Asking price offer

Thrugelmir

Ramouth said:

I won't bore everyone with the rest of the story - my point/question is: if nine people were happy to bid between £1k and £20k more than the asking price (with the majority of them bidding above £190k) does that mean that the house was originally undervalued, or that all these people were overbidding....?

Mxx

I have always been of the opinion that a house is worth what someone is willing to pay for it but the bank valuation is what the bank is confident of selling it for in the next few years. 

The buyers could default in a matter of months not years. The 3 financial D's.  Death, Distress (job or income loss) or Divorce. Arrears rapidly build and markets can move negatiively. Lenders have decades of data on which to base their lending decisions. Risk is priced. 

Ramouth

Thrugelmir said:

Ramouth said:

I won't bore everyone with the rest of the story - my point/question is: if nine people were happy to bid between £1k and £20k more than the asking price (with the majority of them bidding above £190k) does that mean that the house was originally undervalued, or that all these people were overbidding....?

Mxx

I have always been of the opinion that a house is worth what someone is willing to pay for it but the bank valuation is what the bank is confident of selling it for in the next few years. 

The buyers could default in a matter of months not years. The 3 financial D's.  Death, Distress (job or income loss) or Divorce. Arrears rapidly build and markets can move negatiively. Lenders have decades of data on which to base their lending decisions. Risk is priced. 

My point was that next few years were the important ones.  Agree that bad things can happen at any time - just think mortgage co is more worried if they happen when they own 95% of a house than 50% of a house.  Sorry OP we have got a bit off topic!