Would you buy an "overpriced" house

J_i_m

I doubt I could afford to buy an 'over priced' house to be honest.

Rollinghills

I was a bit worried the house we are buying is a bit overpriced. But it is the only one my husband liked and we've seen many.
2 months after we started negotiations zoopla estimate on it is up by 20k and nothing comparable has come onto the market even if we were to pay 50k more. That makes me more relaxed. But who knows what will happen next year.

Mrs_Soup

A house is like artwork- worth what someone is willing to pay to own it. So long as you won't end up in negative equity and you will be happy living there its not overpriced.

StumpyPumpy

There is a largish housing development (built in the 1980's) quite near us that works as a very good indicator of the local market. Their format is consistent and comprises of 1,2 & 3 beds and there is enough so that there are normally one or two on the market at any given time which are quickly sold. So, out of pure noseyness we tend to keep an eye on them.

Just before Christmas last year one sold for a full 20% over the highest price any other had ever reached and even crossed over an SDLT band. We thought the buyer was mad, quite frankly. Now, 4 months later, the properties that are coming up for sale are listed at a similar premium, and seem to be selling as quickly as before.

My point is this: Valuations are based on the going rate and there is usually a very small pool of recent examples to assess what the going rate is. If you buy a house with (say) a 20% reduction then that price filters down to the market, potentially reducing the valuation of other houses in the area (including yours) If, on the other hand you pay 20% more than the current valuation, you could well just be a trend setter and the market will quickly catch you up.

But in any event, all this is smoke and mirrors. The important part of the transaction is not what an Estate Agent randomly allocates as a value, it is what value you do. The bottom line is that whilst we all like a bargain, if a house is worth the money to you, you can afford to buy and you want to buy it then it doesn't matter how much anyone else thinks it is worth. Only people who are more concerned with bragging rights than reality go on about how much they saved buying a house or made selling it, other people just get on with the business of living in it.

SP

SuzieSue

Yes, if I intended to keep it for the long term.

System

I'd rather live somewhere I like that is overpriced than somewhere I don't like but is value for money so yes I would overpay

Mickygg

Rollinghills wrote: »

I was a bit worried the house we are buying is a bit overpriced. But it is the only one my husband liked and we've seen many.
2 months after we started negotiations zoopla estimate on it is up by 20k and nothing comparable has come onto the market even if we were to pay 50k more. That makes me more relaxed. But who knows what will happen next year.

You are using zoopla for valuation guidance. I wonder when zoopla last went round to value that particular house.

Rollinghills

Mickygg wrote: »

You are using zoopla for valuation guidance. I wonder when zoopla last went round to value that particular house.

No of course I'm not using zoopla valuation as a valuation. The price we are paying is very different from it. But month on month change in zoopla valuation is a proxy for house price increases in the area.

Mickygg

Rollinghills wrote: »

No of course I'm not using zoopla valuation as a valuation. The price we are paying is very different from it. But month on month change in zoopla valuation is a proxy for house price increases in the area.

So my original statement is correct, you are using zoopla for valuation guidance.

Justcoll

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.)

Reading your first paragraph I am wondering if it was your surveyor who valued the property at less than you are paying?

We are in the process of buying a house for which we are paying full asking price. Our surveyor said we were paying too much and when I asked why, he said that he took into account two other properties; one a lot further down the road sold a year ago and another currently showing on Rightmove but SSTC at 20k less and about a quarter of a mile away. He informed me it was of similar size but admitted it was on a very busy main road.

I told him that we had viewed that property a few weeks before and that the property was in fact a lot smaller. After the viewing we had shown the online photos to a builder friend who estimated that it would cost at least 15k to extend it and that was without the cost of installing a kitchen etc. The garden was a lot smaller and because it didn't back onto other gardens was easily accessible to anyone. We offered FAP but it went to someone else. If we hadn't viewed that property we would have been far more influenced by the surveyor's comments.

We have been looking on Rightmove for months and there is a real dearth of new properties coming on the market. Most go on the first day and some are even already marked as 'sold STC'. It's a sellers' market (IMO) so if you have found something you love, I would say 'go for it' as long as the survey doesn't show serious defects.