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A house is worth what someone is prepared to pay for it
RHemmings
Posts: 4,895 Forumite
In this forum we frequently hear people say that a house is worth what someone is prepared to pay for it. Usually when a surveyor has "undervalued" a house.
If the market turned and started dropping, then it's probable that potential buyers will start making "low-ball" offers. If that happens, will home-owners think that their property is worth what someone is prepared to pay for it, or do you all think we'll hear moans about not being able to sell the property "for what it's worth"?
If the market turned and started dropping, then it's probable that potential buyers will start making "low-ball" offers. If that happens, will home-owners think that their property is worth what someone is prepared to pay for it, or do you all think we'll hear moans about not being able to sell the property "for what it's worth"?
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If that happens we will hear it but my view is that a anything is worth any given amount for an instant only ... so yes, it's always worth what someone is prepared to pay, never more, never less, and its value today can easily be different from yesterday or tomorrow.Debt at highest: September 2003 - £26,350 :eek:
Debt now: £14,100 :rolleyes:
Debt free day: October 2008 :beer:0 -
I agree with DavidHM.
This is indicated quite simply by the way that any surveyor will establish the value of a property.
They visit local estate agents and gather comparable evidence of similar properties and what they SOLD for (not what they were marketed for). This is a direct representation of what people have paid for the properties and that this is what the surveyor value is based on.
Therefore property is worth only what someone will pay for it. Until it has actually SOLD and completed the property is in effect worthless.0 -
There are 2 meanings of 'worth' here:
A house is worth what someone is prepared to pay for it.
A valuer will state a house is worth what the bank is prepared to lend against it.0 -
Generali wrote:There are 2 meanings of 'worth' here:
A house is worth what someone is prepared to pay for it.
A valuer will state a house is worth what the bank is prepared to lend against it.
Not quite accurate.
The valuer will state that the purchase price is fair based on comparable evidence irrespective of the amount of mortgage, assuming that the comparable evidence backs up the SOLD price.
Example:
Purchase price £150,000
Mortgage £100,000
Valuer will state the value is £150,000 and that it is suitable security for mortgage purposes.
Purchase price £150,000
Mortgage £45,000
Valuer will still state that the value is £150,000 and that it is suitable security for mortgage purposes.0 -
Did anybody see that "top end" agent on TV last week? He seemed to be saying that his £5M appartments were dictating the property market and that they weren't overpriced as lower price "feeder properties" would rise to fill the vacuum!
Yeah right...0 -
I agree with AndrewSmith the valuer will always quote the purchase price as the property's worth. When we bought our house when the market collapsed in the early 90's the valuer ended up writing 2 reports because the price we'd agreed to purchase it at was considerably lower than the price it was advertised at. Originally it was £36,000 and for mortgage purposes the valuer had agreed at £36,000 but when he found out that our offer of £16,500 (the couple were splitting up - he was selling the house she was to get the profit of £23!) had been accepted he immeadiately printed up a new valuation saying that the property was worth £16,500 for mortgage purposes."As we know, there are known knowns. There are things we know we know. We also know there are known unknowns. That is to say we know there are some things we do not know. But there are also unknown unknowns; The ones we don't know we don't know."
Donald Rumsfeld0 -
what happens if the mortgage company values the house at less than the offer?Trying to get on top of finances one step at a time0
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It would affect the LTV ratio.0
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wiggly wrote:what happens if the mortgage company values the house at less than the offer?
The mortgage company lend based on either the purchase price or valuation, whichever is the lower.0 -
Is a surveyor likely to differentiate between a property being worth £192K and £195K?0
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