We think we have overpaid on a house...what are our options?

[Willowwood45]

What do you do if you think you have overpaid on a house? The house we have offered on was on the market for 575. It had been on for about 6 weeks so we made an offer of 550 and got it. However, since we made our offer, it has come to light that a house that backs onto our house sold for 500 this summer. The houses are identical in layout but the one behind our house has a large extension so loads more living space. It's not a modern, wow factor extension at all but it certainly provides a lot more space. The condition of both houses, from the pictures on right move, seems similar. The only difference is that ours is on a cul de sac whereas the other one in on the road...it is a very quiet road that leads to country lanes so minimal traffic. We don't know what to do.

1. Stick with it. Accept the market pre covid and pre stamp duty was very different. Accept paying a premium for a house with no chain. There are no other options for us at the moment, the market is drying up and we have first time buyers who have been so patient with us and who offered asking price for ours.

1. Wait for the mortgage valuation and see what it says. If they agree that we have over paid, go back to the vendors and explain and try to renegotiate at a later stage of the process.

1. Is it worth having this conversation now? Speak to the estate agent and say it has come to our attention that this house sold for 50k than we have offered. We don't want to over pay. There is a very real chance the mortgage valuation will agree with us so can we renegotiate now rather than drag it out?

1. Can we speak to the mortgage valuation people before they go and visit the house? How do they do their valuation? Do they look at the right move sold pages so they can see what has sold recently or do they just look at a printed list of sales in the area without looking at how similar the houses actually are? Can we say we are concerned as we have found out about this sale since we made our offer and make them aware of this house and ask them to look at it?

I am struggling to see how the two houses have been valued so differently. The house behind sold for 500...75k less than ours was on the market for and 50 less than we got it for. This is such a big price difference. I also spoke to another estate agent who valued our house and they valued it at 525, 25 less than we have offered.

What would you do?

An extension can drop the value of a house to me if it takes out too much of the garden, which is something people are valuing a lot more post-pandemic.

Hi OP, just to chime in on the mortgage valuation point:

We have good LTV on our place and needed to remortgage early in lockdown 1 due to fixed rate expiring.

The survey (for bank info only) came back with a valuation price that was £50K lower than the last time we'd had it valued by an EA, despite us having done some nice renovations since then (e.g. new kitchen).

We queried, and the surveyor justified it by saying "don't you know there's a pandemic on" :) global uncertainty etc, so he stuck by his prediction that if we were forced to sell, this was the current market value.

It made no difference to us since due to our LTV they were still happy to loan what we needed - but if we had been in your position, the surveyor would have answered your question!

So hope that confirms for you that doing nothing now and waiting for the bank valuation should hopefully give you the answer you need without pre-empting with the vendor and getting their hackles up.

(Do get a structural survey too for all the reasons PPs have said!) Good luck.

You’re a bit daft not to have done some basic research before offering. Your offer is your offer and you should stick by it or walk away now and not waste any more of the vendors time. Buyers like you make the process more stressful the. It needs to be frankly

You’ve put in an offer and it’s been accepted. You would be cheeky and immoral to now go back and tell them you’re reducing it. You were able to find out what the house at the back went for before your offer went in. If someone did this to me I’d tell them it was going back in the market and cheerio!

You’ve put in an offer and it’s been accepted. You would be cheeky and immoral to now go back and tell them you’re reducing it

I have reduced the initial offer on every house I have bought based on issues being found in the survey. Reducing an offer is not immoral.

You are not committed to going ahead at this price or any price. Nothing is sealed yet.

You could wait for the valuation....but I suspect you have decided you over-offered anyway and will still feel like this regardless of valuation. The thing is, you don’t absolutely love this house and now, at this point don’t feel you want to pay what you offered.

You need to decide if you actually want to move to this house first of all. Is it the house you want or do you need to just pull out because it’s not.

And if it is the house you want, what are you prepared to pay? Will you pay what the valuer puts on it or is there a chance you aren’t even willing to pay that or is there a possibility of you meeting mid way between a lower valuation and what you offered. This is what you need to decide.

It does sound like the survey and the valuation will be useful to you and help clarify your thinking. Until you have those, you perhaps don’t know what you’ll be prepared to pay and won’t have any basis to go to the vendor for further negotiation.....so wait for that info.

Once you’ve got that info, make a decision about a range within which you will pay. Go to the vendor and make the lower offer explaining your reasoning. And then see what happens.....they might turn you down out of hand and the sale falls through, or they might negotiate and push you to your new upper limit or they might just say yes.

I don’t think there’s a problem in renegotiating in light if valuation and survery. The market is changing fast and vendors might not like it but they need to expect it. To be honest, buyers are foolish to ignore something like a lower valuation or falling prices or problems in a survey. People shouldn’t just be looking for a lower price for no reason after agreeing a price, but that offer is very provisional and on the basis of valuation and survey....subject to contract. There is no moral obligation to complete at a price you offered which turns out to be wrong.

So, to start renegotiating now without more info might be premature and fruitless. Wait for full info and then consider again and renegotiate if it seems right then. It’s a business transaction and you do need to look after your own interests and nothing has been committed to u TIL exchange. This period is for gathering further info and prices often adjust to reflect it. Those who get furious about this happening don’t appreciate the workings of a market and are too personally involved and lacking objectivity, in a way which isn’t helpful.

Just read of all these replies. I really appreciate all these opinions. Thank you so much for helping me to make sense of it all in my head.

Just to clarify, we did all the research we possibly could. We knew about the house that had sold two years ago but had no way of knowing about the house that had sold this summer. It was no longer online when we were looking in this area and the land registry has only just been updated. Unless there is a way of finding out this information in-between house listings going offline and the land registry being updated? If there is, I would love to know so I can make sure we do not find ourselves in this position again. Nothing has sold in between in the local area and the conversation with another estate agent where we found out they had valued it for less also happened after our offer had been accepted. We had no way of knowing which local estate agents had valued it prior to it going on the market.

We do not love the house but went into it knowing that. We have had a nightmare trying to make this move through no fault of our own. This is the 9th house we have tried to buy, we have been gazumped, we made an offer on a house and then had the buyers change their mind about moving later down the line. One set of vendors couldn't find anything and we ended up losing one set of buyers as a result. It has been a nightmare. We are so tired of it all and, in some ways, just want to move. So we don't love this house but we need to be realistic. It ticks a lot of boxes and I think we could be very happy there, even though it's not the type of house we thought we would go for. It also has no chain...it is currently empty and that, in itself, is enough of a reason to stick with it after our experiences over the last 15 months.

I have to admit, I didn't realise cul de sacs can demand so much more. Or garden orientation...this house does have a south facing garden. Good to know and has certainly made me feel less worried that we are overpaying by that much. Maybe a little but, to us, no chain is worth paying a bit extra for.

@Willowwood45 sounds like you've had a pretty rubbish time selling/buying houses. Fingers crossed this all goes smoothly, and that in time you can decorate and adapt the house so it's closer to being your ideal home.

@EssentialHummus

I doubt an estate agent would put something on the market for 75k more than they should - they also want to sell it!

Exhibit A, Foxtons.

Oh it is not just one estate agent, I believe they all do it.

When selling our house several agents suggested putting it up for sale at a price with the idea of selling it for a bit lower.

Now renting, our landlords wanted to sell, asked us if we wanted it at 135k, we negotiated 130k, we backed down because of Covid and they put it on the market at 150k.

Don't underestimate the value of a chain free move. Much less stressful if you are the top of any chain.