hassle / uncertaintly. I would come down £5000 from what I would accept (not what I would ask) on the open market, and still consider that a decent deal given the robust rises in property values (and the fact that any gain is subject to 40% CGT). Also, you will (obviously) save in removal costs and hassles. I have sold another house after a tenant left, and it sold quickly, to a first time buyer, and still left me with 12 weeks void (so have that in mind when negotiating).

In response to other comments...in my view robust valuations are coming in partly because buyers now tend to ask for a lot more off the asking price, so the bar is being set higher in the first place. Here in the east mids, growth in actual selling prices has been pretty realisitic (5-6%) for about 3 years now. I think you have to have a close look at local market conditions before betting on there being a crash (london is a unique market, and some localised booms are proving short-lived). But I would get on the property ladder sooner rather than later - even 5% growth in prices is another 5-6k to find in year's time, and you have to pay rent while you wait.

Best wishes with the house-hunting / buying.

wiggly

will you be my LL please or at least teach mine some sense

Dead_Eye_Jones

when I bought, we went to see every, and i mean every, property in our class in the area. Saw them all in about 2 weeks - about 20 places! We then went back to the ones we liked and started the negotiations.

I think that there were so many properties on last year really helped, we had a good idea of what you could get and could laugh of silly asking prices by pointing out that such and such property down the road was only asking...

We fell in love with one particular place and tried not to show this to the EAs involved. We went in way under, they said no of course, but they came back to us with a 'we would accept this...' price. It seemed fair to us so we went for it!

Obviously if this is the only nice place in the area and there will be competition for it, its unlikely a low offer is going to win out. Its all about supply and demand I guess. If a few people really want the place it could go even higher than 115k! If no one wants it and its still on the market in a few months time, maybe a low offer will start to look attractive!

I think you have to decide how much you would be prepared to pay for it, base this on what else you could get in your area for that money. If there really are no other houses that you like, then you might have to start thinking about paying more - thats life!

Id also reassure you that houses come and go from the market all the time, if you dont get this, something better will come along sooner or later. Dont rush into and stretch yourself just for the sake of it.

wiggly

nah its not that nice, lots needs doing, theres no garden, no parking space, etc

well the EA today has said £100k, which matches the first EA, he also said he thought the LL would ask for £110-115k cos "they're all selfish" (he wasn't impressed it was me showing him the house and not the LL himself

ah well, I know the LL will say they have all averaged £115k, do we say the EA's have told us the value?

wiggly

oh and the fantasy house we were off to see has sold already :eek: that solves that dilemma

Tiger_greeneyes

wiggly wrote:

nah its not that nice, lots needs doing, theres no garden, no parking space, etc

well the EA today has said £100k, which matches the first EA, he also said he thought the LL would ask for £110-115k cos "they're all selfish" (he wasn't impressed it was me showing him the house and not the LL himself

ah well, I know the LL will say they have all averaged £115k, do we say the EA's have told us the value?

I'd be tempted to make the LL an offer of £100k. He's doing well - no estate agents fees, quick sale, he doesn't have to have an empty house while he's looking for another tenant/purchaser - and he knows it!

If the LL argues the toss, then tell him that the EA has told you the value. Then leave the ball in the LL's court. There's no point paying over the odds for a property The only money you'll be saving is the cost of a removals van. The LL has more to lose than you do

If the LL is holding out for more money then it's up to you - try increasing your offer a bit and then keep quiet - it's just a battle of wills at the end of the day.

Let us know when the housewarming party is :beer: