Valuation figure v previous price paid

[3asAbird]

I know its really hard to say as different areas / different markets and circumstances.

But what do sellers consider as decent return on investment per year?

Do sellers have a figure in mind ie I be happy if I get 10k for every year I have been there.

I have seen a house thats massively overvalued.

Brought 7 years ago £139k
Listed 290k
Agents said seller has 275 in mind.

No house has ever sold that rd and recent sales come in at under 250 for similar house just smaller gardens.

Thinking making cheeky offer what i think it's worth as 1st time buyer ready to go.
It's ex local in still not great area.

If I offer 245k thats 15 increase ever year
Seller posted at 290 that's massive 21k increase per year.

175k which indicated what the seller wants is a tidy 19k a year return.

When trying to negociate is it useful to work out difference between what they paid and what they listed and if the range is huge and year on year figure is high there maybe room for movement and deal made.

We looking at loads but 1 estate agents is over pricing every property.

Definitely can't factor %profit into your calculation. We bought our house, last year, for all of 1% over what it had sold for, freshly extended, 10 years previously, and 10k less than the previous owners had bought it for, 3 years previously. That 10k is what it cost to make it watertight as it had been rather neglected over the previous decade.

House prices in our area were decimated by the recession and haven't really recovered since 2008.

Houses sold on the same road maybe overlooked by other houses due to position, or be near the end of the street meaning there are double yellow lines and lacks parking.

We got a deal on this house because we had cash buyers so there would only be 2 houses in the chain, our 3 bed and the 4 bed we were buying. That means we accepted a lower asking price from our buyers and the vendors accepted a lower asking price from us.

When we moved here the local primary school was only "good" and was heading towards "requires improvement" meaning house prices were cheaper. Fast forward a few years, the entire school was rebuilt and is now outstanding so the house prices have increased a lot because houses near us are now in catchment for the outstanding primary.

Sometimes people take a reduced amount, my FIL knew his house was worth £25-30k more than the exact same house next door. But that was a probate sale and the family wanted a quick sale, so how on earth can my FIL then justify his asking price which is higher? Sometimes factors that you are unaware of affect an asking price, a quick sale needed, no chain, cash buyers etc.

You are overthinking the "investment" angle. I have spent £25k improving a property and saw no return on that due to the market at the time. I am buying a house to be my home, not an investment property.

A big garden can add to the value quite substantially, but you're right, some agents do overprice & clients do too.

Forget what this one was bought for though. It could have been sold between friends or from parent to child at a steal. Researching the competition is sensible but what someone else paid a while back, in circumstances you have no idea about, is irrelevant.

How much the seller paid, and the profit they are making, is irrelevant to how much a property is worth. It is worth what someone will pay for it, and as long as the bank valuation supports that price - ie it believes it will get its money back if the borrower defaults - that is what it is worth. Our first home we got a nearly 100% increase in value over 5 years. All the changes we made were purely cosmetic, it was simply due to what the (crazy London) market was doing in that area at that time.

Its clearly not for you!

Every house bar one has been bought with head (within reason - locality to station etc, and no structural issues) except one that made perfext sense on paper so I renovated it and we flipped it and changed our retirement plans.

OP I think you are coming across as quite naive and if you share your rationale with the EA/ vendor you will come across that way. It’s really none of your concern how much they paid and how much money they stand to make. You will just put people off and they won’t take you seriously. You should be offering by comparing to what else is on the market and recent sales prices for similar properties in similar areas. School catchments can make a huge difference to house prices only 1 mile apart- so this must be factored in too.