I really want this house but it's overpriced. What to do?

[Guendaline]

I could really do with some strategic advice!
We're planning to relocating to a market town but we're not in a hurry to do so. Spring or summer time would be great, but so would be autumn 2013. We've started looking around now because the type of house we're after in this particular village only comes up very rarely as there aren't many of the type. We only want to move to this town if we can get a period house in central location.
So, in September the right house came up but we didn't contact the estate agents because it was too early and also it seemed to be on at an exaggerated asking price an.d we were hoping it would be reduced if it didn't sell before Christmas. It's a period three-bedroom townhouse and the asking price is 450K. There are 8 houses of the same type and the last one that sold was in 2007 for £320K. Apparently this house that sold in 2007 was in a bad state and required modernisation but also it had a parking space next to it which the one we're interested in doesn't have at all (and there's a double yellow line in front of the houses).
We viewed it last week and we really want to buy it but are concerned that the asking price is highly inflated and would not be a good investment if for any reason we need to sell in a few years' time. The downstairs is beautiful but it lacks a cloakroom and the upstairs leaves a lot to be desired. The bathroom is tiny and old and can only be made bigger if the boiler is moved. More worryingly, the current owner started converting the loft himself and a right mess of it: the space is OK as hanging space but is not a living space and the staircase is right in the way on the first floor landing. The carpet on the stairs and in the bedrooms is awful and would also need replacing. Basically, the house is not is tip top condition like the estate agent says. We're also concerned that the current owner may not have asked the Council permission to put velux windows in the loft.
Admittedly this house is in one of the best locations in this village. I really don't know how to go about the negotiations though...The market in this town has been very slow and lots of houses are reduced after a few months of being on. However, according to the estate agent, this street is a law onto itself...Also I hear that the buyer is not in a hurry to sell. We would be happy to pay around 350K for this house, maybe a little more, but can we make an offer of 100K below the asking price? We do need to sell our house to buy this one but we're told our house should sell very quickly as a family house in the catchment area of very good schools.
What to do? I would be very grateful for any advice!

[annh]

You can make an offer of anything you want but at the moment, don't expect it to be taken seriously! Your own house in not even on the market, regardless of what you are told about how quickly it should sell. Don't rely on school catchments as you have missed the deadlines for this year, so the pressure is off on families to move right now for schools.

Do you really want this house? Almost everything you say about it is negative! Are you being blinded to all its faults by the fact that it is the type of house you want although this one is totally wrong? If you are worried about the possible lack of building regs for any work, contact the council and use that as a bargaining point in negotiations.

[bumbez]

I would keep quiet, get your house on the market once you have a buyer make an offer if it's not accepted walk away, move into rented and wait for the right house to come up.

With regard to your offer write down the negative things that you have outlined here as to why you think it's only worth x amount and that this is your best and final offer.

If you offer before you are in a position to proceed the vendor will know how keen you are and will hold out for more more money, it sounds like they are just trying their luck on a good location.


Hth

[ninjinglebells]

I have friends who made a similarly low offer and got it, can but try!

[mateysmum]

If you really want to move, you will be in a much stronger position if you have already sold your current property or are close to doing so. The vendor is unlikely to accept an offer from someone who cannot proceed.

You could ask if you can send a builder round to give you a quote on the work before you make an offer, that would help you decide if it's the right property for you and also be useful for negotiating. Sounds like they are asking top money for a house that needs money spending on it.

Check if it's listed. If it is, that's a whole different ball game repair wise.

You can offer whatever you like, but in the end it's down to how much you can afford/want it and if there is any other interest. However I guess if you offer more than the house is worth, your mortgage lender will not lend to that level.

I've just bought my dream house after 2 years searching. Several times, I thought that I wanted to buy then realised that there were too many compromises/too much work and that I was just desperate to buy. So glad DH stopped me and that eventually we found a house we both fell in love with straight away.

[mylovelymonster]

Sounds as though there are far more negatives to this house than positives, and you are keen purely on style and location. If a better house came on the market with a similar good location & style it would blow this one out of the water, yes?
Is there no parking to the rear either?

I would get your house marketed, see how quickly you can find a buyer and for how much, then leaflet drop to your chosen roads/houses you think should be in range and see if you can find something better, which I'm sure you can.
A choice of one is no choice. And a bad one asking £450k is not what you're looking for for your next home/mahoosive purchase. You deserve better.
Good luck x

[mylovelymonster]

Also - if you do want to make an offer on this one, do it when you are in a position to proceed. I don't see why you shouldn't make an offer of £100k off asking, but I don't see that the current owner would be motivated to accept that at the moment. Spring is around the corner and the market will take off again with more for sale and more buyers, which is good news for you.

What is the basic state of the house and what works have been done recently? Roof, wiring? Floors? Woodworm/rot? Windows refurbed? There is a lot of high value which could have been done to add value to this house over the alleged wreck that went for £320k - perhaps not £130k worth though. The lack of pp &/or building regs would be a big thing regards value. Yes yes find out if it's listed, and check out it's energy ratings too - cost to heat and run.

[mateysmum]

Oh and the local planning authority may put all planning application details on line (ours does) so you might be able to check if he applied for any planning permission for work.

As this is period property in a prime area, also check if it is in a conservation area as that may also affect what work you can do.

[Mandy21]

I don't think it sounds like the "wrong" house, but I don't think you're being terribly realistic about the price. Lots of the things (carpets etc) are just a matter of taste. Location is the key, and you say yourself houses rarely come up in this location. I think if you need to move by Autumn, you need to get your property on the market - you never know how long it will take to get an offer.

I also think that expecting to pay £350k for a house that is on for £450k is unrealistic - as a seller, if I'd been advised to put it on for £450k, even if I expected offers below that, I'd think an offer of £350k was just cheeky (sorry!). The seller might not be bothered by that, I think I'd probably be quite offended!

