Tricky one I know - are we overpaying for this house?

[Zimm]

Had an offer accepted on a house we love for 267k. But it is really 259K as they are paying stamp duty as they need to achieve over 250 to afford their move. (I already know some lenders will have an issue with this and have a broker on the case). The house previously sold for 230k in 2006 BUT i know they have done a lot of work since then, new bathrooms, kitchen, flooring, all decorated etc. It is beautiful. Also work in the garden. The house's (I presume identical as a terrace) next door neighbours sold for £262,500 in 2008 and £271,600 in 2007. Zoopla suggest the place we are buying is only worth 224,00! I know the valuation will help to some extent but any initial thoughts? FWIW I don't mind overpaying a bit as it is the perfect house for us as a family for many, many reasons. But I don't want to be fleeced!

[Zimm]

It's a 3 bed in south east within an hour of London. Very good area of town.

[MollysChamber]

Zoopla is rubbish ime.

If you have been looking around, know what's on the market, love the house and are happy with the price and can afford it then you haven't overpaid imho.

[noddyholder]

Zoopla is notoriously innaccurate The real measure is the land registry sod figures as that tells you what people are prepared to actually pay to live there and not an online calculation system based on out dated methods regarding inflation and home improvements.

[MoreBeta]

Zimm - the Land Registry carries the most accurate data on how much house prices have changed by postcode over the last 10 years. Houses in the South East do seem to be selling still at the same level as 2006/7 so I guess it depends how much work was done to the house. If they did £100k then I would say you are doing very well. If it was £50k of work they did then probably just about OK and any less you are overpaying somewhat.

[gettingeasier]

Zimm I agree with Molly

I worried about this when I bought recently after checking Nethouseprices but the thing is you dont really know what these neighbouring houses are like and I had looked at enough houses to know that even if I was paying a little over the odds there would be plenty of other buyers prepared to do the same if I didnt take the house.

[Fimbo]

Zoopla is crap. We are the only house of this type in the street, so they have nothing to base their figures on, only what has sold round about, which are a lot lot different to my house.

[Fimbo]

Oh ffs just looked at Zoopla again. Glad I am not selling my house, we have the biggest house on the road, with an extra bedroom, double garage with double drive with parking out front and large garden. Yet they have valued the house 2 doors down with one less bedroom, less parking, single garage and smaller garden for £16k more than mine. They are new builds and were all finished at the same time. Grrrrrrrrrrrrr

[hocuspontas]

A house is worth what you are willing to pay for it. Don't quibble over peanuts, you will kick yourself if you lose it.

[SparklePrincess]

The price sounds about right to me. :)

[Zimm]

Thanks all. Is all going a bit wrong as no londers will accept us with vendours paying stampt duty unless we add the amount to our deposit - hence them paying stampt duty become pointless!!

[SparklePrincess]

I thought as much. The only way is if they reduce the house by the amount you would pay in stamp duty at the figure you offered...

[SparklePrincess]

If I am correct that makes the new purchase price £258,990

[Zimm]

Tis a PITA. Feel the agents have forced everyone into a position where we are now emotionally committed to buying a house at 259k - no one pays 259k for a house! If w ehave to find 8k (which we can only do by going from 85% LTV to 90 LTV may well increase our budget ( we can get a mortgage up to 300k) and look at other stuff.......what to do!

[Zimm]

Tempted to tell the agents to stick it because I feel we have all been tricked into this position - our sellers are now offering on a home based on our offer so reducing it will cause them problems too...

[SparklePrincess]

The goal posts have not been moved. The Vendor is still paying the stamp duty. What is the issue? I dont understand your concern tbh.

[catsareevil]

Can you explain why you feel that the goal posts have moved?

The reason that 'no-one pays 259k for a house' is because of stamp duty, but that isnt a concern for you. If the stamp duty threshold was at 260k then lots of people would be paying 259k for a house.

And Zoopla is hopeless IMO.

[Zimm]

The vendor is not still paying the stamp duty. Paying 259k for a house and finding 8k cash for stamp duty is not the same as paying 267k for a house, because you don't have to find 8k extra cash then. We enough for a deposit at 267 but a spare 8k for stamp duty. The issue is the mortgage
won't allow the vendor to 'gift' us the money.

[SparklePrincess]

You agreed to pay 267k. Correct? They agreed to pay the stamp duty. Correct? The only way this is possible is for them to reduce the price to cover the contribution they would of made for stamp duty.

I cannot see your confusion. The end result is exactly the same. The vendor is reducing the price to allow for the stamp duty. You were always going to pay the same amount for the house regardless.

You were happy enough with the price before. Nothing has changed.

Sounds like you are getting a good deal on the house considering the work that's been done to it.

You have to decide now whether you made a mistake initially in offering more than you now feel comfortable with.

[Zimm]

It's the difference between adding the 8k to our mortgage (not a problem as we earn enough) or having 8k cash upfront (is a problem as we don't have unlimited savings).

I'm happy with the price we're paying. I'm not happy with having to reduce our deposit and hence our LTV to find the 8 cash for stamp duty.

[Harimad]

Can't you just add the 8k to your mortgage amount and since it's more than the property you're paying for, the cash gets deposited in your account to pay for the stamp duty?

I'm pretty sure we've done this before - the stamp duty just got factored into all the costs we had that were all added on to the mortgage (not the best way of doing things, but needs must...)...

[SparklePrincess]

The purchase price is the same regardless.. It will cost you no more money. I dont see how you fail to understand this..

[mollschambers]

I understand. OP thought she could get mortgage for whole amount.

Lender won't give additional £8k to cover stamp duty so OP has to find the cash.

Don't you have some equity in current house or savings for deposit OP? Surely this would give you flexilibility that you need.

[SparklePrincess]

Im confused.... The purchase price as agreed is 267k, so surely the mortgage agreed covers that? Now the purchase price will be reduced to accommodate the 8k contribution from the vendor. This doesn't stop the buyer keeping the mortgage at the same level as before.

Regardless of the way the sums are added the end figure is the same....

If the buyer has mortgaged themselves to the hilt at 259k naively assuming the stamp duty figure could be paid by the vendor in that way then maybe they are overstretching themselves. If all else fails there are 0% credit cards to tide you over, or maybe start looking at houses within budget or drop the price to 250k & see if they accept....

[mollschambers]

Apparently the lender won't keep the mortgage at that level Sparkle. Not sure why. Bit confused too. OP doesn't have enough cash for deposit plus £8k stamp duty.