Downvaluation (automated) by lender

ManuelG

I'm always nervy heading into valuation chat My own philosophy (honed by missing out on houses I wanted, and possibly overpaying on another!) is that it boils down to how much that particular house is important to you, can you afford it, and can you continue to afford it going forward?

If it's a home rather than an investment, it comes down to that. Sure, nobody wants to overpay, but you don't really know if you have unless somebody else buys it instead of you for less after you've pulled out, and then (obviously!) you don't own the house. If you're OK with the possibility of not owning it then sure, drive as hard a bargain as you like.

MobileSaver

Sunsaru said:

MobileSaver said:

Sarah1Mitty2 said:

RelievedSheff said:

nuhopper said:

lookstraightahead said:

Schwarzwald said:

nuhopper said:

Also to say the house is very much within our affordability with us being able to hold about 100k back for refurbs. I just don't want to pay £30k over the odds. We sold for a fair price after doing a lot of work to our house so I'd like to feel we got our next  house at a fair price too. I don't know if it's just London  but even as a chain free buyer it feels like the vendor/ agent are always out for a few more grand and it gets to this point in the sale and I get confused, uncertain, feel ripped off and want to walk away.

Nobody wants to pay £30k too much for anything

but you focusing a bit too much on this aspect, 812/780k is a 4% deviation between what you agreed and what a bank in the current climate conservatively estimates.

if you really liked something in a shop that you will use for many many years to come and it costs £104 instead of £100, would you let it go?

its a matter of perspective and in this price range you shld stop focusing on the 30k aspect but focus on the % deviation

I get your scenario, but if I could get it down the road for £4 cheaper I would do that. In fact, that's what everyone does in other scenarios, they tend to shop around. 

One brand of baked beans is so randomly expensive now that I don't buy them. The price has made me shop around for something equally as tasty and they've lost my business.

 It's the randomness that's the problem. And I think the housing market is like that. There's no logic or sense to asking prices, and it makes people question and feel uncomfortable.

There are people who will always not question and buy a brand of beans they're happy with, even if they pay more for no other reason than they're happy with that brand. This might just be habit or a load of other justifications. It depends how you are wired and your experiences.

If there was just one tin of beans for 20 miles and the price was more, I'd probably buy spaghetti.

You can apply this to big purchases, jobs, holidays, cars etc. 

It's this, it's my cold feet/ sense of being done over kicking in at the last minute, now for the second time in 3 months. It's a game I want to have a fighting chance at now in my middle age. I'm also aware this house needs a ton of work. Yes we can afford it although some will need to be long term. But it's the knowledge that there won't be a huge queue of people wanting this house that strongly tempts me into testing the seller and makes me feel "how dare you for not selling it cheaper to us". Bit stupid...

How long are you willing to wait for something else to come onto the market that you like?

A tin of beans is a very poor example to use. One tin of beans is exactly the same as another tin of beans a few doors down. But houses are not like that. Every house is individual. There is no "standard" asking price system because each property is so very unique.

The majority of housing in the UK isn`t "unique" in any way, there are millions of flats, new-builds and terraces, all built to more or less the same blueprint, most people buying will find something else if the seller is too difficult.

I think you and @lookstraightahead are very wrong on this, there are relatively few genuinely identical properties in the UK and an even smaller percentage are actually available to buy at any one time. Buying a home is nothing like buying a tin of beans.

Regardless, the OP is not interested in the majority of housing in the UK, they're interested in an £800k property in a particular part of London and as they say "other houses around have sold for much more but have been modernised and extended" so finding something else is much more difficult than you are claiming...

Dude, have you seen the rows of terraced houses in the northwest??

Yes, I used to live in one!

RelievedSheff said:

Sunsaru said:

MobileSaver said:

Sarah1Mitty2 said:

RelievedSheff said:

nuhopper said:

lookstraightahead said:

Schwarzwald said:

nuhopper said:

Also to say the house is very much within our affordability with us being able to hold about 100k back for refurbs. I just don't want to pay £30k over the odds. We sold for a fair price after doing a lot of work to our house so I'd like to feel we got our next  house at a fair price too. I don't know if it's just London  but even as a chain free buyer it feels like the vendor/ agent are always out for a few more grand and it gets to this point in the sale and I get confused, uncertain, feel ripped off and want to walk away.

Nobody wants to pay £30k too much for anything

but you focusing a bit too much on this aspect, 812/780k is a 4% deviation between what you agreed and what a bank in the current climate conservatively estimates.

if you really liked something in a shop that you will use for many many years to come and it costs £104 instead of £100, would you let it go?

its a matter of perspective and in this price range you shld stop focusing on the 30k aspect but focus on the % deviation

I get your scenario, but if I could get it down the road for £4 cheaper I would do that. In fact, that's what everyone does in other scenarios, they tend to shop around. 

