House valuation

thegentleway

We've viewed a property advertised at £700k and have put an offer way over asking price because we really like it and it appears massively undervalued:
 - Zoopla values it at £872k, Mouseprice at £808k and Propertypriceadvice at £819k
 - #1 on that street sold for £720k in July 2016 which is basically the same property but with an extension to add a room between property and the double garage. The property we are offering on has a much larger garden and a small conservatory type extension (~1.5m) to dinning room at the back so I would have thought it would be valued higher.
 - Very similar properties on roads adjacent were advertised at £795k and £825k and went STC very quickly. They also had significantly smaller gardens but more modern kitchens/bathrooms. The £795k also had solar panels.

Everything points to the house being massively undervalued by the estate agent (including that we couldn't initially get a viewing as EA said they were up to capacity, about 20 viewings and another 20 prospective buyers on the waiting list) but can't help but feel reckless offering way over asking price so would be good to get other moneysavers point of view. Thank you.

user1977

thegentleway said:

 - Zoopla values it at £872k, Mouseprice at £808k and Propertypriceadvice at £819k

These are all meaningless. Please ignore them.

thegentleway

user1977 said:

thegentleway said:

 - Zoopla values it at £872k, Mouseprice at £808k and Propertypriceadvice at £819k

These are all meaningless. Please ignore them.

Thank you, how do you recommend estimating the property price?

K_S

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

user1977

thegentleway said:

user1977 said:

thegentleway said:

 - Zoopla values it at £872k, Mouseprice at £808k and Propertypriceadvice at £819k

These are all meaningless. Please ignore them.

Thank you, how do you recommend estimating the property price?

By doing the other stuff you appear to have done i.e. looking at evidence from comparable properties in the neighbourhood. That's how the surveyors do it.

The likes of Zoopla are just applying average price changes for a vast region to the last sale price, they're not taking anything local or specific to the property into account.

thegentleway

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

thegentleway

user1977 said:

thegentleway said:

user1977 said:

thegentleway said:

 - Zoopla values it at £872k, Mouseprice at £808k and Propertypriceadvice at £819k

These are all meaningless. Please ignore them.

Thank you, how do you recommend estimating the property price?

By doing the other stuff you appear to have done i.e. looking at evidence from comparable properties in the neighbourhood. That's how the surveyors do it.

The likes of Zoopla are just applying average price changes for a vast region to the last sale price, they're not taking anything local or specific to the property into account.

The 5 bed detached that have sold nearby are:
£800k in Jun 21
£681k in Jun 21
£710k in Oct 18
£700k in Oct 18
but they've all been extended and have smaller gardens

K_S

thegentleway said:

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

@thegentleway Personally I use a combination of Mouseprice, recent sold comparables and Nationwide indexation uplifts (if the comparables aren't particularly recent) to get an approximate value.

badger09

thegentleway said:

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

That’s impossible to say. 

The actual value of any property is what someone, who can afford to buy it, thinks it’s worth to them. If necessary, being able to fund any shortfall between that figure & what their lender thinks is it’s value. 

Those figures will vary between potential buyers, & may bear no relation to what the vendor thinks it’s value is. 

Sorry, I realise that’s not helpful but there simply is no single ‘actual value’. 

canaldumidi

Based on what you've said, the actual value is £763,998.

Now, supposing you buy it at your " offer way over asking price",will you spend the next 5 years kicking yourself for over-paying, or feel glad to have bought your home?

Or suppose you reduce your offer, and get outbid, will you be kicking yourself for not paying more and buying it?

steve866

badger09 said:

thegentleway said:

K_S said:

@thegentleway If it is genuinely undervalued (and I have anecdotally heard of EAs using this as a tactic to spark a bidding war), you can be pretty sure that the level of demand will ensure that the final accepted offer will be significantly higher than asking and closer to the actual value of the property.

Thank you. I'm pretty confident it will sell for significantly more that asking, just trying to work out what the actual value is.

That’s impossible to say. 

The actual value of any property is what someone, who can afford to buy it, thinks it’s worth to them. If necessary, being able to fund any shortfall between that figure & what their lender thinks is it’s value. 

Those figures will vary between potential buyers, & may bear no relation to what the vendor thinks it’s value is. 

Sorry, I realise that’s not helpful but there simply is no single ‘actual value’. 

Isn’t the ‘actual value’ what a surveyor / bank would value the property at, and anyone willing to pay over the odds is paying above the ‘actual value’?