How to know what to offer

MrChandlerBing

How do you judge what to offer on a house?

We're keen on a property and we know how much it cost in 2009 and we know what it's on for now (8% more)

Is there a tool to see area by area average house price increase (or decrease in a lot of cases unfortunately..)

It's hard to know where to go in without being insulting. We're first time buyers and very 'proceedeable' if that helps.

Thanks

LisaLou1982

Theres no set formula - Just because a house was worth "x" in 2006 doesnt mean it is now worth "y"

How does it compare to everything else you have seen?

Is it priced within the same bracket of other properties in the area?

There are tools online to look at an average price but they are unreliable as all they can take into account is the asking price.

The best way is to go and take a look at a few properties that meet your criteria and see what you can get for the money.

MrChandlerBing

Well I can see what houses are on for which is the same sort of price as the one we like. However what use is that if you can't see what they sold for?

This is hard

LisaLou1982

What difference does it make what they previously sold for?

All that matters is what is available now for the price. If it is in line with other properties that are selling in the area then they are obviously in the right sort of bracket.

You dont know what condition these properties were in when they were sold last time. Nor do you know the reasons they were previously sold.

I bought my property 2 yrs ago at a very good price. If i sold it now i know that i could easily achieve £20k more. By your reckoning, would you expect to pay what i paid because of how long id owned it? Its a naive view. Look at what is available, what is selling and what they are CURRENTLY achieving.

If a similar house has recently sold for a similar price to what you want to buy then obviously its in the right sort of bracket. If theyre all priced the same but the ones that have sold in a similar location and condition have achieved 10k less then offer accordingly.

Its all about comparibles

Better_Days

It is hard but if you use mouseprice or nethouseprice or zoopla you can identify the sold prices in the past (I think it goes up to 7 years) in specific postcodes/areas.

So do some research and you will start to get a feel for the area. In addition to the sold prices of comparable properties (as near to now as possible) then there are other variables which may make a difference - does the vendor want a quick sale? is it a probate? is it a repossession? is it a relationship split? is it a part exchange? is there something about that particular property that makes it more/less attractive to a particular buyer? Also what is the position of the buyer - are they in a chain? Does the vendor like them? Are they cash buyers? Are they a PITA?

So there is a major part of the calculation that is based on comparable sold prices, but there is also an element of luck/chance and variables that may be impossible to quantify.

It gets even more difficult, when as is sometimes the case, there are no comparable properties nearby that have sold in the last 7 years.

HAMISH_MCTAVISH

MrChandlerBing wrote: »

However what use is that if you can't see what they sold for?

You can see what the most recent comparable sales were in the area on sites like Zoopla.

Land registry also does average price by area.

Gromitt

Indeed, sometimes it is impossible to calculate a price, and a property may be on the market for years as its only worth what someone is prepared to pay for it.

I offered on a house and got it on my second offer. I was told on both occasions that the seller had received a higher offer, but the seller decided to sell to me in the end because I was proceedable (the higher offer was from someone with property to sell). I was happy with the price I paid.

Better_Days

A few years ago I refused an offer from a neighbour simply because I didn't like him and certainly didn't trust him. From the way he treated his wife I thought it wasn't beyond the bounds of possibility that he would become abusive if he didn't get what he wanted. Plus I wouldn't put it past him to try and lower the price just before exchange.

A friend had 2 proceedable buyers and chose the lower offer because she felt this buyer would be less likely to mess her around and she liked her more. Her sale went through smoothly so it was a good choice.

No way to account for variables like this.