Difference between asking price and value?

[Mandy21]

I know, its a bit of a stupid question, but how much (at the mo) do you think the difference is between an asking price and a real value (i.e. what percentage of asking prices are the actual price paid?)? 95% ? 90%?

Reason for asking is that house 2 doors down from us has just gone on the market for £55k more than we paid (about 17%) less than 2 years ago. We paid just more than £345k, house has gone on for £400k. Exactly the same size / layout except we have a garage (they don't) and we have a slightly bigger garden. The neighbours' house is in better decorative order because they don't have children they've done a lovely job of decorating / have been in for quite a few years.

We're about to remortgage and have assumed its still worth exactly the same, so apart from the fact we've paid some off the mortgage, the size of the deposit that we have hasn't changed that much (i.e 15%). If it were to be valued at say £360k, we'd probably be able to get a better remortgage deal because we could say we had a 20% deposit if you see what I mean.

Sorry, probably a "how long is a piece of string?" question!!

I think it varies so much from area to area that you need to research it locally, the house behind mine just sold for 125, was advertised at 150, (thats £70k less than I paid 3 years ago ).

I would get a few local agents out to value your house. It might be that your neighbours want top dollar and are advertising higher, or it might be that the value has held/increased in your area.

Have a look on zoopla and upmystreet at sold prices on your street etc for another idea.

Generally I think 10% less than asking is pretty normal atm anywhere outside of the SE/london.

Gosh, it depends on so many things. Have you tried one of those websites that show sold prices?

Also bear in mind that, in this market, a lot of people want to feel they got a bargain and expect to take a lot off the asking price. In my area of London, that is pushing up asking prices, but not necessarily sale prices. People are factoring a 10% discount or whatever into what they ask for.

value is what someone will pay for it.

Asking price is a guess.

A question without an answer. I've seen houses recently that were priced pretty close to what someone would pay while others have been 20% off.

There isnt a percentage answer to this. Some houses are given an optimistic asking price, others are priced to sell.

Thanks for the answers, I knew the answer was really "it depends" but even if the sale price is 10% less than the asking price, that still means ours has probably increased slightly. Will ask a couple of agents to come and value it.

What estate agents say the value of a house is is likely to be diferent from what a surveyor says, as they will sometimes overvalue in the hope of flattering you into selling the house with them.

I agree with cats, the estate agent valuation won't count for anything. It's the mortgage lender valuation that matters, and that can be way under anything an ea guesses.

Having said that, when we recently remortgaged I guessed a valuation and the bank seemed quite happy with it.

Have a look at sold prices in the area over the last few months for houses that are similar to yours. That is the main thing the valuer will look at.

If nothing like yours has sold, there will be even.less for the valuer to go off, and they are more likely to just apply an approximate local % difference in value from when you first bought.

Have details of any improvements you have made, as this can support a higher value.

Just remember to check the valuation report when it's sent on to you (ours missed out rooms which fundamentally changed the style and value of the house), and that you can challenge the valuation if you disagree.

Sold prices in your area are the best guide - as pp said, that is what people actually did pay, rather than what someone hopes someone might pay.

FWIW a friend recently offered full asking price on a house the first weekend it was on the market - as did 5 other couples. But we're in London and around us most elements of the housing market are pretty buoyant just now. Equally despite that sort of a market in places I still see things priced high, reduced considerably, and sitting on the market for months.

Like you say, there are an infinite number of variables, but I know when we bought almost 2 years ago, it went to a bidding war. Things are bouyant here too. Didn't realise you could see asking prices on some property websites - just had a look. 4 properties have sold on our particular road since we bought, all went for between 94- 98% of the asking price.

We sold in the SW in 2010 at 95% of asking price and recently paid asking price for a house. (Prime location/good price and more than one full asking price offer but we were the only non chain buyers! Relieved that it didn't go to sealed bids on this one.)

Your bank will have a valuation on their system for your current mortgage, so ask them for advise under guise of we want to remortgage and are identifying key facts and costs.

We are selling and we had a meeting with a mortgage advisor at our bank to do this before we had our house valued by estate agent and put on market.

Mortgage advisor told us how much the bank had our house valued at on their system and we were shocked as it was much more than we had estimated which meant we could get a better mortgage deal. It turned out to be similar (within £2-3k) of estate agent valuations we later got.

When we remortgaged, we found the biggest differences between rates was between 20-25% deposit. If you can up the value of your property/lower your mortgage % to 75% or less, it makes a much bigger difference than between 90 to 80%. Get an estate agent round, get a broad valuation & go online to find the best deal. They'll send their own valuer round anyway, so whether someone would actually pay that price isn't totally relevant!!

Oh and, we found that most estate agents just wheel out the data you can find on the internet yourself to value a house. So if you know that the average sale price is x% of what they're asking for, then that's probably what the estate agent told them, but they're putting it higher in the hope they'll get it/won't get talked down too far...