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Offered too much on a house?(48 Posts)
I have seen other related threads which have been helpful but just need to share my current situation.
DH and I have been looking for a 3 bed house since just before Christmas (first time buyers).. we?ve seen a fair number of places which haven?t really done it for us, and found a place a few days ago which ticks almost all the boxes, doesnt need any work (we think it?s lovely), and can move straight in.
Problem is I think we might have jumped too quickly to the asking price. The vendor said that he wouldn't accept anything less than the asking price, but we tried our luck and offered a few thousand less than that (which was only around 2% less). After one or two exchanges via the estate Agent, we met the vendor at the asking price.
Now I feel like perhaps we could have got it for less because
a) there were no other offers on the table, we only knew about one other buyer who was considering viewing the property again
b) I?ve checked zoopla (which I?ve seen from other threads isn?t always reliable anyway) and it looks like properties on the same street have sold for 10s of thousands less last year. Saying that this property has more to offer in square footage due to it?s positioning on the street
c) the zoopla estimate was £15k less than our accepted offer. (although I didn?t provide all the square feet information)
d) it was on at another agent at £10k less than the price we have agreed to? which to me means that another agent considers the property to be worth less than what we have agreed to.
We are in a good position in terms of being able to afford the mortgage thankfully as we have restricted ourselves to a budget, but I hate thinking that we may have been too hasty? I know we could try to reduce the offer at the risk of losing the property, and I hate being an unreliable type? or we could withdraw altogether.. feeling very stressed right now. I know I have to weigh it all up.. we?re going to see the place one more time with family who are familiar with the area, it is a home rather than an investment and we should love where we live without worrying about a few extra thousand.. just wish we?d been a bit more scrupulous for peace of mind
you've only been looking for a short time - but if it is the right house for you, and you don't expect a quick profit ( which is not what it is about) then stick with it.
but if you do want to bail out or lower your offer (both of which you are perfectly entitled to do), do it quickly.
d) is the key point. Not because the agent valued it at £10k less but because, in agreeing to market the house at that price, the vendor was obviously prepared to accept £10k less than you've now agreed - that's what the vendor agreed it was worth.
It obviously didn't sell at £10k less which would suggest nobody else thought it was worth more either.
How long ago was it marketed at that price?
If it's within the last 6mths/year I would go back to the current agent, inform them you are aware of the other agent's price and feel you've overpaid and want to renegotiate - but be prepared to walk away/play hard.
Sammyd I think you're right re: d).
I am going to discuss with DH about playing hard and pointing this out to the agent. This place is ideal for us (have done the silly thing of already mentally moving in) but I have only been looking for a short while so chances are there are others that will come up..and while I am really yearning to have my own place asap, I dont want to overpay.
it's definitely not been on the market for more than 6 months
Make sure you get a decent survey. The surveyor will let you know what value they put on the property and if that value is, say, 10k less than you've offered then you can easily say to the vendor you're dropping the offer because the survey says it's not worth the asking price.
Is anything likely to come up on the survey. That's also a time that a price can be renegotiated and also the vendor will then have invested time and effort in moving somewhere else?
If you have only been looking a few months that is not very long, by spring lots of new houses will be appearing.
If it makes you feel any better we moved into our forever home in September despite it being valued 15 grand under our offer. The vendor wouldn't drop the price so we bought it any way and no regrets, we really love it. If we'd tried to hardball the vendor by walking away there's a very real chance we would have lost it.
bumbez am really pleased for you... hope I can say the same at some point.
