Asking prices vs sold prices

kcseb

Hi all

I'm looking to buy at around £400k - 600k in London zones 1-2 and have been coming across a common problem...

When trying to work out what something is worth, sold prices for similar properties on that road are far and few between...but the few that do come up imply the property is not a bargain. Yet there's lots comparable CURRENTLY for sale which makes the property seem cheap...

The obvious conclusion is that asking prices are totally unrealistic!

Yet my personal experience has been that any half decent property (good location, well-proportioned and period) that's priced reasonably gets snapped up quick...and not far off asking price, since early on sellers won't take a low offer. Which doesn't fit with the above, as this trend should imply much higher sold prices than I'm seeing. FYI am using rightmove and zoopla to check sold prices.

Am I missing something guys?

Ta

Kevin

SecondTimeBuyer

I can't help you too much on your initial question, but download the Firefox browser and then download PropertyBee (google it). It will give you all the information on how long the property has been listed on right move, at what prices, and will show changes in the listing. It's a great tool that will assist you on valuing properties.

princeofpounds

You can track something called the 'index of delusion' which takes the ratio of the rightmove index (asking prices) to nationwide/halifax index (mortgaged prices, which is close to actual selling prices as revealed several months later in the land registry).

It's not quite apples for apples as each index has a different base, but you can read conclusions into the ratio.

And basically it shows that ever since the financial crisis there has been a big gap between asking prices and sold prices where there wasn't much of one before (The actual numbers went I think from something like 3% to 14% discount, although I havent run it for some time).

Anyway, the point is yes, many asking prices, in London in particular, are unrealistic. Many sellers are pricing high, pricing in a discount from the beginning but happy of course to receive a full offer. The market is very thin at the moment with few sellers and few buyers, so the process of 'price discovery' as we call it in the markets is not very good.

leeelw

a mortgage surveyor will look for

a sale in the same area within last 3 months - if this is not viable you take a comparison area for reputation and comparable house for accommodation

3 sold comparisons from the agent (when they valued it, what was the valuation based on)

a brief view on how much was paid when the house was brought, and what the trend history has done since, you must take account of - was the property redeveloped and extended which can disjoint these figures

within these variance you can get a ball park figure

following on from that, how does it compare to what else is avaible to buy, what is the compition ?

as to good priced houses sell quickly, this is true but they usually are sought after locations as well whereby its bread & butter for the EA.

the best way is keep in touch with the good EA, call them regular and be on their radar, when the right one comes up, they will call you first