How should we agree a house price?

[MrsCurly]

We may have the opportunity to buy a house privately but have no idea how to agree a price.

Last year we tried to buy a house in a very competitive area. It went to sealed bids. The winning bid was more than 50% over the asking price - a great deal more than we had offered. It was also £80k more than the survey price, upon which the mortgage is based. I know the estate agents and the seller were very suprised by how much the successful buyer paid.

Then last week we heard that the people who live next door to this house were thinking of selling and we got in touch with them. We went to meet them and see the house and it's lovely, and pretty much identical in style and state to the one we lost out on. They are happy to sell privately to us, but were a bit reticent about naming a price.

So how should we proceed? Presumably they know what their neighbours got, but should we base it on this, just because some mad people paid way over the odds for it? Or should we get it surveyed use that as a starting point?

Any advice from anyone else who has bought or sold privately would be greatly appreciated.

Thanks in advance.

The people you want to buy from should get the house valued by 3 different local estate agents. Valuations are free and you are under no obligation to actually put the house up for sale after it has been valued by the agent. They should get a letter confirming the valuation from the Estate Agent. Then show them all to you and you agree a price that is the average of the three valuations.

The price that their neighbours house went for isn't very helpful given that those purchasers were prepared to pay £80,000 more than their lenders thought it was worth. You would have to have a mighty deposit for that (all very vulnerable if prices go down).

If these people are serious about selling privately then they will be prepared to go through this process in order to get an accurate valuation.

Thanks Twoisenoughmum.

What I'm worried with getting estate agents involved is that they will talk up the value of the house, given how competitive the lcoal market is. And surely much of their valuation will be based on what the neighbour's house sold for.

Well I'm afraid I can't think of any other way to get an accurate valuation on a house. I suppose you could look on the Land Registry website (I'm afraid I don't know the exact web address) and see what other houses have sold for in the immediate locality very recently. If the house next door sold "last year" then prices will have moved upwards anyway. The people you hope to buy from would be ill-advised to sell directly to you if they haven't had valuations from an estate agent. You appear to want them to sell to you without "testing the market" by putting it on with an estate agent. I'm afraid it is impossible for agents to "talk up the market" - a house is only worth what someone is prepared to pay for it. From a vendor's point of view, most ultimately opt for using an agent (accepting the fees involved, as they do) because they get a wider choice of potential buyers.

You can see sold prices on www.rightmove.com

You have to spend a few minutes registering with the site, but then you get access to all sold prices. Easy.