The house looks like it's in good condition but you never know, the only other thing that might come up is where the vendor has said that we should be entitled to some extra external space.. the survey should tell us if that is the case or not and may give us some leverage to reduce the price. DH is getting agitated that i'm backtracking but i need to be diligent
Sorry - my mistake.. having checked online again properly, the other agents have the house on at a guide range... our offer is in the middle of the guide range... which is a little bit more reassuring i think. Then the only thing i'm worried about is the fact that zoopla shows that properties on the same road were sold for £40k-£50k less in late 2012.. obviously i dont know if there were problems with those houses that reflect those prices but they look ok to me. I have looked at properties in the surrounding area, and they are similarly priced to what i have offered... i just dont understand how there can be such a large difference in a short space of time
Have you looked on rightmove sold prices as very often there are still photos of the houses up, so it might give you a better idea if your one is worth more if that makes sense?
Unless your area is very buoyant it does begin to sound like you are paying too much. An estate agent once told me that when they value something such as 300 - 350 , the estate agent thinks 300 whilst the vendor thinks and holds out for 350.iyswim.
Do you fancy linking? There's bound to be someone that knows the area !
just checked rightmove, and on the same street, houses sold at a between £30k-£60k less than my price in 2012, and one property was sold for £4k less than my price in 2011. The immediate area around it seems to have similarly priced properties to what i have offered, I just dont get it... can it really be feasible that all agents and vendors are being so optimistic after such sales just a few months ago? Not sure how to link but will see if I can!
As a professional advisor to property buyers and with over 30 years experience in both buying and selling it appears to me that you are in a classic first time buyers dilemma.
You say that you don't want to appear unreliable- but you are in reality really worried that your offer price is too high for the current market conditions.
In order to help you make a proper decision as to whether to proceed with your original offer perhaps it would be better to ask yourselves some questions:
How long has the property been marketed by the current estate agent?
How long was the property marketed by the previous estate agent?
Why has the valuation risen? Has a new extension raised the price or is it that a different estate agent has raised the valuation?
If they have raised the valuation - what criteria has been used? After all you tell us that other properties in the immediate area have sold for many thousands of pounds less than your current offer price
What is the sellers position?-- do they need/want a quick sale?
Who told you that there was possible competition?- the owner or the estate agent? What is their motivation for telling you this- to increase anxiety and make you rush into an offer perhaps?
Quite often buyers rely on the sellers agent for advice as to how best to proceed- the estate agent's client is the seller not you the buyer.
What could you do with any monies saved, if you reduce the offer price?
I sincerely hope this helps you in your decision-making process, and I wish you all the very best
Thank you YappYapp.. do you know if the sold prices shown on rightmove/zoopla are usually reliable?
I am going through those questions and i am realising that I think i probably would be overpaying.. apart from quite a substantial amount of additional space down the side of the house that other properties on tthe street do not have, a very high quality of workmanship within the house, and a good size conservatory that perhaps the other properties might not have had, i can't see what else there is.. do conservatories add that much value?
I think that the additional space and the high quality workmanship might be contributing to a difference in price. I don't think that conservatories add value at all though (I'm sure I read that somewhere).
thanks Pixie...that might be it, noww i have to weigh up whether all of that is actually worth the extra £30k-£60k which i doubt! i also noticed that the property i'm looking at was actually last bought for £15k less than my offer in 2007.. but i'm sure that was when markets were at their peak anyway
Nana, it's so difficult, isn't it? The best case is that both the buyer and the seller are happy with the agreed price.
I can see myself worrying that I'd paid too much for a house, and that affecting how I feel about the house afterwards. I feel a bit like that about my car actually.
lol, that is me all over.. i'm bad at buying anything, i'm one of those that always goes back for a refund or an exchange because i'm never sure.
But I have to be sensible and realistic.. and i think i am coming to a decision based on all the research i'm doing. I have just found on zoopla that the property in question has been on the market since Jul last year, whereas we were told by the vendor that it's only been on there for a couple of months.. i think the vendor saw how excited i was about the house (silly me), and told me that someone else was coming to to look at the house for a second viewing, and i felt like i had to put an offer in, and a good offer.
