Would you buy an "overpriced" house

phoebe1989seb

For a long term dream house/special property, yes.....

We've done this previously - no borrowing involved - but the house was a totally unique period property that we were very keen to secure

varghesejim

catshark88 wrote: »

Just interested really as I may be about to do this and although very happy with my decision, I am a little embarrassed when explaining it to the surveyor!

So,

Assuming it's a cash purchase and tht affordability was OK, would you buy a house you loved, if it was more expensive than previous sales (of same quality) suggested that it should be?

(The one I'm looking at is part of limited housing stock of that size and type, in a very small town, is exactly what I'm looking for I'd hope to own it for life.)

Yes. But at most our one months family income is the "premium" above the market price I would pay.

Bench marking your premium against something(like in my case my family income) can help, IMHO.

catshark88

varghesejim wrote: »

Yes. But at most our one months family income is the "premium" above the market price I would pay.

Bench marking your premium against something(like in my case my family income) can help, IMHO.

That's a really helpful way of looking at it.
:beer:

Cyberman60

stator wrote: »

The reason house prices go up is because people keep paying over the odds

It's just that most people like to pretend they're not

Not true. The reason they are going up is that buying is long-term a far better idea than renting and there is a shortage of housing due to many factors which cause demand for the product, not least unfettered immigration, low interest rates, the 'right to buy' and BTL/investment. :beer:

PasturesNew

I bought a house I thought was overpriced just last year - and it wasn't even a perfect house, just "a house, any house, need to get one". If I'd not bought this one then prices might have gone up and I would have spent more on renting something hideous, always dreading inspections etc. If I'd not bought this one I might also, still, be looking for "the perfect house" because when they're short on the ground you can look forever.

So, if you're happy to pay that price for that house, then it's fine.

Snakey

Yes, if it's your home for life. You may want to consider some form of income protection insurance for the next couple of years just in case, so that you would not be forced to sell at a loss if it all went pear-shaped in the very near future. But my view is that in the long term property values are always going to go up - if only due to the effects of inflation.

Also, the effect of BTL is that properties are vanishing from circulation for 30-40 years (compared to a FTB who would put it back on the market after 2-5), which reduces supply of certain types of property still further. No doubt it will all even out over time, but right now it could be another couple of decades before the first wave of BTL landlords start to die off (and even then, their heirs may decide not to sell). Certainly in parts of central London I would not be surprised to see it end up like Manhatten where nearly everybody who lives there has to rent and you never see anything coming up for sale.

I paid £15k more than I thought this place was worth. At London prices it's a small percentage, and now I'm in here nobody can take it away from me as long as I can keep up with the mortgage.

My flat is not one-of-a-kind but it is (in my view) one of the best locations on the estate. Prices were going up by 15% a year in this postcode. I could grab this one at a price that made certain I would not be gazumped and the seller wouldn't pull out and remarket, or wait and hope that there'd be, I don't know, a sudden glut of identical properties so that all the other waiting buyers could have one each and there'd be less pressure on prices. As if.

Since my mortgage payments were only going to be about half what my rent was, I decided to get it over with so that I could carry on with my life. So far I'm glad I did.

When it comes to other people's opinions, you have to have the courage of your convictions. There's something about hearing about another person's negotiated price that brings out the Big Swinging Willy in so many people. No matter what decision you make there'll be people queueing up to tell you that you're an idiot and they would have got a much better deal by doing x, y and z.

I had that with this place. I turned round to someone in the end (just before I exchanged contracts) and said "alright then, you find me a better flat for this price in this postcode, and I'll buy that instead". I was expecting him to spend a morning trying to do just that, but he didn't even attempt it - so he never meant a word of what he was saying, he was just trying to make himself look good and me feel bad. What ya gonna do.

stator

Cyberman60 wrote: »

Not true. The reason they are going up is that buying is long-term a far better idea than renting and there is a shortage of housing due to many factors which cause demand for the product, not least unfettered immigration, low interest rates, the 'right to buy' and BTL/investment. :beer:

But if houses on a street go for £100k and someone pays £110k, someone has paid over the odds and house prices go up.
If every buyer looked and said "No house on this street has sold for more than £100k, I don't want to pay over the odds so I won't buy it" the house would remain on the market until the price dropped in line with other houses have sold for on that street.
If no-one paid over the odds, house prices wouldn't go up! It's impossible! For house prices to go up, someone has to take the first step upwards!

Pixie5740

I won't have much choice but to pay over the odds if I want to buy somewhere in Aberdeen. The properties are valued at £X and they are nearly always advertised as offers over £X with the vendor getting 10% to 15%, sometimes more over the valuation.

In the 2 years I've been keeping an eye on the Aberdeen market I've only ever seen 3 properties advertised at offers over a value less than the valuation given in the home report. So it sort of feels like you're starting off in negative equity which is one of the reasons I've continued renting. To pay an extra 15% I need to be sure that I'm going to be here long term.

questionss

We paid £2.5k over the surveyors valuation on a £238k house in 2006.
We sold in 2010 for £330k. We spent £40k on kitchen extension.
Am I glad we paid over the survey value... Undoubtedly!

Hoploz

Yes ... Because the market IMO tends to go up so if it is a rare find and otherwise you will potentially still be searching in a year's time when prices will be higher it is worth it to you.

I always buy properties for the long term, so as prices may go up and down a bit in the short term, the long term trend is always up.

I know that the potentially overpriced house I have just bought will be mine for at least 20 years, by which time I expect it will be worth double, so the odd 10% I have overpaid is neither here nor there. The valuation on a unique property (especially with a large % deposit) is less of a problem, I think, as it is harder to value precisely, and knowing there were 3 others bidding and willing to pay a similar price proves to the surveyor the agreed price is ok.

I am already counting my blessings as in the 6 months since I moved in prices have shot up and in any case nothing else suitable has come to market even at well over what I have paid.