How to know if you are paying fair price or overpaying on property

CSI_Yorkshire

Nice swerve .

Sarah1Mitty2

Did they dodge the overpriced house? I didn`t see their update.

Sunsaru

Despite some of the self proclaimed experts on here thinking they know better by throwing key words around trying to make themselves sound more knowledgeable than the rest, the only person who can decide the answer to your question is you. There is no hard and fast rule apart from don't do anything stupid.

MobileSaver

Sarah1Mitty2 said:

CSI_Yorkshire said:

There is no such thing as the absolute or correct value for a house, just like for almost everything else.

There is the value to a purchaser - above which they won't buy.
There is the value to a vendor - below which they won't sell.
There is the value to a mortgage company - which only needs to be enough to cover their capital.  Does that means a house on which you can't get a mortgage is actually worthless?  So should be traded for zero recompense?  Of course it doesn't.

I could buy a house for less than I think it is worth, but more than the vendor thinks it is worth.  Both would be pleased with that situation.  Does that mean that my value is wrong?  Or the seller's value is wrong?  Both? Neither?

they just tend to trade for the last sold price in the street/area, ... most people take their cues from ... what the house next door sold for.

Huh?!?! If houses "tend to trade for the last sold price in the street" then how do you explain prices rising significantly and consistently for the last decade?

CSI_Yorkshire

MobileSaver said:

Sarah1Mitty2 said:

CSI_Yorkshire said:

There is no such thing as the absolute or correct value for a house, just like for almost everything else.

There is the value to a purchaser - above which they won't buy.
There is the value to a vendor - below which they won't sell.
There is the value to a mortgage company - which only needs to be enough to cover their capital.  Does that means a house on which you can't get a mortgage is actually worthless?  So should be traded for zero recompense?  Of course it doesn't.

I could buy a house for less than I think it is worth, but more than the vendor thinks it is worth.  Both would be pleased with that situation.  Does that mean that my value is wrong?  Or the seller's value is wrong?  Both? Neither?

they just tend to trade for the last sold price in the street/area, ... most people take their cues from ... what the house next door sold for.

Huh?!?! If houses "tend to trade for the last sold price in the street" then how do you explain prices rising significantly and consistently for the last decade?

Maybe every single house was "very unique".

Sarah1Mitty2

MobileSaver said:

Sarah1Mitty2 said:

CSI_Yorkshire said:

There is no such thing as the absolute or correct value for a house, just like for almost everything else.

There is the value to a purchaser - above which they won't buy.
There is the value to a vendor - below which they won't sell.
There is the value to a mortgage company - which only needs to be enough to cover their capital.  Does that means a house on which you can't get a mortgage is actually worthless?  So should be traded for zero recompense?  Of course it doesn't.

I could buy a house for less than I think it is worth, but more than the vendor thinks it is worth.  Both would be pleased with that situation.  Does that mean that my value is wrong?  Or the seller's value is wrong?  Both? Neither?

they just tend to trade for the last sold price in the street/area, ... most people take their cues from ... what the house next door sold for.

Huh?!?! If houses "tend to trade for the last sold price in the street" then how do you explain prices rising significantly and consistently for the last decade?

Fear of missing out and demand to move house, the opposite happens on the way down, or are you claiming that prices will now just stay where they are as rates rise?

Sunsaru

Sarah1Mitty2 said:

MobileSaver said:

Sarah1Mitty2 said:

CSI_Yorkshire said:

There is no such thing as the absolute or correct value for a house, just like for almost everything else.

There is the value to a purchaser - above which they won't buy.
There is the value to a vendor - below which they won't sell.
There is the value to a mortgage company - which only needs to be enough to cover their capital.  Does that means a house on which you can't get a mortgage is actually worthless?  So should be traded for zero recompense?  Of course it doesn't.

I could buy a house for less than I think it is worth, but more than the vendor thinks it is worth.  Both would be pleased with that situation.  Does that mean that my value is wrong?  Or the seller's value is wrong?  Both? Neither?

they just tend to trade for the last sold price in the street/area, ... most people take their cues from ... what the house next door sold for.

Huh?!?! If houses "tend to trade for the last sold price in the street" then how do you explain prices rising significantly and consistently for the last decade?

Fear of missing out and demand to move house, the opposite happens on the way down, or are you claiming that prices will now just stay where they are as rates rise?

No one is saying that, but expecting things to go back to the levels of when you sold your house just so that you can right your own wrongs ain't gonna happen.

theartfullodger

Easy.  Buy, wait 5 or 10 years and you'll know.

Anything else is a gamble.

MobileSaver

Sarah1Mitty2 said:

MobileSaver said:

Sarah1Mitty2 said:

CSI_Yorkshire said:

There is no such thing as the absolute or correct value for a house, just like for almost everything else.

There is the value to a purchaser - above which they won't buy.
There is the value to a vendor - below which they won't sell.
There is the value to a mortgage company - which only needs to be enough to cover their capital.  Does that means a house on which you can't get a mortgage is actually worthless?  So should be traded for zero recompense?  Of course it doesn't.

I could buy a house for less than I think it is worth, but more than the vendor thinks it is worth.  Both would be pleased with that situation.  Does that mean that my value is wrong?  Or the seller's value is wrong?  Both? Neither?

they just tend to trade for the last sold price in the street/area, ... most people take their cues from ... what the house next door sold for.

Huh?!?! If houses "tend to trade for the last sold price in the street" then how do you explain prices rising significantly and consistently for the last decade?

Fear of missing out and demand to move house, the opposite happens on the way down,

OK, so you now accept that houses don't just trade for the last sold price in the street as you originally said but in fact houses trade at whatever price is agreed between a willing and able seller and a willing and able buyer, just as suggested by @CSI_Yorkshire ...

You do sometimes seem to have a complete lack of understanding of how the housing market works which does go some way to explain why you are still paying your landlord's mortgage some fourteen or more years after your disastrous decision to sell to rent.

Linton

Sarah1Mitty2 said:

pseudodox said:

As already stated a house is worth what someone is prepared to pay.  Just depends how much you want it or whether there is another house equally appealing at a more acceptable price.  Just don't pay over the odds if you are not planning to live there long term.  I paid almost 10% over the odds 20 years ago after a bidding war, but knew I would be staying put & I really saw no other house like it.

Sure enough the "market value" slumped well below what I paid within a few years.  Now it has climbed again & had got to almost double what I paid.  Now dropped back again from the high by maybe 5%.  But I never regretted the price I paid & as neighbouring houses rarely come on the market I was right in spotting something not exactly unique but with added value for me that was worth every penny.

If that was true there would be no such thing as a "down-valuation", a house is eventually worth what the banks and the prevailing sentiment say it is worth.

Disagree, the valuation to the bank is a purely commercial decision on their part.  It may or may not have a bearing on how a potential buyer values the house.  Of course if the potential buyer needs a mortgage then any down valuation by the bank may mean the potential buyer is no longer able to buy the house.  If the potential does not need a mortgage a bank's valuation is totally irrelevent.