One brand of baked beans is so randomly expensive now that I don't buy them. The price has made me shop around for something equally as tasty and they've lost my business.

 It's the randomness that's the problem. And I think the housing market is like that. There's no logic or sense to asking prices, and it makes people question and feel uncomfortable.

There are people who will always not question and buy a brand of beans they're happy with, even if they pay more for no other reason than they're happy with that brand. This might just be habit or a load of other justifications. It depends how you are wired and your experiences.

If there was just one tin of beans for 20 miles and the price was more, I'd probably buy spaghetti.

You can apply this to big purchases, jobs, holidays, cars etc. 

It's this, it's my cold feet/ sense of being done over kicking in at the last minute, now for the second time in 3 months. It's a game I want to have a fighting chance at now in my middle age. I'm also aware this house needs a ton of work. Yes we can afford it although some will need to be long term. But it's the knowledge that there won't be a huge queue of people wanting this house that strongly tempts me into testing the seller and makes me feel "how dare you for not selling it cheaper to us". Bit stupid...

How long are you willing to wait for something else to come onto the market that you like?

A tin of beans is a very poor example to use. One tin of beans is exactly the same as another tin of beans a few doors down. But houses are not like that. Every house is individual. There is no "standard" asking price system because each property is so very unique.

The majority of housing in the UK isn`t "unique" in any way, there are millions of flats, new-builds and terraces, all built to more or less the same blueprint, most people buying will find something else if the seller is too difficult.

I think you and @lookstraightahead are very wrong on this, there are relatively few genuinely identical properties in the UK and an even smaller percentage are actually available to buy at any one time. Buying a home is nothing like buying a tin of beans.

Regardless, the OP is not interested in the majority of housing in the UK, they're interested in an £800k property in a particular part of London and as they say "other houses around have sold for much more but have been modernised and extended" so finding something else is much more difficult than you are claiming...

Dude, have you seen the rows of terraced houses in the northwest??

Have you seen inside them?

They will all be different. They may have started out as identical properties when they were built but a succession of owners will have each put their own mark and stamp on them. Most will be remodelled inside, have had extensions, kitchens and bathrooms moved etc.

Even two one year old properties that were "out of the box" very similar (they wouldn't be exactly the same as they are on different plots) would be completely different after their first owners have lived with them for 12 months.

Exactly this! As a child I lived in one of seemingly identical rows of terraced houses but none were truly identical.

Straight away half were on the other side of the street so you'd get sun at the front or back differently and of course both end terraces were different to the middle ones as they had only one neighbour.

Ours had the loo outside in the yard, one neighbour was posher and had added an indoor loo while the other side neighbour had taken out an internal wall so you walked straight off the street into the lounge rather than into a hall. Yet others had extended the house to make extra rooms where our back yard was...

mi-key

That is a good point. There isn't really any such thing as overpaying for a used house. 

You only know exactly what your house is worth when you come to sell it. You may have paid £30K more than your next door neighour for the 'same' house, but if you sell 3 years after he does, and you get £50K more than he did, then have you overpaid? 

The only time it would happen is if there were two exactly comparable houses for sale at the same time, and you bought one then someone else bought the other for less than you, and that hardly ever happens.

lookstraightahead

My In laws lived in a terraced house where there were streets all the same. It didn't matter two hoots whether one had bells and whistles they are all valued similarly (actually floor space was the biggest indicator of price, new kitchens etc made no difference).
People make their own stamp and then the next people do the same. 

Of course there are a lot of similar properties.
New builds are also a great example. 

MobileSaver

MobileSaver said:

Ours had the loo outside in the yard, one neighbour was posher and had added an indoor loo while the other side neighbour had taken out an internal wall so you walked straight off the street into the lounge rather than into a hall. Yet others had extended the house to make extra rooms where our back yard was...

Thinking on this further, it may have been us that added an internal wall so you didn't walk straight into the lounge - we're talking forty plus years ago when I was perhaps 10 so my memory is a little fuzzy!

Similarly if I went back there today I bet some still have open fires while many will now have central heating, some may have solar panels, some may have had complete rewires and RCD consumer units added others will still have old plug in cartridge style fuse boxes. Some will have a wet room, others just a bath, some only a shower.

The list goes on as to why none of them are truly identical and some or all of the above will be reasons why some people would go for a particular property while others would avoid a particular property like the plague.

As I said earlier, add in that at any one time only a tiny number in a particular street/area will actually be available to buy and the fantasy that you can just choose another identical property instead really doesn't stand up to scrutiny.

lookstraightahead

Op, the bottom line is don't overpay out of fear or panic. Don't spend more than you're happy spending, for whatever reason. Only you can be the judge of what you're comfortable with, but spend because it's your choice, not because there is no other choice. 

Despite what people say there is always another choice. Otherwise no one would ever move as houses come on and off the market all the time.

