House price question

[xmyboys]

We have looked at a property this week. Listed £430,000.
Previous sale was Oct 2010 sold for £390,000. From photos of earlier sale it doesn't look like they have done any major renovations since they have owned it.
Is this price too high in this Market?

[LoopyLoopsRootyFroots]

Depends on the area.

[AnnoyingOrange]

I would assume that they will be expecting offers under that price. A 90% offer would be back to £390

[SwedeHeart]

Of course the price is too high - they are being chancers (or their EAs are).
Prices are falling. They probably paid too much for it at 390k. Do your research using the various internet tools at your disposal.

What area is it in?

[xmyboys]

Interesting! Had not thought of the ten per cent do yes will have a look on the net and gather some more info.

Area is Buckinghamshire.

[SwedeHeart]

OP try and find the latest RICS report. I had a look on housepricecrash.co.uk and couldn't find it - they often refer to it.

The other housing reports are a bit wishy-washy I think, although all of them are showing year on year decreases.

In any case the vendors in your situation seem to be on a different planet. Prices in the UK are down between 2 and 15%. Nowhere, apart from central London (special case) has increased.

Personally I wouldn't even want to try and reason with people like that and would walk away.

[TalkinPeace2]

As I have said elsewhere, the true value of any home is the cost to rebuild it from the ground
my house is "worth" £249,000
but I know from the work I had done that the rebuild cost is nearer £175,000
and I keep my mortgage under £100,000

Housepricecrash is a VERY bearish site, but highly amusing as an utter antidote to the EAs, mortgage companies, surveyors and the rest who only make their money as a %age of a rising "value"

[SwedeHeart]

I agree with a lot of what you say TalkinPeace. I recently started looking at that site as my neice is (was) looking to buy and seems there are a lot of very clever people there (okay, one or two nutters too).

I would however, much rather trust that site than any estate agent.

[catsareevil]

Talkinpeace

The value also includes the price of the plot.

Im not sure that the true value is the cost of rebuilding a house from the ground. I have a very old, house, built to a high standard. The rebuild cost is a more than what the house would fetch if I sold it.

[TalkinPeace2]

*cats
*I'm doing the accounts for a couple of selfbuilders at the moment
barn conversions in parts of the country I could only DREAM of living in
my maths are sound
my own house is an extended 1930 semi - currently just over 200 sqm
if your house is old I'd be VERY surprised if rebuild is more than sale, even if listed

[Ponders]

terraced houses in particular have a very high rebuild cost relative to market value (or they do outside London )

[threeisthemagicnumber]

Swede
Some areas have increased in value - as crazy as it sounds (and as nuts as I think it is).

We bought a house in a SE city in August 2010 for £265. Two other houses on the street (no real difference in condition etc) have gone on since July 2011 at offers over £300k and sold for £305 and £310 respectively.

[TalkinPeace2]

ponders
that is what the house insurance company will tell you
BUT
recently round here we had a "cannabis house" burn to the ground
rebuild cost was less than half what the insurers had been charging the landlords for

more house price inflation pressures
go figure

[Ponders]

I'm not going by what the insurance company says (ours is quite reasonable anyway)

but mid-terraces are tricky because clearing a site with 2 other houses adjoining is a lot more complex than a semi or detached

I suppose if a house destroys itself completely there's less work involved

actually I just checked ours out using £120 per sq ft & it comes out to almost exactly market value now, but last time I checked (prob 10 years ago) rebuild cost was higher

[TalkinPeace2]

Ponders
you just hit the nail on the head
when I bought houses in the 198O's the rebuild cost of a terrace was always WAY more than the purchase price
the fact that it has now dropped below shows the artificial inflation all round

PS the insurer will justify a terrace as tricky - but my builder clients say that's hogwash

[catsareevil]

My house is a large, listed mid-terrace, so that might explain it. If I take the rebuild cost and the cost of the plot I get an amount far far in excess of what anyone in their right mind would pay for my house

[TalkinPeace2]

"cost of the plot"
sounds like a PFI fiddle factor to me
land prices with restrictions (like a mid terrace plot) are diddly squat

[catsareevil]

I'm in the middle of a city and plots round here dont cost 'diddly squat'.

[TalkinPeace2]

cats
so am I - watch the auction sold prices
rebuild pries for limited houses even in NAYCE bits of London are stuff all
that is why the builders like greenfield with no restrictions
(by stuff all I mean under £50k)

[londonlottie]

Having been trawling Rightmove for months, I would say the only way to answer your question is to see how the price now compares to other similar properties.

We have just put our house on the market and had it go under offer at £20k more than we had it offered at a year ago. Prices are generally falling - but not everywhere.

[mylovelymonster]

It really does depend on individual circumstances - vendor/purchaser/house - but the trend is static to downward in most areas, and I refer mainly to asking prices, which IME are starting way too high (N.Herts).
Over 10% increase in one year really has no basis if the house has not been improved - new kitchen or bathroom etc. I imagine the vendors expect offers a bit below.
If/how much you offer really depends on you and whether you like the house enough to want to buy it/live in it. If you do, make an offer that is right for YOU. Don't feel restricted by the asking price, or try to read the market too much. Make your decision which suits you and your finances. Please don't overstretch yourselves (calculate comfort factor with any mortgage if the interest rate was to increase to 8-10% or one of you lost your job), and go in with what you consider a fair offer. Whether they accept/engage & negotiate a bit further or dismiss outright is up to them.
Not much you can do unless you can/want to throw money at it but in the current economic climate, I think that would be unwise.

[LondonMumsie]

We recently looked at a property which was asking 75k more than they paid a year ago. We asked them to justify it. They said they had "put central heating in". Prices in this area are not going up, so we walked away as they were clearly deluded. I think maybe 10k more for central heating (work cost plus disruption), but 75K?? Last I looked they had not sold.

[londonlottie]

But maybe when they got it last year they got it for a song? I really don't think there's any point looking to see what people got for it last year or whenever - it's all about how it compares to similar properties in the area that are on the market NOW, particularly those that are selling. When we put ours on the market recently, my agent told me to only compare the price to those which showed up as sold/under offer on the property websites - no point comparing the price of mine to similar ones which were on for a lot more - but not actually SELLING! :)

[mylovelymonster]

How many times have I heard that!! Is now a standard cliche that the vendors bought 'below market value'. What a crock. It may happen but I doubt it is as usual as agents/vendors try to make out. We now have all the information, digitally & free, at our fingertips for previous sold and current selling prices, so is very easy to discount such rubbish.
Also, vendors forget that just because a buyer was recently in a position to stump up asking price for the next door neighbour's, that they should automatically achieve the same or perhaps more. Houses really do not have an RRP and a sale is where a buyer and seller can agree terms at a price mutually beneficial. So current selling prices are a guide only.

[mylovelymonster]

LondonMumsie - very sensible. There is always another house. Always.

[Becaroooo]

Around here (Derbyshire) several houses have gone for asking price (to my utter amazement) and then come back on the market weeks/months later at a lower price when the chain has fallen through...at least 6 this year that I know of!