House Valuation Confused

sonub4ualt

Hi all,

We recently had our DIP agreed from Nationwide with 90%LTV. Saw a property and were about to put an offer. The askingprice is about 150k, but the online tool from L&C quoted the house is valued at 127k with lower limit of £112k and upper limit of 141k, similarly Zoopla estimates the property at 142k with lower of 130k and upper of £151k. The most recent similar size house was sold £142k in 2017 and another for £123k. The house is in good condition, except for some roof work, which needs to be redone.

We made an offer initially for £127k which was straightaway rejected by the EA, second for 131k which also got declined. The EA quoted they have an offer for asking price of £150k.

We quite like the property, but not sure if the lender undervalues the property where do we stand or what options do we have. We only have about 10-11% deposit ready, nothing else to cover on the other side.

Also, due to start new job soon, and my current tenancy ends Jul’18. Will have to move at any cost, as we are tired of paying someone else’s mortgage(rent).

Advice and suggestions are appreciated.

Many thanks
Sonu

anniecave

Do you know how to use the house price indices (for example Nationwide's) to work out current values based on previous sold prices? or if not you could try https://www.nationwide.co.uk/about/house-price-index/house-price-calculator

Are there other properties nearby similar that have sold? If you are only looking at the zoopla value for one property, that can be very misleading, you need to get a general idea of the market first.

sonub4ualt

Thanks anniecave,

I am unable to do a house price index calculation as there is no sold price recorded previously. I have done some research and the property types vary, like semi-detached or terraced. This is terraced 3 bed, similar property in same location was sold at £123k in 2016. This is the onlyinformation I could gather from the internet.

Sonu

anniecave

So at the same exact postcode (for example) are there any sold prices at all?

Have you done a right move search on properties within the postcode option with the "exclude sold subject to contract" option removed - so that you can also see any properties currently being sold and what they were being advertised for?

Have you looked at sold prices within 1/4 or 1/2 mile on right move? They will often include photos so you can see whether they are similar style or age of properties. You can get a general view of what properties sold for.

sonub4ualt

Most of the properties sold within 1/2 mile of the postcode suggest the average property price between £142-£160k depending on the type kf the property. I assume the area is sought after, but my reachable friends within the perimeter of the post code suggest dont go beyond £130 as they feel kt is overpriced.

Sparx

I wonder why the EA is entertaining you, if there is an apparent 'asking price offer of £150k'

Likely a bluff and they hope you will go all in...

mije1983

sonub4ualt wrote: »

Most of the properties sold within 1/2 mile of the postcode suggest the average property price between £142-£160k depending on the type kf the property. I assume the area is sought after, but my reachable friends within the perimeter of the post code suggest dont go beyond £130 as they feel kt is overpriced.

What have your friends based this assumption on if the facts tell a different story? It seems that properties are selling for between £140k-£160k, then the asking price is around the right place.

Having said that, if you don't believe the property is worth anymore than you have offered, and it's only worth as much as someone is willing to pay, then it's time to move on and leave the £150k bidder (real or not) to it.

sonub4ualt

Thanks mije1983,

We as buyers also feel that the asking price is reasonable, the only problem is as we are first time buyers, what if the lender undervalues the property by 10-20k. What will happen to our offer and do we have to pay any fees for withdrawing due to legal binding???

SG27

Sparx wrote: »

I wonder why the EA is entertaining you, if there is an apparent 'asking price offer of £150k'

Likely a bluff and they hope you will go all in...

Of course there isnt. Why would anyone decline an asking price offer?? Unless there is multiple offers in which case it would sealed bids!

leon103

I find those online valuation tools well out especially in rural areas or areas where there have been little sales.

Crashy_Time

Offer the lower limit, and stick to your guns.