Offer accepted but think we are paying too much!

[RaybanRose]

First time buyers here, we saw a flat we loved and decided to put in an offer.

Listed on Rightmove at 'Offers over £200k' so we were advised to offer at £200k.
Seller declined and estate agent told us he was looking for £215k(!), and that he had previously refused offers around £205k.
We said we would go to £206k.
Estate agent said he had declined again but said he thought if we added one more thousand he would accept.
So we offered £207k and our offer was accepted.

But we are now worrying we are paying over the odds and that we jumped in too soon. We're worried we were too eager and they took advantage of that. The flat has been on the market for a while, listed on Rightmove as the price being reduced in June, though we don't know how much it was reduced from.

When we told our mortgage broker about the price he assumed there was a battle between us and another buyer which explained the 7k increase, but it was just us!

Nothing has been signed yet, we have literally only just had the offer accepted so we aren't tied into anything and it is still fully listed on Rightmove.

What are our options? What would you do in this situation? How do we find out if we are paying too much before we get too far in?

Any advice you could offer would be greatfully received. We have our second viewing tomorrow. Thank you x

@mumsy27 is you say so

Do you want to buy this flat?

Can you see yourself living there - would you be happy?

The cost of that is £207k.

The estate agent isn’t going to tell you you’ve overpaid or underpaid. He works for the seller.

A mortgage valuation will help but they aren’t going to go into the details of £205k vs £207k or even £200k.

I’d stop fixating on the £1k here or there and decide if you really like it or not.

It seems really common at the moment to expect offers over the asking price. One of my dc has recently bought a place and paid 10k over (there were loads of viewings and people interested) and it was the same with every house she offered on (all over asking price)

I think it just comes down to whether there is much else similar on the market, how much interest they had in the property and how desperate you are to have it? If you think it's not worth the money just withdraw your offer and keep looking.

If you’re not sure, then withdraw your offer. Keep looking. Don’t buy and regret. The mortgage valuation is unlikely to reduce by just a few thousand so that won’t help you decide if you are paying over. Also, add up the monthly/annual payments for ground rent, leasehold costs, sinking fund etc.

Also don’t expect the estate agent to tell you the truth on any recent offers etc. They want the most profit on the sale. If there had been any viable offers and the flat was a steal at that price it wouldn’t be available now. The vendor is going for as much as he can, I know a house sat on the market for over a year until the vendor took £1000 less than the asking price. Vendors can be stubborn.

I’d imagine it was originally on for 215 and was reduced to overs offer 200 after some time on market. He probably still wanted the 215 but comprised half way at 207. Seems fair enough to me. You’re probably overthinking but it’s scary being a FTB, it’s HUGE sums of money. As other PPs suggest, find out the recent history, check other property prices in the area etc. It doesn’t sound like you’re overpaying on the face of it but you need to do some research. The survey will also help you understand if the property has been overvalued too, if you get that far.

I mean if you hadn't offered that you wouldn't have got it 🤷‍♀️ Offers over means offers over and you got it for less than 5% over. Not to bad in my eyes

Can you have a look on nethouseprices.com or our property.com to see what similar flats on the same street have sold for recently?
There's always a fear when you're a first time buyer that you've made a mistake or stretched yourself too much.
Our big regret was not spending a bit more to get a property with a loft conversion and a bigger kitchen. It'll probably cost us 4 times as much now to do the work ourselves.

If it’s a long term purchase then a few grand is neither here nor there as long as you have the extra £7k in cash- remember your mortgage provider won’t lent over their valuation.

Much prefer the Scottish way of home report so everyone can see survey value up front

[quote Wanderergirl]@Twiglets1 flats are simply not selling at the moment, anywhere. There is no value that it used to be in them, because of a very little demand. And the red flags are all over the place, even developers can't sell theirs whilst they have HTB and this 95% thing now. So it is correct to assume that majority of the flats are overpriced right now. Also the fact that seller deleted old listings, no history etc. just sounds bad. And so obvious that things aren't right. OP is FTB and if they are after the flat, now is their best time to buy from desperate sellers in order to secure the best price. Rather from someone who even dares to ask for offers over for a flat [/quote]
What the hell are you smoking girl 🤣🤣🤣

29% of all dwellings in the UK are flats or bungalows (no idea why together in statistics, but vast majority are flats). So around a quarter of UK properties are flats, and obviously that varies hugely by location—e.g. in London 43% of the population live in flats.

And some self appointed expert thinks that flats are literally worthless and unsaleable 🤣 yes, 1/4 of the UK and 2/5ths of Londoners are literally going to live on the streets because flats are not even better than homelessness 🤣 right…

Let the bank do the valuation and see what happens there. That's the best way of knowing

@Wanderergirl we were outbid on a flat last week which went for around 18% over the valuation. 2 other flats in that street alone have sold within a week recently.

