First time buyers - where to get advice?

catpaw

Hello, we are first time buyers and feeling a bit daunted by the process. Our biggest fear is paying over the odds for a property.

We have taken the advice that is contained on this website in terms of valuations and a good example is this:

one house we have seen is in a street of new builds (2006) and we can see that a couple of them sold last year for less than the original purchase price, or very close to it. Looking further back there are others that sold 3 or 4 so years ago, and these also went for less or very similar to the purchase price.

Now the one house that we have looked at (and like) is a bit larger but it's the same build, same year etc and it's being advertised at 30% (£120k) more than the purchase price, even taking into account a good deal would still see us paying a 25% increase which doesn't seem to be in line with the 2 that sold in 2013.

Is this irrational? Compared to what we have seen it actually seems an OKish price, but that's just comparing it to others currently on the market, which obviously haven't sold.

Does anyone know of any private advice line / service (paid or otherwsie) that we can use to get some honest answers & help?

Thanks

TrixA

There's heaps of good advice available on this site but no one is going to be able to advise you on whether an asking price is reasonable as not. On the face of it it does sound like that particular property may be over-priced, but it will depend on the condition. It also depends on where you are as in some areas of the country prices will have increased by 20% in a year. Land registry sold prices are always several months out of date.

A good piece of advice I had as a FTB was not to get too hung up on what the 'right' price was, or what other people's tactics were, and to focus only on the price I was prepared to pay for the property, and could afford. If you're happy with the price, and are intending to stay in the property for a number of years, then you haven't paid 'over the odds'.

catpaw

TrixA wrote: »

There's heaps of good advice available on this site but no one is going to be able to advise you on whether an asking price is reasonable as not. On the face of it it does sound like that particular property may be over-priced, but it will depend on the condition. It also depends on where you are as in some areas of the country prices will have increased by 20% in a year. Land registry sold prices are always several months out of date.

A good piece of advice I had as a FTB was not to get too hung up on what the 'right' price was, or what other people's tactics were, and to focus only on the price I was prepared to pay for the property, and could afford. If you're happy with the price, and are intending to stay in the property for a number of years, then you haven't paid 'over the odds'.

Thanks but we would like the option of moving on in 2-5 years time and regardless we don't really want to pay 100k more than it's market value - even if to our naive eyes it seems OK.

A few people have said there is no true value to a house, it's worth whatever someone will pay for it, but to be honest I don't really get that logic; you'd never pay £60k for a £20k Ford Focus, or £1000 for a £500 iPhone?

Or am I missing something?

TrixA

catpaw wrote: »

Thanks but we would like the option of moving on in 2-5 years time and regardless we don't really want to pay 100k more than it's market value - even if to our naive eyes it seems OK.

A few people have said there is no true value to a house, it's worth whatever someone will pay for it, but to be honest I don't really get that logic; you'd never pay £60k for a £20k Ford Focus, or £1000 for a £500 iPhone?

Or am I missing something?

Every iPhone or Ford Focus is identical and you know exactly what you're getting. With houses, every one is different - even properties of the same age and construction will have been maintained differently, decorated differently etc. Also, supply of iPhones and cars is not constrained in the same way that houses are. If there were multiple buyers for every available iPhone, people probably would pay £1000 for one.

eddddy

catpaw wrote: »

...
Does anyone know of any private advice line / service (paid or otherwsie) that we can use to get some honest answers & help?

If you are buying with a mortgage, the mortgage company will arrange a valuation.

(They do this to protect themselves. If you fail to pay the mortgage, they will repossess the house and sell it. They want to know how much it would sell for.)

Additionally, you can arrange your own valuation - often combined with a survey that reports on the condition of the property. You would have to pay for this.

If you do this, maybe look for a local firm of 'Estate Agents and Chartered Surveyors'. They are likely to know the property market in the local area well.

You would make an offer first, before arranging the valuation. But if the valuation turns out to be lower than your offer, you can use this as a basis for negotiating your offer down.

(If the valuation is low and you can't negotiate an acceptable price with the vendor, you would have to walk away and lose the valuation fee you had paid.)

Edit to add:

The above assumes you are in England - it's all different in Scotland.

stator

If you are a FTB with a high LTV, eg 90-95% the mortgage valuation becomes key. I would be wary of making offers above the similar prices sold on the same street. IF the mortgage valuation comes back too low you would have to lower your offer or pull out.

TrixA

But be aware that a mortgage valuation will normally come back at exactly the amount you offered (the valuer will be aware of what price has been agreed), unless there's something clearly wrong with the house in which case it may come back at a lower value. I've never heard of one coming back at a higher value than the offer. Valuations are not an exact science so provided they think the offer is in the right ballpark they'll normally just agree with it.

martin.cat

It's all ifs and buts

Generally prices are similar to 2006 but more in London

If you want specific advise you would need to post more info

At the end of the day do what you are comfortable with

jbainbridge

Reading your post it sounds like you have a good idea of what you are doing! Researching similar properties and their sold prices is exactly what you need to do.

Our house was built in 2005. We bought it in 2012 at which point it had spent over 2 years on the market - at first £55k above what we paid for it. We eventually paid £15k under the original purchase price. Looking at all the sold prices for the street none of them have sold for more than the original price.

Good luck in your search!

john_white

Remember though, in 2005/2006 new build sold prices don't actually reflect the real sold price.


We bought in 2006, sold price shows as 199,950, we paid less than this. Think it was the way it worked back then, the price is x with y discount, but the higher figure shows. Not sure when it changed.