House on the market for a lot higher than average street price - should I try a low offer?

[CatAndHisKit]

I've booked to view as it's a contender but having looked at sold street prices, I think the agent may have overpriced it. It's a terrace with no off street parking but nice size Victorian houses.

Average prices (last year, several sold) is 45K below this one, they wree all built as 3-beds, but this one has a loft conversion (not done by currrent owners) and one of the bigger bedrooms was separated into two by current owners. They've added a downstairs loo nicely done.
To me this doesn't translate into 45K difference! It's otherwise in good order but not to of the range anything, just prettily decorated.
I'm interested in the location and the general size but would actually prefer second bigger bedroom instead of two tiny ones.

I think they think as they can list as 5 beds, it warrantsa a uch higher price, but it's not really a 5-bed iyswim.

So would it be cheeky to offer half-way - instead of 45K over the average, offer 25K over, but that's a 20K discount off asking price! Would they tell me where to go? [grin[ even though I think it's a good price well over steet average...

*not top of the range

oh gawd...that was supposed to be a

Probably depends where you are in the country, I'm in London and a loft conversion alone could easily cost £45k here!

If I've understood correctly, this is a 4-bed (if we consider the two small rooms as the one room they were)? Plus a downstairs toilet the others didn't have?
If so, I would say that 45k more than a similar 3-bed is very reasonable, but no harm in offering a little less. Hard to say without knowing the asking price.

I think it depends on the value of the houses - 45k for an extra bedroom & downstairs loo in an area where houses cost 800k is much more reasonable than when the baseline is 225k!

There is no harm in making an offer. But they are under no obligation to accept it.

A loft conversion and a downstairs loo here would translate to another 40k here for sure. I don't think splitting a large room into two would add anything to the price, but it just might make it appeal to people who need an extra bedroom or would prefer a separate study etc.
If you don't think the loft conversion is worth the extra I think you might need to look at houses that haven't had the work.

But having said that, you can always offer what you think it's worth - you never know what they'll say. I can't see a downside to trying.

Where I live an loft conversion and extra loo is worth at least that.
If someone offered me that little it might put me off them even if they then came back w subsequent offers.
Depends how much you want it really?
I'm seeing prices going up and selling v quickly since theyve gone on market over the last month.

It would not be cheeky OP imho. They probably set the price there specifically to give themselves room to accept a lower offer that was still above average price. So you going in with an offer £25k above highest price sold last year plays right into their hands. They might counter to squeeze more out of you, but they won’t reject it.

Honestly though, I’d offer what you think the house is worth given current market conditions. In some parts U.K., house prices are 5% lower than what they were last year. So check the market conditions. Also think what are you willing to spend based on how it compares to not just same street but similar neighbourhoods. Is this a neighbourhood that is on the up? Or on the down?

I also think the bedroom divided into two tiny rooms actually warrants a price reduction, not any increase, because it will cost you money to put it back how it was. Especially if the property is listed and they did it without proper planning approval.

Make the offer. You dont lose anything and they can always say no.
Ive read that if your first offer doesnt embarrass you then you went too high!
You can always increase if necessary. Much easier to go higher than backpedal!

Our loft conversion cost almost 100k (we found the previous owners invoice)

Attic conversion and nice downstairs toilet sounds like 45k to me.

If you don't care either way low ball it. If you want it/love it I'd think hard before going in too low.

Also with mortgage holidays expiring and extensions hard to get, the market may soon be flooded with people selling due to Covid job loss. Similarly, fewer people will be in position to buy for same reasons. So you might find a property that you like more for same or lower price if you keep looking.

Seems a reasonable difference to me , but as we are not the sellers we can’t say what their reaction would be. Offer and the worst they can do is say no.

@PlanDeRaccordement

Also with mortgage holidays expiring and extensions hard to get, the market may soon be flooded with people selling due to Covid job loss. Similarly, fewer people will be in position to buy for same reasons. So you might find a property that you like more for same or lower price if you keep looking.

The key words here are “may” and “might”.

What the poster has failed to point out is that it “may” also go the other way and you get priced out. The economy is reopening and there will be pent up demand.

Depends what the 45k is on top of.

45k on top of a 350k+ house is reasonable for the additions you've listed.

45k on top of a 100k house is not.

Well OP, Bluntness may have a crystal ball in saying you’d be priced out merely for looking around for a few months. But at least my advice is the same as what all the housing market experts say..
3 Jul 2020 www.loveproperty.com/news/96730/expert-predictions-for-the-uk-housing-market-for-the-rest-of-2020

“House prices may be increasing modestly right now, but they are likely to fall precipitously this year. However, expert bodies differ wildly when it comes to forecasting the severity of the slump.

