So we've found a house but I need help.....

AllThatJazz_2

I'll try to give as much info as poss.

Combined salaries of 67000
Jobs since July 2006 and October 2001

The house we have seen has an asking price of 239950 South Hampshire
2 double beds (1 ensuite) and a good sized single
very large garden
desirable area
seperate kitchen, dining room and lounge
conservatory

We only have a deposit of £8500 because we've spent the past 3 years paying off debt from previous young silly spending, so I want to take into consideration how much we will be borrowing in my offer.

The only problem I have is....how much do I offer?

The owner is a single male, he has smoked throughout the house so before we start we'll need to decorate the whole place. The current decor is so unfinished we can't even just clean, for example very cheap laminate in the lounge with no beading or cork at the edges, it's rising and (yes I smelt it) has absorbed the smell of smoke. There are too many things to list here but it gets worse.

He bought it in July 2001 for £144,950 so is obviously keen to make a profit but when he has done nothing to it but live in it and replace any existing life in the property with half hearted adjustments what can they expect?

I know I might annoy some people who are currently selling but I would really appreciate honest and constructive feedback.

Thanks in advance for your help :xmassmile

PasturesNew

AllThatJazz wrote: »

... asking price of 239950 ... He bought it in July 2001 for £144,950 so is obviously keen to make a profit but when he has done nothing to it but live in it and replace any existing life in the property with half hearted adjustments what can they expect?

How much he paid for it and how much it is on the market for today are not directly related.

How do you know he's done nothing to it except live in it?

I bought a house about the same time as he did. If he added a mark-up the same as I did (I sold mine recently) then his would be on the market for £422k.

What IS important is:
- What have similar houses to his sold for recently?
- What are others asking?
- How is your local market performing?
- How much do you want this house?

The problems you've described are cosmetic and the EA will have taken those into account when suggesting an asking price.

AllThatJazz_2

Thanks for replying so quickly.

I forgot to mention that there is another house on the same street that has a lovely condition inside but a smaller garden which is available for less - £225000

I have had a look and to get this house to the same standard would cost us between 10K - 15K but it has a larger garden. How much do the two weight up:

House 1 - £239950
Large Garden will have to spend say 15K

House 2 - £225000
Medium Garden no spend

Both have exactly the same layout inside, house 2 has a new kitchen, new carpets etc

Generali

I'd be looking at something like 10-15% below that for an intial offer FWIW. Have you checked the Land Registry to see what similar houses have sold for rather than how much the asking price was?

hollydays

Generali wrote: »

I'd be looking at something like 10-15% below that for an intial offer FWIW. Have you checked the Land Registry to see what similar houses have sold for rather than how much the asking price was?

www.houseprices.co.uk

Nenen

I'm sure other posters are correct in their advice that it is what other houses locally are now selling for now that is the major thing to look at. However, out of interest, if you go to this site:

http://www.hbosplc.com/economy/HousePriceCalculator.asp

It allows you to put in a price paid in any particular quarter of a given year in an approximate area and it tells you what the average price rise has been and what it *should* now be worth. Obviously, like all these kind of sites, it is not an exact science and there are many factors to take into consideration. In the past, MSEers have reported varying degrees of accuracy using this method. I put in the figures you've quoted and got the following:

"An average house, in the South East region valued at £144950 in 2001 Q3 would be worth £262500 in 2007 Q3.

A change of 81.1 percent."

Therefore, if that is anywhere near correct (and remember it could be WAY out) the house you've seen is a bargain even with all the work needing to be done!

Has the property been on the market for very long? If it has, depending upon how keen he is to sell, the owner might be prepared to take a significant drop. If it has only just been put up for sale then, in my experience, he is much less likely to do so. Depending upon how much you like the property, I'd be inclined to offer somewhere between 205-220K to start with.

Having said that, and without wishing to turn this into another 'house price crash' debate, in your situation, unless you absolutely adore the house, can easily afford the mortgage and intend to remain living there for at least 5-10 years (so that should a crash happen negative equity won't affect you) I would consider holding on until the situation for hosue prices looks more certain in the new year. If prices do fall, as many are predicting, then you will be able to buy a better house for less and not be too stretched.
HTH... good luck

Generali

Good points Nenen.

OP - don't forget that the house price calculator and land registry will be backward looking indicators. You need to take current mkt conditions into account too. On that basis, I'd offer on the low side.

PasturesNew

If the OP could post the first three characters of the postcode, opinions closer to the local marketplace might be more forthcoming.

Just a thought.

The above-linked calculator said the house I bought/sold had a value £60k less than my selling price.

Running_Horse

I'm no HPC cheerleader, but are you sure this is the best time to be buying such an expensive house with a small deposit and high income multiple? Oh, and previous and local prices have nothing to do with whatever price you two do (or don't) agree. Offer less than what you think it is worth, and work your way up.

Mozette

Try an offer around 20% less than the AP, gauge the reaction and go from there...

gallygirl

AllThatJazz wrote: »

House 1 - £239950
Large Garden will have to spend say 15K

House 2 - £225000
Medium Garden no spend

Both have exactly the same layout inside, house 2 has a new kitchen, new carpets etc

So you're basically looking at paying 30k for a large garden? Is it worth that much to you?