How to renegotiate house price

thequant

adeelmpk wrote: »

thequant, I was kinda disappointed when my surveyor didn't mark the property value down. I guess he just went in ticked a few boxes and didn't bother too much research about the prices. After speaking to some local estate agents [minus the one I'm buying from] and zoopla/mouseproperty data, it seems that I'm paying about 8-10% above property price i.e., about 20-25K more.

On the plus side I haven't been gazumped yet considering the premium I'm paying it would not be viable for someone else to bid any higher. Just to let you know there is lack of properties in this area and they're picked off like hot cakes as soon as something comes on market.

I'm still trying to justify the increase in 6 months [i.e., June 2013 and December 2013] which is 13.5% for the house sold right opposite. The only difference is the one I'm buying is an end of terrace and the other one is mid-terraced. Still a 13.5% increase in 6 months ?? Is it me or does that really sound unrealistic ?

My surveyor agreed the valuation yet in the homebuyers said it was only worth that provided the works he highlighted were done and it would be difficult to sell until they were


So I'm expecting some grief off my vendors when I try to renegotiate.


13.5% is high, that's nearly 30% when annualised. Especially considering (depending which source you use) that rises are somewhere between 5% & 10 % in the last year. And that is being described as a bubble in some quarters.


If you want to get a fair idea of a houses worth. First thing is check out the zoopla estimates for similar properties. These are slagged off in some quarters, however if the estimates are consistent then their is a high chance the estimate is solid.


However the zoopla estimates are done using LR data Plus average rises in LR data for local area. As transactions take about 6 months to complete that's means there is a lag in the recent data.


So you need to estimate the rise in the last 6 months and add that onto the zoopla estimate if you deem that as being good. To do this you can use the nationwide/Halifax data for the last 6 months for your area.

becominganobsessivesaver

Realistically for a sale in June then the offer would have been made and accepted in March, maybe even earlier. The market was different last winter so a 10% increase in 9 months is probably not unheard of. If you start renegotiating now you may find that you are chasing rising prices (just a possibility....)

adeelmpk

thequant wrote: »

13.5% is high, that's nearly 30% when annualised. Especially considering (depending which source you use) that rises are somewhere between 5% & 10 % in the last year. And that is being described as a bubble in some quarters.

The stats I mentioned above are actually from LR data and also available on zoopla.

The house I'm buying is an end of terrace [number 5] and this is the original sale price in Aug 2011.
Property type: End of terrace | Tenure: Freehold | Last sale: £269,000 | Sale date: 15th Aug 2011

The house right opposite [number 4], sold in June 2013 for price below.
Property type: Terraced | Tenure: Freehold | Last sale: £295,000 | Sale date: 12th Jun 2013

And I'm buying number 5 for 335,000, in December 2013.

The only difference between two houses, is the end of terrace vs mid-terrace. But you can see the difference.

MysteryMe

No one chanced their arm and the valuation report seems to indicate that the marketed value was not over priced.

Thrugelmir

adeelmpk wrote: »

thequant, I was kinda disappointed when my surveyor didn't mark the property value down. Since I asked for a basic survey I guess surveyor just did a drive and OKAYed the priced suggested by bank.

Surveyor works for the bank not you. You are merely paying the banks costs by opting for the basic valuation. Unlikely they would have done a drive by, not how the process works these days.

All the surveyor did was to confirm to the lender that the property provided adequate security.

What somebody is prepared to pay for a property today determines its worth. Not a historic guide of prices.

adeelmpk

becominganobsessivesaver wrote: »

If you start renegotiating now you may find that you are chasing rising prices (just a possibility....)

That's a good point so there might not be much to save if I end up walking away from the deal afterall.

thequant

adeelmpk wrote: »

The stats I mentioned above are actually from LR data and also available on zoopla.

The house I'm buying is an end of terrace [number 5] and this is the original sale price in Aug 2011.
Property type: End of terrace | Tenure: Freehold | Last sale: £269,000 | Sale date: 15th Aug 2011

The house right opposite [number 4], sold in June 2013 for price below.
Property type: Terraced | Tenure: Freehold | Last sale: £295,000 | Sale date: 12th Jun 2013

And I'm buying number 5 for 335,000, in December 2013.

The only difference between two houses, is the end of terrace vs mid-terrace. But you can see the difference.

What's the zoopla estimate for your property ?

adeelmpk

Thrugelmir wrote: »

What somebody is prepared to pay for a property today determines its worth. Not a historic guide of prices.

You've summed it all up.

pinkpiglit

becominganobsessivesaver wrote: »

If you start renegotiating now you may find that you are chasing rising prices (just a possibility....)

Yep, that's what I was trying to say (it didn't come across very well) at the end of my first post.

adeelmpk

thequant wrote: »

What's the zoopla estimate for your property ?

Zoopla Estimate
£327,184

Value range
£320,274 - £334,094

According to Nationwide price index the difference from Q1 2013 to now is as below. Note I'm inputting 305k, not 295k as the value in Q1 2013 since the property I'm after is End of terrace so adding an extra 10k for that.

A property located in UK which was valued at £305,000 in Q1 of 2013 would be worth approximately £319,706 today. This is equivalent to a change of 4.82%.