Price adjustment for smaller homes

jake_jones99

Chief_of_Staffy said:

Reminds me of a guy whose house I went to view not long back. He had spent way into six figures renovating it to a high standard, but the buyer before had dropped out just before exchange. Apparently the buyer had been happy with his offer right up until he went on Zoopla and discovered the estimated cost to be £80k less than his offer. So he dropped it by that amount. No joke.

I understand but I'm using actual sold prices at completion so not the same thing

jake_jones99

GixerKate said:

Buying houses doesn't really work like that, the market changes so what was sold 18 months ago doesn't have a huge impact today.  Do you like the house and do you want to live there?  Do you think you could buy something better for less in the same location?  These are the questions you need to think about not crunching the percentages.

Based on the info provided I don't see a justification for lowering your offer and if I was the seller I would be suspicious that you are going to be 'that' kind of FTB and mess about.

If you truly don't like the house then drop out and look for something else.

The one 18mo ago was only to show some pattern. The main comparable is the one that completed a few days ago. 

jake_jones99

born_again said:

jake_jones99 said:

Chief_of_Staffy said:

You offer what you think it's worth. There is no 'premium'.

I am aware it is a free market. My question is more about what people with prior buying/selling experience think it's worth, based on the info shared. 

No Matter how you word it or how others think.
A house is worth what you are prepared to pay.
Some would prefer a smaller house/garden & might pay more for a it over a bigger one. Others a bigger one.

Many things effect price, not just size.

Some people prefer silver rings to golden ones, but still won't pay more for them. There is an objective reality. 

jimbog

You don’t need to give any ‘justification’ for dropping out. In fact using the size as a reason would only cause annoyance as the house hasn’t changed size since you viewed it.

 If you’re getting cold feet then say you want to wait to see if something more suitable comes on the market, you want to keep the estate agent onside rather than come across as a weak buyer 

Chief_of_Staffy

jake_jones99 said:

born_again said:

jake_jones99 said:

Chief_of_Staffy said:

You offer what you think it's worth. There is no 'premium'.

I am aware it is a free market. My question is more about what people with prior buying/selling experience think it's worth, based on the info shared. 

No Matter how you word it or how others think.
A house is worth what you are prepared to pay.
Some would prefer a smaller house/garden & might pay more for a it over a bigger one. Others a bigger one.

Many things effect price, not just size.

Some people prefer silver rings to golden ones, but still won't pay more for them. There is an objective reality. 

Unless you are the only person in the world willing to pay more for a silver ring than a gold ring then I wouldn't worry about it. The same goes for the house.

jennifernil

A smaller house in the same location will always cost more per sq.m., many of the costs involved in building do not depend only on the size of the house.

Have you also taken the quality of the kitchens and bathrooms into account?   The decor?   Garden  features? How sunny or shaded it is?

jake_jones99

jennifernil said:

A smaller house in the same location will always cost more per sq.m., many of the costs involved in building do not depend only on the size of the house.

Have you also taken the quality of the kitchens and bathrooms into account?   The decor?   Garden  features? How sunny or shaded it is?

I did take it into account. Everything else is roughly the same.

jake_jones99

MeteredOut said:

jake_jones99 said:

Chief_of_Staffy said:

You offer what you think it's worth. There is no 'premium'.

I am aware it is a free market. My question is more about what people with prior buying/selling experience think it's worth, based on the info shared. 

You really haven't given enough information for anyone to provide any meaningful feedback on what the house is worth.

You can consider everything else exactly the same. Houses facing same direction, same condition etc. 
I am not hoping for an absolute valuation, but just an adjustment relative to the other house.

Albermarle

  I am close to exchange

So you have already spent a significant amount of money on conveyancing, surveys etc.
If you were unhappy with the price, that should have been sorted out earlier, one way or the other.

You seem to be actually considering Gazundering the vendor at the last minute. Not nice.....

gm0

This was really a consideration pre-offer.  Sub 10% variation is probably inside the error bar. For motivated seller/buyer on the clock - or not. For other personal reasons.

Fair value for street, condtion, size inside and out.  Small house on a nice street of bigger ones is usually at a premium per sqm to same size on less premium street and outlook.  

But on same street. Prices varying by 10% isn't a big deal. Aspects etc. It's not scientific.  

A lot depends on how many there are. How desirable the street/catchment/logistics are - and especially - how often houses come up for sale in the "hot spot" if it is. If there are lots of comparables and it doesn't matter which street you are on - lots of choice - to compare and for people to buy.  Then the price converges to a more genuine "norm".  Just price discovery and liquidity in action.  Buyer power to insist on the norm.  Lots of choice. Asking price too expensive. Offer norm. Accepted or not.  Because the norm is what you get when you sell on.  If you plan to sell in a few years only. That's important.  Maybe within 5% of "fair value" viewed via transactions is a sensible bar for those. Or maybe it's 10%.  Subjective. Noisy data.

But if the ones you want - come up once in a blue moon on this particular street.  Viewed as local market desirable, few in number. Usually kept long term - family lifecycle. They don't. It's closer to unique property bespoke transactions.  Seller has power (likely more buyers readily available than sellers).  Less convergence. Maybe 20% is fine for the latter to vary - to secure a desired forever home on a desired street/catchment vs competing, less proceedable buyers.  

You don't say what category this house falls in. 

Being subject to survey may find some items which affect perceived value by defined amounts for defects requiring attention not visually spotted pre-offer.  Which are then negotiated to a closing price - or not. Depending what they are.

But coming back late on with an "oh I miscalculated on £/sq m" comparables around town when I offered so now just prior to exchange - I now drop the offered price another % - is nonsense.  Just a gazundering timewaster.  You can do it. Nobody is committed to anything pre-exchange (England). But don't be surprised if they remarket and tell you to do one. And instruct agent to reject all further offers from you.

Why did you make a false offer which I accepted.  I'd just dump you and remarket - and entertain no more debate.  Timewaster.  Sunk survey and conveyancing costs drop on you.  Too bad.  Or if I was on the clock - counter offer a tiny token concession on agreed price. With a strict timelimit to agree that and commit to a timing for exchange before automatic remarketing.  48hr response. Or remarket. Goodbye. And one week to exchange. Or goodbye. I am done with your games. Buy or do not.  

You don't have to buy. They don't have to sell it to you.  That's it.

If the difference is now too much for you.  You now genuinely believe its too far over. For you. And you miscalculated prior.  Then you withdraw.  Or put in your lower bid and accept the consequences that may well flow from springing that as a late surprise.

Neither you nor your seller know the full circumstances of this other house which has sold.  It's a data point yes. It may not "fix" the value of this house to a range of buyers to the accuracy you seem to think.  That depends on the other factors which nobody here can possibly know without both local area info. And information about buyer/seller of the other one - which nobody has.