is house overpriced

Katykat

My daughter viewed a house priced £119.950. She offerred £118000 which was refused. After some consideration she re- offerred £119000 which was accepted. The house needs some cosmetic attention. This (mid terrace of 3 houses) was purchased 4 yrs ago for £64500. Now I know the market has exploded since then, but I am concerned that this house is still overpriced. I accept that a house is only worth what somenoe will pay, but how can we find a true reflection without first paying valuation fees. There isn't a similar house in that area, all the others are semi's or detached

John_M_Business

One way you could go about it is to compare the square footage of it to similar properties of a similar build (type and age) and 'state' of finish.

Although it is terraced, it won't be worth a lot less than a similar semi-detatched, for example.

meanmachine_2

There's really no such thing as a "true" reflection.


As you say, if someone is prepared to pay that price - which your daughter appears to be - then that is its value.

Sqaure footage is one way of looking at a house's value, but with a dozen other variables to factor in, as I say, it really is just guesswork.

On average people aren't paying more than 93.5% of the asking price, so on that basis, yes your daughter *appears* to have paid too much. But if the seller isn't prepared to accept less then what can you do, except walk away?

FJSRiDER

You can check Net House Prices or Our Property to see the actual sale price of other houses in the area.

John_M_Business

FJSRiDER wrote:

You can check Net House Prices or Our Property to see the actual sale price of other houses in the area.

I was going to mention these too as there's a lot of talk about them...

Trouble is with these, that you never really know exactly what was sold (unless you can be bothered to actually visit the addresses). Particularly in London, where a street can be flats, maisonettes and houses - these sites are particularly confusing.

AND you often don't get to see what the interior was like in any case (you can deduct a lot per square foot for a run-down place... )

FJSRiDER

John_M_Business wrote:

Trouble is with these, that you never really know exactly what was sold. Particularly in London, where a street can be flats, maisonettes and houses - these sites are particularly confusing.

AND you often don't get to see what the interior was like in any case

Indeed - but you are going to be rather better informed than if you don't bother to look and rely on whatever the agents tell you.... :rolleyes:

John_M_Business wrote:

(you can deduct a lot per square foot for a run-down place... )

Where are properties in the UK ever valued by 'square footage'?

Katykat

Yes I've already checked "ourproperty" but unfortunately the this house is on a small development of 12 houses and the last one to be sold was 2003. This was a detatched for £92000. It hardley seems fair that a terraced is now priced £119000, which is exactly why I am questioning it.

bridiej

If it's hardly fair then why on earth did she offer full asking price?



IMO more thought should have gone into what she is prepared to pay for it, and it seems she was quite happy to offer almost the asking price in the first place.

Personally I tend to believe that a house is worth what someone is prepared to pay for it, and it seems your daughter is more than happy to spend £119K to secure it...

meanmachine_2

What area is the property in?

I don't know of any area where house prices have doubled in the last four years. I know they've tripled since 1994, but I certainly wouldn't pay twice as much as someone who bought four years ago - that equates to 25% inflation per year!!!!

John_M_Business

FJSRiDER wrote:

Indeed - but you are going to be rather better informed than if you don't bother to look and rely on whatever the agents tell you....

Sure. If you know of a property that has just been sold - for example one that you viewed but decided against - then these are useful. But as a guide to prices in the area, unless you can be bothered to at least view them or visit them, then you really don't know what kind of property / layout / spec / etc. the sale price is really covering. Meaning that this information is pretty unhelpful.

FJSRiDER wrote:

Where are properties in the UK ever valued by 'square footage'?

Most areas of the UK, broadly speaking, do follow a square footage calculation. There is an average cost per square foot and you can add up to 30% for well finished properties, and deduct up to 30% for poorly maintained properties.

For greenfield, square footage can also provide a good ballpark figure. It can often be a combination of the area of land owned AND the square footage of the property.

Woby_Tide

meanmachine wrote:

What area is the property in?

I don't know of any area where house prices have doubled in the last four years. I know they've tripled since 1994, but I certainly wouldn't pay twice as much as someone who bought four years ago - that equates to 25% inflation per year!!!!

looking at some of the indices from Apr/Jun 2001 and Jul/Sep 2001 some areas do look to have seen growth in the 80-90% mark which makes a £64k to £119k jump fairly feasible, especially areas in North(with Nationwide index some were showing 120% in Northern regions over that time frame). Likewise the landregistry backs up the figures, i.e. sample below(figure in brackets is the figure for England and Wales as a whole)

Got to say the Flat/Maisonette price seems horrendously skewed unless lots of new development(and this was just a random choice of location, varies quite a lot i.e. Leeds shows most figures up 60-70% mark)

PRESTON Jul - Sep 2001 to Jan-Mar 2005
Detached Price £144923 £251831 +73.77%(+55.76%)
Semi Detached Price £72331 £143314 +98.14% (+60.01%)
Terrace Price £41952 £87483 +108.53% (+51.58%)
Flat/Maisonette Price £45862 £120922 +163.66% (+38.73%)
Overall Price£73586 £126649 +72.11%(+47.99%)

http://www.landreg.gov.uk/propertyprice/interactive/ppr_compare_get.asp