Paid £330k flat valued £275k?

pokey128

Hi
My friends have just recently offered on a flat in Edinburgh at a price of £330k (it was offers over £240 I think).
They just got the place surveyed and it was valued at £275k?

I have never bought a flat that was valued at more than my offer (both times I bought the valuation was the same as my offer) so don't know if this is normal or not.

I just feel that in this market they would be crazy to pay such a premium for a flat?

Should I say something or just leave them to it???

Thanks

Snooze

£330k ??? for a flat ??!! in Edinburgh ???!?!?! Whiskey Tango Foxtrot, over?

Sounds like they've got more money than sense. I bet the seller hasn't stopped laughing since.

Rob

Pipistrel

I'm also in Scotland. Had this very conversation with a surveyor when buying our new house. It was offers over £340k, had it valued at £375k and we offered at that, was turned down due to the amount of interest. Now i have to tell you that this is a unique house with lots of land/stable/arena so will have been under a lot of demand. I know in my 2 years of looking only 3 houses like that have come up in commute distance of edi/gla. So on the closing date we offered £400k and was accepted. We then asked the mortgage company to resurvey and it came back at £395k which helped. Conversation with surveyor went -

- We dont set the market we follow it. A house has two values, what its worth in bricks and mortor and what its worth in desirability. A lot of notes of interest/bids pushes up the second.

Having said that, it seems mad to bid almost 100k over for a flat, unless its a penthouse in the new town! But they must have done their sums and if its worth that to them well, let them get on with it. Personally we will never move from our new house, it was worth that amount to us to secure and we can afford the monthly payment comfortably so i'm not loosing sleep over it.

Optimist

Probably too late for them to do anything [FONT=Arial, Helvetica, sans-serif]unlike the engish system of buying a house, once the offer has been accepted in Scotland, they have entered into a legally binding arrangement and neither party can withdraw without potentially being held liable for the consequent losses of the other party.[/FONT]

merlinthehappypig

Optimist wrote: »

Probably too late for them to do anything [FONT=Arial, Helvetica, sans-serif]unlike the engish system of buying a house, once the offer has been accepted in Scotland, they have entered into a legally binding arrangement and neither party can withdraw without potentially being held liable for the consequent losses of the other party.[/FONT]

Not necessarily the case. Nothing is binding until the missives have been concluded and that is usually two to three weeks after the offer has been accepted.

It would be unusual for the missives to be concluded before the mortgage offer, though that does happen.

eaglesrjh

did they offer "subject to survey" as you are allowed to in scotland? They may have room to pull out on that if they did. House prices in Scotland have not been as affected as much by the slow down/crash as other areas of the UK. basically if they want the place and were happy to pay that then heyho. just hope they have a large deposit cos nobody is going to lend them that ltv anymore! Or if they do the interest rate will be awful!!!!!

pokey128

Thanks for the replies. They haven't concluded missives yet so they are not tied in to anything yet. It does take about a month to conclude missives in Scotland. The bank are currently doing their own survey just now so hopefully that will come back higher for their sake. Its a lovely flat and they lost out on a few in the same area at the same kind of price so it doesn't seem totally crazy but for the fact that the valuation came back sooooooo much lower than they thought.

beecher

Optimist wrote: »

Probably too late for them to do anything [FONT=Arial, Helvetica, sans-serif]unlike the engish system of buying a house, once the offer has been accepted in Scotland, they have entered into a legally binding arrangement and neither party can withdraw without potentially being held liable for the consequent losses of the other party.[/FONT]

Since they have only just got the survey done, this isn't true. It used to be the case that a valuation was done before an offer was put in, but in the last 3 or 4 years people seem to put in offers 'subject to survey' so god only knows how they work out how much to offer. Hopefully with the single survey scheme we'll get back to having a valuation first as I don't think I could cope otherwise!

As for the OP, I'd say a quick 'I think you're mad, and you should think about what'll happen when prices fall' and leave it at that - it is their decision at the end of the day, and presumably they have a large deposit as they won't get a mortgage of more than £250k with that valuation.

D_e_n_i_s_e

simillar story pokey to where i am.

personally im hoping that this credit crunch crisis brings the demise of some of these wannabe estate agents who i partly blame for the property bubble.

estate agents work mostly off a percentage so the higher a property sells for the more goes into there pocket. 2% being the average - though the amount of work they put into advertising and viewing a property is the same be it for a £100,000 property or a £300,000 property (hence massively profiteering).

The problem with this is that some estate agents (and to be an estate agent all you need is a digital camera, and some advertising space be it online in print or whatever). put simply no degree or accreditation is required - although with all the smart attire you see them in one would think they did.anyway the problem with this is that theres no set assessment what one estate agent might say is worth £150k another may say £180k its all guesswork.

http://news.bbc.co.uk/1/hi/magazine/4826444.stm

In the US theres a new legality being review which would be useful here fundamentally amongst other things it works off sq footage that is if your house is in mayfair its worth £1000 per sq ft and if its in clapton its £200 sq ft if its next to a private school its £100 more for every 10m it is close to it and so on.

Other countries have a 'cappage' where estatge agents can only charge a capped amount no matter what the property is that they sell.

unlike uk estate agents, surveyors need to pass a rigourous degree course, be accredited by the RCIS and commit to CPD (continued professional development).

it might cost £500 to get a survey but money worth spending as you'll get the true value of the house and a good report on its integrity, structural strength anything potentially worng with it and so on.

id tell your friends to offer closer to the surveyors mark and use what he has highlighted in his report to their strength to get a reasonable price

patchman

Snooze wrote: »

£330k ??? for a flat ??!! in Edinburgh ???!?!?! Whiskey Tango Foxtrot, over?

Sounds like they've got more money than sense. I bet the seller hasn't stopped laughing since.

Rob

Seeing as it's Scotland that would Whisky without the E :D

Kez100

You can blame EAs for a lot but you cannot blame them for the housing boom. If that was the case prices would never go down. It's the supply of money really that did it (IMO).

Love the Whiskey Tango Foxtrot!! LOL