[mateysmum]

I see where you're coming from Mandy, but a lot of houses that I viewed were on at unrealistic prices often against the agent's advice. Vendors just felt they needed a certain amount in order to sell - regardless of market conditions, so you never know.

OP talk to the agent, give him your feedback and you may find out more about the house and the vendor.

[lalalonglegs]

Realistically, to get that sort of discount you need to be in a position to proceed and the property has to be at a point where obtaining a mortgage would be difficult. If the work to the loft has been completely unregulated (especially if It is listed/in a conservation area), this might be the case but I agree with everyone else: you need to get an offer on your house first.

[MmeLindor]

We put in an offer 30% under asking price and with a bit of haggling, got our house well under asking price.

Start by listing what you would have to do to the house to make it decent - not decorating to your taste, but basic stuff like making bathroom bigger, sorting out the loft - which would ultimately add value to the house.

Then add up all the alterations that you would like to do to make it really as you like it.

Compare then to other properties in the area. Would it still cost less (or the same) as a comparable but better in condition house?

We went for a house that needed a LOT of work, because I reckoned if the kitchen is not to my taste, then it doesn't matter if it is 10 year old or 30 years old - it is coming out. We are only able to do the work because we got the house at more than 30% under the asking price of similar houses in the area.

[Guendaline]

Thanks for your replies. The estate agent called me to follow up this morning and said between the lines that it was the vendor who set the price against his advice. But then added that at the end of the day a house is only worth what someone is prepared to pay for it, which is fair enough. He also said that the buyer had outright rejected an offer under 400 K. The trouble I have is that in my heart I feel that the house would be worth close to asking price if it was in tip top condition but would not offer that for fear of losing money if later on I had to sell it. Does that make sense?
Re putting my house on the market first: Yes definitely the right approach but what if my house sells before another suitable property comes up? I really really don't want to rent this time, it's just too much hassle and money wasted on rent, moving twice and fighting to have your deposit back!
Thank you for the tip about checking with the council. I know for sure that it's not a listed house but it may well be in a conservation area. Would that make a difference? I will check with the Council and report back.
Re parking: there's no parking at all at the front or back but there is a small number of free spaces around the corner but anyone can park there and they indeed are difficult to get because the house is so central. Other than that, there's a large car park nearby but the car cannot be left there all day, it needs to be moved after a number of hours.
Arghhh...I shouldn't have viewed it at all, then I would not be so torn!

[mateysmum]

Just what I said in my post above - a vendor price - not a market price. So almost certainly overpriced! So is there likely to be much interest? If I were you, I would tell the agent that you might be interested at a realistic price and leave it at that - or as I said, get some quotes so you know what that price might be.
If the rejected offer was at 400k, then it shows you are not the only ones who think the asking price is too high.
That parking thing would really get to me and it must reduce the value/appeal of the property for 99% of people.
I think you're trying to persuade yourself that this is THE house because it ticks some of your wish list boxes, but knowing in your head that it isn't.

Take a step back and breeeeeeathe!

[MmeLindor]

I'd put in a low offer, that you think the house is honestly worth.

If he accepts, great. If not, walk away.

You are in no hurry. Come back to him in a few months and ask again.

People are not paying over asking price now, and banks are very cautious with lending so you might find that in a couple of months, he will be willing to sell.

[seb1]

Not sure how it works in England but here in Scotland the vendor has to do a home report which values the property and highlights issues, you are able to get a copy from estate agents. That would give you an idea of its true value.

[lalalonglegs]

Sadly system very different in the rest of the UK, seb

[Guendaline]

The estate agent called me back today and asked me if we were still interested. I said yes but the price is too high and in any event I would need to know about roof, rot, possible breach of planning permission in the loft, etc.
He didn't say the owner was going to reduce it so I don't understand the point of his call. I feel a bit like I'm trying to interpret whether someone fancies me in the first stages of infatuation with someone!
So please tell me, shall I not read too much into this phone call?

[aufaniae]

The owner may eventually come to realise it's overpriced.

We were led to believe by 3 agents that our flat was worth between £265K & £290K. Just one said it'll get stamp duty (£250K) but we chose to ignore that.

We got an offer of £250K and rejected it.

Several weeks, and no further offers later we realised £250K was actually the realistic value and we went back to the people who made the offer. Luckily they were still up for it!

Having recently received the reports for sales in the area at the time, I can see we did pretty well in fact.

[jaynebxl]

You could do something our agents suggested to us, that we put our house on the market then if we get an offer tell the people we are happy to accept, subject to purchase. So if they are in a hurry they can pull out but if they are in rented and can be flexible they will hang on for a bit (although not forever!). Then you could go ahead and make a lower offer. Be prepared that the vendors may well be prepared for the long haul to get the price they want though, and that's their prerogative as the vendors.

[TheFallenNinja]

If I made an offer of 100k below the asking price and it was accepted I would walk away immediately.

[Guendaline]

fallenninja what do you mean? Do you think there's something fishy going on (apart for the vendor trying his luck with a high price?)
Would it be very expensive to commission a survey to check the DIY loft conversion hasn't managed the house and all other possible structural faults?

[Guendaline]

damaged not managed

[NorthernLurker]

Why would you want to buy a house (with no parking at all) from a greedy, bad at DIY seller? World of trouble............

[MmeLindor]

Yup. Spideysenses tingling here too.

Sounds like the agent is Desperate for a sale and hoping you'll up your offer. You are probably the first person in ages who has even expressed an interest.

[Guendaline]

Because the house has the potential to be stunning and is in a beautiful location. But I am getting quite fed up with this little game of cat and mouse and am starting to lose interest!