Am I Overpaying?

BikingBud

Herzlos said:

ReadySteadyPop said:

For most people now it is about borrowing costs, the monthly debt payment on the mortgage, that dictates what they can buy, not necessarily what they "want".

Irrelevant. OP can already afford the asking price, so it's not an issue. 

Please stop trying to derail threads. 

And this is the misconception that underpins that current state of the economy. Everybody paying more than they need to, borrowing ever more money on the never never.

ReadySteadyPop

Herzlos said:

ReadySteadyPop said:

For most people now it is about borrowing costs, the monthly debt payment on the mortgage, that dictates what they can buy, not necessarily what they "want".

Irrelevant. OP can already afford the asking price, so it's not an issue. 

Please stop trying to derail threads. 

It is an issue when they try to sell, and as they are concerned about "overpaying" it is very relevant.

ReadySteadyPop

BikingBud said:

Herzlos said:

ReadySteadyPop said:

For most people now it is about borrowing costs, the monthly debt payment on the mortgage, that dictates what they can buy, not necessarily what they "want".

Irrelevant. OP can already afford the asking price, so it's not an issue. 

Please stop trying to derail threads. 

And this is the misconception that underpins that current state of the economy. Everybody paying more than they need to, borrowing ever more money on the never never.

Exactly, the OP is wise to this though and doesn`t want to do it if they can help it.

Herzlos

BikingBud said:

Herzlos said:

ReadySteadyPop said:

For most people now it is about borrowing costs, the monthly debt payment on the mortgage, that dictates what they can buy, not necessarily what they "want".

Irrelevant. OP can already afford the asking price, so it's not an issue. 

Please stop trying to derail threads. 

And this is the misconception that underpins that current state of the economy. Everybody paying more than they need to, borrowing ever more money on the never never.

For unnecessary luxury stuff I agree with you; people shouldn't be up to their eyeballs in debt for a £1500 phone or a £60k car to impress the neighbours. 

But I think housing and this case in particular are different, because the dynamic isn't quite the same given the largely unique nature of houses and unpredictable supply. We also don't know if the house is strictly overpriced and by how much. 

So the OP is left with a dilemma that we can't solve for them. Given the house seems perfect for them, they don't come up often and house prices are trending up, do they:

A. Pay a little bit above what Zoopla predicts the value to be, move in and enjoy their new home knowing that the longer they stay the lesser the overpayment feels

or

B. Withdraw their offer and wait to see if the price gets reduced for them to buy at the lower figure. Which may be rejected given they will be viewed as a timewaster. 

or

C. Withdraw their offer and wait to see if another house comes up that hits their criteria and hope the prices haven't gone up in the mean time?

IMHO it's all a gamble but A is the safest one and gets them in their ideal house earliest. Given they are looking then it means that their existing living arrangement isn't ideal is some capacity though we don't really need to know the details there.

For B and C there's a possibility they'll wait years and pay more anyway. It may also mean that an even better house comes up. 

BikingBud

I feel that this is where exploring the long term impacts of house price inflation upon reduced life long income leading to reduced pension provision and coupled with the increased tax take, SDLT and now IHT should be allowed but..........

TheJP

Albermarle said:

TheJP said:

Bigphil1474 said:

OP, if you get a L2 survey done, it'll give you a guide price, as will your mortgage application. If either are way below what you are paying, you have your answer. Banks will only lend if they can get their money back if you default. 

Only if you pay extra for the valuation on a L2 survey.

Although if you have an informal chat with the surveyor after the survey, which often happens, they well be wiling to give you a verbal indication of their opinion.( if you ask nicely) .

And if you then want to re-negotiate the price you have nothing to back up the argument, if you pay the additional fee for the valuation you have something in writing from a professional to back up your claims.

ReadySteadyPop

TheJP said:

Albermarle said:

TheJP said:

Bigphil1474 said:

OP, if you get a L2 survey done, it'll give you a guide price, as will your mortgage application. If either are way below what you are paying, you have your answer. Banks will only lend if they can get their money back if you default. 

Only if you pay extra for the valuation on a L2 survey.

Although if you have an informal chat with the surveyor after the survey, which often happens, they well be wiling to give you a verbal indication of their opinion.( if you ask nicely) .

