Exchanging Contracts on Monday - Worried we might have overpaid

92203

Hello,

Apologies for the rather drawn out nature of this thread ;

Until the government drove the housing market crazy with Help to Buy, we were happily building up our deposit with the aim of buying a £150 K house with a 25% deposit. We currently have £20K saved and are growing this by 1K PCM

We ended up looking to buy a house sooner (through fear of being priced out), and have managed to find something in a reasonable area (not somewhere we'd have ideally chosen), however I have a few concerns ;

• The house sold for £117K in 2007, we are paying £129K for it. The EA said a lot has been done to it (including new kitchen, bathroom and conservatory), however I have managed to find it's listing/advert from 2007 (archived on right move) and the conservatory had already been built. Could redecoration, new bathroom, kitchen and carpets really add that much value?
• A larger house across the road sold for £122 K in April (Same number of bedrooms, similar era and style). Admittedly it's not in as good condition and is without a conservatory (which ours has), but nevertheless is cheaper
• The house is built ontop of a former landfill - classed as inert by environment agency landfill map (eg. buried glass/concrete etc) (flagged in homecheck searches as being potentially unstable/poluted land)
• The house is built on land classed as prone to flooding, the last recorded flood I have been able to trace was in 1947 (flagged homecheck searches as high risk)

With regard to the searchesI understand that Homecheck tend to be a bit pessimistic and alarmist, however despite this and factoring in the above, would it still be wise to proceed?

What about the price of the house in comparison to it's previous sold price and the house which sold near it? Am I being fleeced?

Unfortunately this is pretty critical - in order to find something nice and within our price range, we have had to set our sights on living in a smaller city with less opportunity and transport links (My girlfriend is a nurse and has managed to get a job there, I work in IT so will have to keep an eye out for suitably remunerated jobs)
Thanks

92203

ellie27

I dont think the price any previous owners bought or sold it for has anything to do with todays market price.

You think its worth £129k to you, so thats why you have offered to pay that price.

If there is a much better house on the market in the same area now for £129k then perhaps you might be overpaying?

kiddakidda

I'm getting the feeling that by listing all of the pitfalls of buying this property, you are almost convincing yourself out of buying it.

Forget the price it went for in 2007, that's irrelevant. The property down the road at 122k is a bit more of a guide to price but on the basis that this is a nicer property so 129k is probably the correct value.

Only you can answer whether you really want to go to exchange with this property.

But bear in mind if you do....... It's yours.

phill99

Past prices are completely irrelevant. If you look at in inflation terms, the house has only risen by just over 1% per annum since 2007 which is well below the rate of inflation, so if you were analysing it on that basis, its probably undervalued.

Also, I assume the house has been independently valued (by the mortgage surveyor) who has confirmed the open market value.

somethingcorporate

So a similar house sold for 122k but isn't as well decorated and doesn't have a conservatory?

Do you think you could decorate a house and build a conservatory for 7k? If you did it on the cheap probably but more likely you couldn't so sounds like a reasonable value to me.

alberty

From your jobs I'm guessing you're on at least 40k between you, why are you worried about a 129k house- should have it paid off in 5 years if you're careful!?? Try paying 30% more than last year in London, now that's a bitter pill!

efbe

When you asked for a mortgage, they should have sent out an assessor to look at the house and value it (against a complete rebuild)

what value did he come up with?

efbe

alberty wrote: »

From your jobs I'm guessing you're on at least 40k between you, why are you worried about a 129k house- should have it paid off in 5 years if you're careful!?? Try paying 30% more than last year in London, now that's a bitter pill!

5 years on £40k?!?
so paying £2,000 a month?

that would leave them with around £300 left each month

92203

Thanks for the responses everyone ;

I think I'm just a bit over anxious about the whole situation.

We are moving to Lincoln. My girlfriend starts her new job there as a nurse in October. I suppose I am quite nervous about the risk of her new job going wrong.

If we had to move away and rent the place out, we would have a £200 shortfall on our mortgage repayments

I work in IT (currently down in the South East). I earn £35k, live like a hermit in a house share and save half of what I earn. Depending on how flexible my employers are with letting me work from home, I may end up looking for an IT job up there. Typical pay in Lincoln would be £18-25K. I did have a job there before the recession paying £27K, though I think I was exceptionally lucky!

alberty

efbe wrote: »

5 years on £40k?!?
so paying £2,000 a month?

that would leave them with around £300 left each month

How did you get to that, 40k between 2 people on say 15k and 25k is about 2800 per month? You could live on about 800 if you cared about being mortgage free in 5 years more than getting hammered every weekend. Not counting any tax credits or other work/state benefits

efbe

Lincoln is a lovely place, but do be careful. don't overstretch yourselves.

It would be a bit of a commute, but there are good IT jobs up around sheffield and nottingham.

Also watch out for the Scottish independence thing. there may be a lot of IT contracting jobs coming up if there is a Yes vote!