Previous Sale Price - Does it matter??

SerenaGoode

rscott4563 wrote: »

Wow, I'm sorry for posting! I thought forums I said 6 months and 2006 and if you read my post I also said till it went back on the market.......hence its been on the market now for 7-8 months...

That's a bit of a clue in itself. If they can't sell at that price after 7-8 months, they are probably asking too much.

One thing to consider is how much they may have spent on the house. If they have done a Property Ladder type botch job, then they will be imagining they can make a healthy profit on top of the £20K or £40K or whatever they spent on it. Does it seem 'done-up'? If so, maybe you can guess what they spent. This might give you a clue as to the least they will accept now that they've realised the market is a bit tougher than they expected.

In any case, don't be worried about making a cheeky offer. The worst they can do is say No.

SerenaGoode

carpetbelly wrote: »

What profit someone will make on the property is no concern of yours to be brutally honest. The only concern you have is 'do I want this property' and 'what's an acceptable price for me to pay that they'd be willing to take'.

I disagree. They were only there six months. So either they were trying to do-up and flip, or if there are genuine reasons for moving, they haven't had much time to pay off the mortgage or change their financial situation. So either way they price they paid + what they spent on the property is likely to be their perceived negotiating floor. If you are going to enter into a negotiation with someone, the more you know about their negotiating situation the better, and the price they paid is one crucial part of a jigsaw of trying to establish what they might accept.

Phirefly

Rick62 wrote: »

So for instance if I wanted a place in Annies Wharf (post 19) I would now know to be looking at £135k to £140k, so if someone was asking £150k I would have a solid basis for negotiating lower.

If the sold price for #14 was omitted, you might think differently though? Its only just been listed, so until it was, the whole picture looked very different. And what about the fact that #12 sold in January 2007 for £145k, yet some paperwork anomaly means these details have not been submitted to the land registry?

rscott4563

Thanks for all the replies guys.

After a second viewing, some major weighing up and reading the posts here, I've decided that this one just isn't for me.

Asking price way too high, I was thinking £175-180k but apparently that would be too low.

Major road outside, though the back is straight on to open countryside.

It doesn't seem like its an easy house to sell on, hence its been sitting on the market for 7 months even after a full refurb/do up....

So it's back to rightmove for me... :rolleyes:

Cheers

WTF?_2

carpetbelly wrote: »

What the owners paid for their property in the whole grand scheme of things does not matter. Whether that was last month, last year, 10yrs ago. That's what they felt the property was worth and that's the agreement they came to with the previous owners for whatever reason.

You have to say to yourself, giving current market conditions, what other similar properties in the area are up/selling for, what am I willing to pay for this property and would I be willing to walk away if the price gets a bit higher than I'd like.

What profit someone will make on the property is no concern of yours to be brutally honest. The only concern you have is 'do I want this property' and 'what's an acceptable price for me to pay that they'd be willing to take'.

It's worth knowing what they paid for it though as it gives you that little bit of an edge.

For example, if you know the seller paid 150k and is asking 200k, then you can probably get away with lower offers than you would if they had paid 185k. (People really don't like selling for less than they paid)

However, the idea originally espoused that the profit they might make is somehow unfair or out of order given the amount of time they owned the house, is just ridiculous . The market determines the worth of the house, not some sense of 'fair play'.

carolt

Offer whatever you'd like - I'd be inclined to suggest 180K was rather high TBH. Few people like to sell at a loss (even in a falling market, where selling quickly might benefit them, or where they may be looking to trade up and therefore benefit from falling prices higher up the chain). But that is where I disagree with some other posters here - I think the fact that you know what they paid and have a fairly good idea what they've spent since means you can feel fairly sure they won't actually be out of pocket but are just trying it on - when the house was put on the market all those months ago, the market was much stronger and those hoping to flip for a property for a quick profit were probably happy to ask a cheeky price. Now, with all the headlines about falling prices, and after 7 months or whatever, they'd probably just be happy to be shot of it at any price, as long as it's not actually a loss.

What have you got to lose?

Ask, all they can say is no..... I'd start with a lower offer myself, more like 155K - but then TBH you'd have to pay me to live on a main road...

merlinthehappypig

To get back to the original question, this has proved quite interesting.

My gut reaction to the Op and from reading the comments was that the original price doesn't matter.

However.

I'm just about to put in some offers on houses we viewed over the last day or two. Prompted by this thread I thought it might be useful to have a look at the previous sold prices for the houses that we are interested in, just in case they had any relevance.

Two didn't - one because it sold too long ago and the other because it has been substantially extended.

The other did - the house was sold new in March 2007 for £482000 (it's a one-off new build with land and stables so wouldn't usually suffer an initial loss of value like a new build on an estate) and is on the market for offers around £495000. It's unlikely that our offer of £440000 will be accepted given this though we obviously don't know the full circumstances of the sellers.

I would expect at least a 5% drop on an asking price anyway which brings this down to £470000 which would be a loss of £12000 on the price. Even if they got the full £495000, which they won't, they will still make a loss in real terms after taking the £14000 odd stamp duty and other legal costs into account.

I'm not sure if it has made our bargaining position easier or harder (thanks OP!), but it does illustrate just how people are already being hit by falling prices and demand.

Based on the 20 or so other houses we have viewed we actually felt the asking price was quite reasonable by comparison.

I wouldn't be quite as quick to dismiss the relevance of previous sold prices as a result!

TheStig_3

What is sounds like people are saying is, whats it worth to you ? Whatever that figure is, is what it's worth ! Regardless of what they paid for it...Best of luck with your offer..