FTB how much to offer

cluelessoncanvey

Is there a guide on here to how much various Estate Agents over-inflate the prices of houses they put up for sale, my sister told me yesterday that Bairstow Eves put about 20% on top of what its worth. Thought their should be a guide to the various Estate Agents to know how much to offer on a property depending on which company has advertised it.

Abbotts rang me friday to say I should look at property upto 140K even though my max is 125K, is this generally good advice or indicative of how over inflated their prices are?

What confuses me on this is surely your valuation would tell you if it's too expensive and then from what I understand you can knock down your offer in line with that evaluation (but I suppose they may then withdraw from selling it to you, and people maybe hoping you get a bad evaluator; but then how much is it a science and how much just down to the valuators personal judgement).

Hoploz

I don't think any agent would put things up by 20% as they would never sell anything.

Hoploz

If you do a search on Rightmove for sold stc properties you will probably find some of them have already gone through and appear on the Sold listings. You could compare to get an idea how asking prices relate to sold prices. I'd be surprised if there's as much as 10% difference let alone 20% but every sale depends on the personal circumstances in the chain and there are no rules.

lessonlearned

As Joplin says there are no hard and fast rules. It will all depend on how hit the market is where you live, how desirable the property is, whether or not the seller is sufficiently motivated for a quick sale or whether they are just dipping their toe in the water.

You just need to do some homework.....trawl through Rightmove for comparables, sold prices etc

ReadingTim

Given the Rightmove search criteria have options of £125k, £130k, £140k, I'd suggest that £140k is a good upper limit - you won't necessarily get someone asking £140k accepting £125, but someone asking £132k might accept £125k, and you might not have even seen the place if you cut off at the £130k search. Just a thought....

Rosetinted

I'm looking for properties listed for up to 10% over my maximum budget and that seems to work. You have to remember that something's only worth what someone will buy it for, so asking prices are always an estimate.

Also, the EA doesn't decide the listing price, the seller does - they can choose to ignore the EA and put it on the market for more or less than recommended. For example, my family just sold a probate property. Five different EAs competing for the chance to sell it came up with the following prices: 310, 325, 325, 330 and 350. We researched the area a lot and then listed for 350 and it sold for 360 (and we had another buyer offering 359), so four out of the five were more than 30 grand off with their valuation.

The only way to really understand what properties in your area are worth is to do the legwork yourself. Get seriously stuck in to reviewing the sold prices for houses of the size and style you want. Also, get out there and view, view, view! You start to get a much better idea of what you do and don't get for your money when you view some houses at, above and below your price point. The only way to really make an informed decision about what to offer is to get to know the market.

King_Slayer

Hi Cluelessoncanvey,

I used sites like http://www.mouseprice.com , http://m.nethouseprices.com/?redirect=true and http://houseprices.landregistry.gov.uk to get an idea of what prices houses within that area have recently sold for, in order to determine what will be a fair offer. Also taking into consideration my budget and the amount of work completed/required to the property, however I would recommend that your offer be subject to valuation and survey as you never know what may be highlighted in the Report.:)

cluelessoncanvey

Thanks for some great replies. Alas the price range I am looknig at in my area so far I've only seen what I want have low leaseholds, starting to wonder if it matters, whether its getting the property I want (2 bed) at a low enough price that I can afford, and if I pay the £10-20K to get the leasehold renewed at a later date, I assume it will put the value of the property up by a similar amount? If so assuming I can get a load or remortgage to get the money it's a doable proposition.

Although I have only been watching the market 1 month, not sure that's enough time to judge it yet. Woudl like to start viewing so perhaps I should on some of the dearer properties (the one that came up the other day had a second bedroom of 6ft X 7ft, so didn't bother enquiring further)

Hoploz

The issue with short leases is that mortgage companies like there to be something like 30 years minimum remaining after the term of the mortgage, so if you have a 25 year mortgage it needs a minimum of 55 years left. But normally they will want more - the longer the better, and the easier you will get a mortgage. Something with a short lease will be cheaper in lieu of having to purchase the lease extension. But you could only buy it without a mortgage. And when you come to sell it'll be hard to find a buyer.

Leases can be renewed/lengthened, but only by someone who has been with the landlord (freeholder) for two years, so it's normally something you ask a vendor to get started with when you are buying.

Also bear in mind, the shorter the lease, the more it will cost to extend. For example, I investigated a property with a 47 year lease, and the renewal was going to be around £23k. Previously I investigated a different case (although about 15 years ago admittedly) with a 63 year lease, it was only going to be about £7k. More manageable and worth considering.

eawest29

Apart from all the good advice above I would also suggest your initial offer is less than what you are actually prepared to pay as inevitably the estate agent will try and get more out of you - if the seller does then start to negotiate you might end up getting the property for what you are actually prepared to pay - the other stance is to say you are offering 'x' and that is your best offer (ie no room for negotiation) The other thing you can stress that as a FTB there is no chain on your side (although you do need to have your mortgage promise sorted)

ethank

I don't see the point of buying a leasehold house.