Overpriced house?

[ButterflySandwich]

House we like is on the market at £495,000. Our offers of £465,000 and £475,000 were rejected. When considering a higher offer, we did some research and discovered the house next door sold only 2 months ago for £160,000 less. Google Earth shows that the houses are virtually identical in size but the one next door has a slightly larger garden. Rightmove shows that, inside, it was in need of modernisation and according to the EA (who asked the vendors), the owners were divorcing and were heavy smokers . But probably nothing more than £20,000 worth of work. Zoopla estimates the house value as £445,000 to £465,000 (but we know Zoopla isn't all that reliable).

I had a chat to our builder neighbour, who felt we shouldnt be paying more than £400,000 for it. He was horrified at the overpricing, particularly as the area isn't as nice as where we are now in the same town and the houses aren't as much here comparatively (none available right now but talking recent sales). He also said that we'd find it hard getting a mortgage due to the massive difference in prices.

So... what should we do next? We like the house but are very confused as to what is best.

Any suggestions?

Sorry, Zoopla estimate was for the house we like. not the one next door!

Walk away. Sorry.

IMO vendors who try to sell their house at an inflated price won't accept an offer unless it's very close to or at asking price. We came across an ideal house in which the couple were going through a divorce and as such were unrealisticaly looking for the maximum they could get. This house is still for sale nearly 13 months later.

Yes, walk away. I know people who have named a high price and they are prepared to sit it out, they have no intention of reducing.

People can ask what they like, regardless of the general market price.

Yes it's what we're thinking but it's just what we've been looking for.

There is nothing more frustrating than an obstinate, unrealistic seller or landlord of the house you want..The last thing you want to do is overpay by that much.. Sympathies!

Although we never met the vendors, we thought they'd be good to negotiate with as they are obviously good practising Christians (no tvs. or radios or computers, just pianos and guitars and bibles). How wrong we were!

Perhaps they are not very motivated to sell? Have they indicated if they have found something?

No they will start looking once got an offer they like. We're ideal buyers as we plan to rent out our existing house

When we bought ours we had a similar situation with our vendors. When we offered our final offer and they rejected it we left it sitting on the table for a specified period of time after which it would expire. Five days later the EA rang and accepted on their behalf. Our final offer was £25k under their asking price and their property had been on the market for over a year.

We're just not sure what is the best to offer now. we've been looking at houses for a long time now and tbh, we thought it was reasonable for a house in good decorative condition with over 1800 Sq ft. All the houses we've seen that are 1200-1400 Sq ft are around £400,000.

A property is only worth what someone is willing to pay for it. Vendors can ask however much they want to.

Your builder neighbour isn't the one to advise you re a mortgage - you need to speak to a professional.

If the price is non-negotiable and you don't want to pay it, walk away.

Do you know how long it's been on the market OP? I'd second all the other views that you should walk away unless it's worth £495k to you and you have a very large deposit, and can afford to overpay by close to £100k. Remember if you pay the asking price and then need to sell, you won't get the offers you need to not lose out.

Someone I know has been trying to sell a house for close to £800k for several years and have received no offers except one for £700k, which they rejected straight away 'because I'm not giving it away'.

Realistically it's worth no more than £650k, but they won't drop the price and are simply waiting for someone with more money than sense to come along and buy it from them .

Even worse, at that price level, you have to pay the EA upfront for marketing, whether it sells or not, so I dread to think how much it has cost them in EA fees and mortgage interest in the several years since they rejected that offer.

The house next door sold beginning of Nov. Vendors put the house we like on end of Nov

But Christians arn't doormats. What on earth had being a Christian got to do with anything.

where is it? what's the market like? houses around here have been rocketing in price so if that's the case where you're looking, it might not be so delusional. but if the market's less crazy, it could just be greed.

So it's 1800 Sq Ft, and everything else you are looking at are 1200-1400 Sq Ft and priced at £400,000? Are the smaller houses actually selling at that price?

You can't assume the house you want to buy is overpriced as it might be that the house next door was underpriced and sold in a hurry. You work out its value by comparing it to the entire local market and not just one single sale which could simply be an anomaly.

Oh no I didn't mean to be offensive by that, not all. I just meant that when you go and view a house, you know nothing about the vendor, and if you see they are religious (any religion), you automatically make (positive) assumptions about their values and beliefs, that's all. Sorry if I offended you

*not at all

house prices are determined by the market - supply and demand. Therefore if this house is overpriced, it will not sell. However, if people want to live in the area enough and buy that house, it will sell.

The situation of the house sellers and their willingness to negotiate depends entirely on their situation. If they are in no rush to move and in a sense are controlling the situation (e.g. they haven't found anywhere they want to move to) and also need to realise a certain amount of cash they are not going to want to take a reduction.

By the way - from what you have said the houses you have been comparing are 25-30% smaller (and consequently 25-30% cheaper!)

Looking at Zoopla to compare - very unreliable (as is builder). You need to get a sense of the market in the area by talking to the more friendly agents. Where I live things have been going over the asking price and closed bids in a very small area. You wouldn't necessarily see that on Zoopla

Thank you all for your comments. My Mum said (and as we all know, Mums are always right), they rejected our offer and if we won't offer more than we have to accept that and start looking again. Just frustrating, that's all

House up the road sold fairly recently for just over half what I would see as "market value". Reason being that the owner was selling on to her daughter. Sometimes there is a hidden reason for low sales prices.

If you are looking at houses of 1200-1400 sq ft for £400k, then that suggests a market value of £285-£333 per sq ft. Giving a rough price range of £513k-599k for this house. Suggesting not so much that it is over priced, but that the neighbouring one was underpriced for some reason.