Am I Overpaying?

silvercar

bobster2 said:

Herzlos said:

What they paid for it is irrevelant, what's it worth now is important. 

Is it worth that to you now? How long are you willing to wait for another one coming up for sale in the hope that (a) it's cheaper and (b) you manage to buy it?

Will you care that you overpaid a bit in 10,20,30 years time?

I agree that what the current owners paid is not the critical factor - but it does have some relevance. It provides information on how others valued the property.

And I reckon I've found the house on Rightmove. The other largely identical houses in the terrace sold for £170k, £172k, £163k, and £175k in 2018. Presumably the year the development was completed.

So this clearly shows that the current owners did not get a special deal out of line with the market in 2018.

None of the terraced houses have sold since. However, a detached house in the development sold in 2022 at a price 31% above it's 2018 price. In line with the NW house price index which projected a 33% gain 2018-2022.

So there is no evidence to support the idea that this street is showing gains way ahead of the regional trend.

The difference between the agreed price and a simple projection based on the past sale is not just "a bit". OP is stretching themselves to the limit (see their other threads about getting a mortgage) and planning to pay 20% over the house price index projection.

At that time the developer may have been keen to close their sales office and move on to their next project. It may have been that with 4 to sell, the prices needed to be that much lower to sell quickly.

On a separate point, do check carefully that both parking spaces are on the deeds.

Slinky

bobster2 said:

GrubbyGirl_2 said:

why are you worried that your neighbour will sell their house for £15k less than the price you paid for yours?  If you buy for £285k that's the baseline estate agents will use to value any other houses in that block to come up for sale.  Also, if you're planning on staying there then over time the only way is up.

I am not crashy - and generally disagree with him.

But the idea of choosing to pay a higher price to set a new baseline for the street is just daft!!

We paid £425K for our house which was up for offers over £395K as there was a bunfight for it.  It set the new ceiling for houses in the street, 4 years later the same style house 2 doors down from us went for £650K when there was a bunfight for that one too. There's had been modernised a bit more than ours, but even so, that extra £30K over asking we paid doesn't really seem much anymore. 

The idea that there's a ceiling price for a street and it never goes up is just daft!!

To me it sounds as though the type of house the OP wants is in short supply in his area and is therefore likely to cost more because of it.

BikingBud

Herzlos said:

What they paid for it is irrevelant, what's it worth now is important. 

Is it worth that to you now? How long are you willing to wait for another one coming up for sale in the hope that (a) it's cheaper and (b) you manage to buy it?

Will you care that you overpaid a bit in 10,20,30 years time?

But it is not a bit is it?

If it's cost you somewhere in the region of 60k increased purchase price and interest payable then yes absolutely. 

Herzlos

BikingBud said:

Herzlos said:

What they paid for it is irrevelant, what's it worth now is important. 

Is it worth that to you now? How long are you willing to wait for another one coming up for sale in the hope that (a) it's cheaper and (b) you manage to buy it?

Will you care that you overpaid a bit in 10,20,30 years time?

But it is not a bit is it?

If it's cost you somewhere in the region of 60k increased purchase price and interest payable then yes absolutely. 

It's a big bit sure, but we don't know what it's actually valued at or how much other interest there is in it. 

It's 25% over what Zoopla predicts it to be, but Zoopla isn't known for being accurate.  We don't know much about the house in terms of value add but we know that the OP thinks it's perfect for them. 

So the same applies. Is it worth the asking price to the OP? Will the OP be more likely to regret buying it or regret not buying it?

I overpaid on my current house (albeit by £20k) because it was perfect, and in the 2 years we've been here not a single other house on the wider estate has come up for sale since. So who knows how long I'd need to wait, if another house is as good (we're in the biggest model) and how much the prices would have gone up by then. 
Will I care in another 20 years what I paid for it? Nah.

ReadySteadyPop

BikingBud said:

Herzlos said:

What they paid for it is irrevelant, what's it worth now is important. 

Is it worth that to you now? How long are you willing to wait for another one coming up for sale in the hope that (a) it's cheaper and (b) you manage to buy it?

Will you care that you overpaid a bit in 10,20,30 years time?

But it is not a bit is it?

If it's cost you somewhere in the region of 60k increased purchase price and interest payable then yes absolutely. 

It is a bit over the term of the mortgage debt with interest, but if the OP is paying cash I suppose they don`t need to worry about things like that and lender`s valuations?

pinkshoes

@FrancisBegbie you need to think about this differently. 

1. If you're not selling the value is irrelevant. If you plan to live there forever then that's fine. 

2. Assuming you need a mortgage, then your lender will value it and decide what they'll lend against it. Unless you have a huge deposit,  if the lender values it much lower then you'll need to match the difference by increasing your deposit or lower your offer.

You can always pull out of the sale further down the line if you think the price is too high.