Research conducted by the Royal Institution of Chartered Surveyors (Rics) is among the most optimistic, predicting a fall of just 4%. Lloyds Bank anticipates a 5% drop, Knight Frank expects a decline of up to 7% and Savills similarly estimates a reduction of 7.5%.

The more pessimistic forecasts include the Bank of England, which suggests a 16% fall, while analysts at investment banking firm Jefferies believe prices could slip by as much as 20%.

With ONS data showing deaths in 2020 so far have exceeded the previous five-year average, a spike in lockdown-induced divorces expected and unemployment increasing sharply, property guru Kirstie Allsopp and FT Money editor Claer Barrett agree that the market will be driven by the 'Three Ds': death, divorce and debt. This partly explains the expected fall in house prices across the nation. "You will only sell your house at a marked discount when you really have to,” says Dr John Boyle, a housing economist at Rettie & Co, “when you can't afford the mortgage, lost a job, marriage breakdown, etc."

More info if you follow the link. Just remember many many people bought homes at high prices right before the 2008 crash.

But at least my advice is the same as what all the housing market experts say

Nobody has a clue right now, they're all guesiing.

A quick Google shows you the extra bedroom (and downstairs loo) is worth £45k:

The national averages for two-, three- and four-bedroom homes
1 Two-bed: £255,172
2 Three-bed: £283,706
3 Four-bed: £426,099

But the additions would have cost the vendor the same whether it was a 100k house or a 350k house.

Well OP, Bluntness may have a crystal ball in saying you’d be priced out merely for looking around for a few months

Eh what now? I think you’ve misunderstood or misread my post. I said it may go either way. This is the point. No one knows. There is no guarantee it will drop, it could also increase. It is always a risk to wait because there is no guarantees.

Madly posting links and lashing out isn’t going to change that.

I think with the loft conversion it will also depend on whether you think it has been done well and as you would have done it, or if it was a botch job.
Also check if the right permissions/building were granted
Proper loft conversion done well and proper downstairs loo I think would be worth 45K in terms of what it would cost you if you were going to do it
Agree that the room division is a bit crap but probably not too ££ to take out.

Can you look up on Zoopla or similar, what the current owners paid for it?

PlanDe this is exactly my thining (your 1st post), but whether it's the vendors', who knows. Thanks for the links, yes I know that some predictions are scary but this is a low price region so wouldn;t be affected as much as others.

Thank you all for replies! CAn I reiterate that the loft conversion was NOT done by these vendors. All they did is alter the entrance which looks very amateurish.
I did look at the prices - they paid very little for the house, way lower than the street average actually but the house was in a state (but still with the loft).
Also please note this is East Midlands we are talking about so whoever said that the average for a 3-bed is 400K+, haha, it's less than 200K here unless a stunning house or a detached.
45K is a very big difference when its around 200.

Guess what. spoke to the agent todsay and mine is the only viewing booked - as I thought it's overpriced for sure because ther is a lack on the market of nice-ish houses and this is one of them, and there is no rush at all.
Not sure if the area is on the u what with covid/recession looming. Going by prices sold it was up about 7yrs ago but a bit down last year (brexit also?).

Fnnily enough today two more houses came up in same price range but much better decorated, though fewer bedroom - one has a large undivided bedroom with exactl the same layout.

But it seems to be the same story - they aer well above street averages, both. Maybe it's some sort pf local tactic so as Plan said they create an illusion that your 'low offer' os accepted but it's not actually low factually. Strange because where I am now places aer not overpriced and fly off the shelf, some go into bidding.

I feel like making low offers on the other two now and of that doesnt work than on the original house in my post as it's worth less even with a bedroom extra.

sorry for so many typos! believe it or not I can spell but I think I got overheated with all the property research online, my focus is gone.

I think a home is only worth what it is to the buyer.

But I disagree that the decor per se reduces the value. Most people redecorate to their own style.

Likewise, whether you like it or not, the room with divided bedroom is a home with additional bedroom, us loft conversion and downstairs loo. Your assertion is like saying that two of the exact same car but the one with a caravan attached isn't worth more!

Apart from the loft conversation, you are getting the same ground footage as the other houses.

If the loft conversation was done previously, how much more did your sellers buy the house compared to houses sold at the same time? Was the difference the same, or less?

You can offer a reduced price, and they can either accept or refuse.