And if you then want to re-negotiate the price you have nothing to back up the argument, if you pay the additional fee for the valuation you have something in writing from a professional to back up your claims.

Yes, good move, then the seller understands that they will likely be hearing the same story from everyone that is interested in the house.

ReadySteadyPop

Herzlos said:

BikingBud said:

Herzlos said:

ReadySteadyPop said:

For most people now it is about borrowing costs, the monthly debt payment on the mortgage, that dictates what they can buy, not necessarily what they "want".

Irrelevant. OP can already afford the asking price, so it's not an issue. 

Please stop trying to derail threads. 

And this is the misconception that underpins that current state of the economy. Everybody paying more than they need to, borrowing ever more money on the never never.

For unnecessary luxury stuff I agree with you; people shouldn't be up to their eyeballs in debt for a £1500 phone or a £60k car to impress the neighbours. 

But I think housing and this case in particular are different, because the dynamic isn't quite the same given the largely unique nature of houses and unpredictable supply. We also don't know if the house is strictly overpriced and by how much. 

So the OP is left with a dilemma that we can't solve for them. Given the house seems perfect for them, they don't come up often and house prices are trending up, do they:

A. Pay a little bit above what Zoopla predicts the value to be, move in and enjoy their new home knowing that the longer they stay the lesser the overpayment feels

or

B. Withdraw their offer and wait to see if the price gets reduced for them to buy at the lower figure. Which may be rejected given they will be viewed as a timewaster. 

or

C. Withdraw their offer and wait to see if another house comes up that hits their criteria and hope the prices haven't gone up in the mean time?

IMHO it's all a gamble but A is the safest one and gets them in their ideal house earliest. Given they are looking then it means that their existing living arrangement isn't ideal is some capacity though we don't really need to know the details there.

For B and C there's a possibility they'll wait years and pay more anyway. It may also mean that an even better house comes up. 

Most houses are not very unique and there is over-supply and falling demand in more areas than just London now, the larger the price of the item bought with debt the larger the risk you are taking, a flash car to stick in the drive might be 60k but the house or flat attached to the drive could be 600k! Very risky debt in a volatile rates environment.

Herzlos

ReadySteadyPop said:

Most houses are not very unique and there is over-supply and falling demand in more areas than just London now, the larger the price of the item bought with debt the larger the risk you are taking, a flash car to stick in the drive might be 60k but the house or flat attached to the drive could be 600k! Very risky debt in a volatile rates environment.

It depends on what you're looking for in a house. For a new build the only things likely to differ house to house are plot location and plot shape. An end plot or a bigger garden may be a big plus. 

Once houses get older and have been extended and renovated the buildings themselves differ. For example, my house was identical to my neighbours when it was build 50 years ago but they differ quite drastically now. 

Then there's the availaibility of houses. In any given town/city there are only maybe a few dozen houses for sale and that reduces the stricter the criteria is. Narrow that down to a particular estate or part of town you may find that houses only come up every few years. For example, it seems to be approx every 2 years or so a house in my immediate area comes up for sale.

Of course, if you're just looking for something vague like "A house with 2 bedrooms" they aren't that unique. 
But if you want a 3 bedroom with a souther facing garden and double driveway in a quiet estate that's within 2 miles of a train station, your options become a lot more limited. 

If there was an abundance of houses that met the OP's criteria in that area, they probably wouldn't have bid on this one, no?

Herzlos

TheJP said:

Albermarle said:

TheJP said:

Bigphil1474 said:

OP, if you get a L2 survey done, it'll give you a guide price, as will your mortgage application. If either are way below what you are paying, you have your answer. Banks will only lend if they can get their money back if you default. 

Only if you pay extra for the valuation on a L2 survey.

Although if you have an informal chat with the surveyor after the survey, which often happens, they well be wiling to give you a verbal indication of their opinion.( if you ask nicely) .

And if you then want to re-negotiate the price you have nothing to back up the argument, if you pay the additional fee for the valuation you have something in writing from a professional to back up your claims.

This may be worth doing anyway; it may highlight problems with mortgages if it's valued lower, or it may puts the OP's mind at ease that the accepted price is closer to the real valuation.