I bought a car recently and saw something better immediately afterwards, i actually thought i might be able to take the car back for a refund..
i keep uncovering new info that keep swaying my decision making. Now seen on zoopla that the house opposite, which is the most similar property to the one i'm looking at (i.e. semi-detached and they have expanded to the side of the house, whereas with the property i'm looking at that space hasn't been built onto yet). Zoopla estimates the value to be £10k MORE for that house than what i've offered... very perplexed but at the same time losing the will to live so not fretting so much now..
I think zoopla and rightmove are both reliable tools.
Do you believe that the vendor had a second viewing ?
I expect if the house is as lovely as you say it will sell soon in the Spring rush but there will be other houses, I've lost count of how many I've fallen in love with and lost . My Dh refers to it as 'putting tea lights away' as years ago I had my heart set on a period town house with basement kitchen, I mentally put tea lights up the outside steps - anyway I'm waffling.
It's hard enough for 1st time buyers without overpaying.
On the other hand don't underestimate how much it costs to do up a house- sorry I'm not helping
Good luck, let us know what you decide
Sold prices on Rightmove and Zoopla are reliable but Zoopla estimated values are not and are often wildly inaccurate, not least because they are affected by claims made by owners (or others) about a property, which can't be verified. A property owner can hike the estimated value of a property by, for example, claiming that £250k's worth of improvements have been done to a house that has actually only had £5k's worth of improvements. So don't make any decisions based on the basically worthless Zoopla valuations; look at sold prices.
It's your call (and I was in your position this time last year so I really feel for you), but if owners are asking way above current market value (based on sold house prices) for a house that's been on the market for 6 months and only has one other possible expression of interest, I wouldn't offer anything like the asking price. If it didn't sell months ago, I can't imagine people are going to be fighting you for a house at overvalued asking price in the dead of winter.
zoopla isn't 100% accurate - according to it, I paid £100k more for my house than I actually did (the solicitor made a mistake in the land registry return which was subsequently rectified but zoopla hasn't picked up).
What zoopla etc. says though isn't really relevant OP - the house is worth to you as much as you are willing to pay for it. Things you might need to consider, however, are (i) do you intend to move in the next few years? If so, it becomes more important that you don't pay more than the house might be worth to someone else, and (ii) what sort of deposit do you have? If you will have plenty of equity, your exposure to house price and interest rate fluctuation shouldn't be too drastic, but buying with a small deposit means that you might not be able to access decent re-mortgage deals in future.
Another point to bear in mind is that your mortgage company will be doing its own valuation, and if the valuer believes you are paying too much the mortgage company will restrict the funds it is prepared to lend to reflect that valuation. If that happens you will have no option other than to try to re-negotiate the price.
Bumbez, i haven't put tealights out but i have moved my furniture in and have had a cup of tea in the conservatory already.
Weighing everything up, i think that the estimated prices and the actual sold prices shown on zoopla are probably accurate.
It's one of the bigger properties on the street and is done up very nicely... which possibly reflects the higher price (of between £20-40k between actual sold prices of other houses and the estimated value of the property i'm looking at).
The difference in price between this house and the very similar one opposite which already has the extension built is around £30k... which may account for the cost of an extension.
Thanks for all the advice. Bottom line is that I think i've offerd at least £10k too much. The vendor has clearly had the property on for quite a few months because he wants to make a bit of money compared to the price at which he bought it. There may be a spring rush... but next time I will do a lot more research before making an offer.
It really depends how flexible you are in your 'wants' list for a house, I guess.
If you want a certain number of bedrooms, in a certain school catchment, a certain standard of decor...! it might actually be quite hard to find somewhere else that ticks all your boxes. Or you might find somewhere that is 10k cheaper but needs the kitchen done
like ours or something else expensive.
So how picky are you!?
Personally Id not consider Zoopla estimates as even relevant. Get a reputable survey carried out...thats what mortgage lender will take into account when considering how much they will actually lend you against it.
Every property is only ever worth what someone is prepared to pay for it.
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