Then you don't ever need to justify your decision .

user1977

RelievedSheff said:

nuhopper said:

lookstraightahead said:

Schwarzwald said:

nuhopper said:

Also to say the house is very much within our affordability with us being able to hold about 100k back for refurbs. I just don't want to pay £30k over the odds. We sold for a fair price after doing a lot of work to our house so I'd like to feel we got our next  house at a fair price too. I don't know if it's just London  but even as a chain free buyer it feels like the vendor/ agent are always out for a few more grand and it gets to this point in the sale and I get confused, uncertain, feel ripped off and want to walk away.

Nobody wants to pay £30k too much for anything

but you focusing a bit too much on this aspect, 812/780k is a 4% deviation between what you agreed and what a bank in the current climate conservatively estimates.

if you really liked something in a shop that you will use for many many years to come and it costs £104 instead of £100, would you let it go?

its a matter of perspective and in this price range you shld stop focusing on the 30k aspect but focus on the % deviation

I get your scenario, but if I could get it down the road for £4 cheaper I would do that. In fact, that's what everyone does in other scenarios, they tend to shop around. 

One brand of baked beans is so randomly expensive now that I don't buy them. The price has made me shop around for something equally as tasty and they've lost my business.

 It's the randomness that's the problem. And I think the housing market is like that. There's no logic or sense to asking prices, and it makes people question and feel uncomfortable.

There are people who will always not question and buy a brand of beans they're happy with, even if they pay more for no other reason than they're happy with that brand. This might just be habit or a load of other justifications. It depends how you are wired and your experiences.

If there was just one tin of beans for 20 miles and the price was more, I'd probably buy spaghetti.

You can apply this to big purchases, jobs, holidays, cars etc. 

It's this, it's my cold feet/ sense of being done over kicking in at the last minute, now for the second time in 3 months. It's a game I want to have a fighting chance at now in my middle age. I'm also aware this house needs a ton of work. Yes we can afford it although some will need to be long term. But it's the knowledge that there won't be a huge queue of people wanting this house that strongly tempts me into testing the seller and makes me feel "how dare you for not selling it cheaper to us". Bit stupid...

How long are you willing to wait for something else to come onto the market that you like?

A tin of beans is a very poor example to use. One tin of beans is exactly the same as another tin of beans a few doors down. But houses are not like that. Every house is individual. There is no "standard" asking price system because each property is so very unique.

And even if they are all identical tins of beans, it's a market in which you negotiate the price you're paying for the beans without knowing for sure what anybody else is currently paying for beans, but you do know what people were offering for beans about 6-12 months ago.

newsgroupmonkey_

Agree with what the other person said above about buying a house over a home.

The only people generally that are heavily impacted by house prices going up or down are either FTBs or those coming out of the market. For the latter, you could come out "Crashy" style and never get back on, so it could heavily impact you.

Ultimately, we bought a house at almost the top of the market (last April). But we also sold one at the same time.
So yes, this might be worth as much as 10% less. But then so was the house we sold.

Do we care? Absolutely not. We made nearly 30% profit on the house we had bought 2 years previously.

Not to mention, we pay about the same in mortgage as we did for the rent we'd previously paid on a smaller, less desirable (in our opinion) place. We had 90% LTV.

Ultimately, even if somehow we end up in proper negative equity (which is highly unlikely, because we're only on a 15 year mortgage), we really don't care. Because we love our house and its location.

nuhopper

Thanks all for your views. 
I think what frightens me is the work this house and its garden needs, even though one week ago I felt excited and invigorated by it all, and I consider our Reno budget to be a decent one and the house a long term project.

It's classic cold feet time. I have asked the broker for a manual valuation from the bank which puts a hard credit search on but it doesn't matter as we haven't had one for a while.

As we are chain free and not in an urgent rush (but definitely need a house soon) why not see if we can get some money off or at least have assurance of the asking price. I can't help feeling a bit indignant about how the seller has refused to discount the house at all except by 3,5k when the fence alone was quoted 6k to repair (it's about 30m.long).

mi-key

nuhopper said:

Thanks all for your views. 
I think what frightens me is the work this house and its garden needs, even though one week ago I felt excited and invigorated by it all, and I consider our Reno budget to be a decent one and the house a long term project.

It's classic cold feet time. I have asked the broker for a manual valuation from the bank which puts a hard credit search on but it doesn't matter as we haven't had one for a while.

As we are chain free and not in an urgent rush (but definitely need a house soon) why not see if we can get some money off or at least have assurance of the asking price. I can't help feeling a bit indignant about how the seller has refused to discount the house at all except by 3,5k when the fence alone was quoted 6k to repair (it's about 30m.long).

I'm not surprised.The house is being sold as needing renovation. What would the seller benefit from it having a new fence?