Your point might apply in London at a push but certainly not ‘everywhere’

@Flowers500 you must be a bitter flat owner in London then

Flats selling quickly where I am.

Honestly its nothing.

I know that sounds crazy but its like going to the farmers market; buying a £2 sausage roll and quibbling over 7p. Percentage wise thats what your dealing with here.

Yes 7k seems like a lot in cash. It is. But its not cash, its a mortgage and your spending hundreds of thousands on a home.

If it makes you feel better I spent 50k over value on my recent purchase. And that did have to be cash difference because the mortgage wouldn't cover the down valuation.

Try not to panic and keep a bit of perspective.

Congrats on your offer accepted

[quote Wanderergirl]@Flowers500 you must be a bitter flat owner in London then [/quote]
Seriously, what planet do you live on? 🤣🤣🤣 it sounds like you read a property supplement once a few months back and that’s the extent of your knowledge of the residential retail market…

In the city my nephew lived in till very recently (not London) there are hundreds of flats for sale and few houses. Pre-Covid his flat would have sold in a week, but it recently took some months and a price reduction.

So many are leaving the city to live in a house with a garden, which is exactly what he and his partner are doing, and fewer young professionals who usually buy these flats have found jobs in the city in the last year.

What Wanderergirl says is certainly true of some places.

@naturealwayswins

In the city my nephew lived in till very recently (not London) there are hundreds of flats for sale and few houses. Pre-Covid his flat would have sold in a week, but it recently took some months and a price reduction.

So many are leaving the city to live in a house with a garden, which is exactly what he and his partner are doing, and fewer young professionals who usually buy these flats have found jobs in the city in the last year.

What Wanderergirl says is certainly true of some places.

Oh yes definitely!! The thing is it's quite a complex picture--"flats" covers a huge range of different properties (FTB, investment for private rent, investment for students, luxury city property, International investments), including those with outside space and those without. There's also a lot of competing trends over the past 2 years, plus the artificial affect of the SDLT holiday.

There have been property markets that really struggled (most notably in 2019-20), in particular the central London luxury flats that were too expensive for international buyers without viewing, as well as the small pied a terre types, and a lot of the flats that would typically get mopped up as student investment flats. Also a time of uncertainty for London rents with the exodus from the capital meant some smaller investors decided to get out of the market. Plus it was a hard time for typical FTBs, many on furlough or not wanting to commit at a time of flux.

VS a big boom on detached properties in particular, which you could barely view due to a different market jumping on themdue to desire for extra space, plus the stamp duty (NB: cheaper flats didn't have a stamp duty boom as the amount payable was so lowthe sweetspot houses went MENTAL with the stamp duty cut, which is kind of an artificial price rise as people were paying similar, just in added price not stamp duty).

However rents in cites have already started trending upwards again and demand for central living has increased, as had demand for student accommodation. The bouncing back of hospitality in particular is going to mean more demand for smaller properties and more lower paid people with greater certainty for the future, hence demand for flatsapparently there is already a mini-boom in FTBs (I personally know multiple people who held off buying during the pandemic and are now starting to view). Demand for flats apparently went up 39% between jan and April this yearmore than demand for houses in villages. While prices in central city locations are good for buyers, they have started increasing in the past few months due to FTBs.

Some interesting recent analysis:
www.propertyreporter.co.uk/property/ockdown-sees-a-fall-in-demand-for-apartments-in-central-london.html
www.mortgagestrategy.co.uk/news/flat-prices-edge-up-1-to-277000-since-pandemic-rightmove/
www.express.co.uk/life-style/property/1479673/rent-prince-warning-london-average-rental-costs-evg

www.thetimes.co.uk/article/is-now-the-time-to-buy-property-in-uk-city-centres-g56rc29xz

But anybody who claims to know simply by the fact that "it's a flat" that it's not worth anything, doesn't know what they are talking about!!! there are some subsections of the flat market that actually boomed in 2020

Download the Property Log extension and it will tell you the price the flat was reduced from.

@RaybanRose

The seller has lived in the property for 20 years+ so he is making quite a profit on what he paid back then as you can imagine

As would have anyone else who has owned property for 20 years.

We once got a bit carried away and felt we had offered too much. We decided we still wanted the house but I found I couldn't get over it and it nagged away at me.

The structural survey came back and revealed several serious issues. It was actually a huge relief that we had an "excuse" to pull out!

There will be other properties. If you're feeling like this now then unless it's perfect in every way and you NEED to buy right now, I think pull out and wait for something you can get properly excited about.

@Flowers500 are you saying after reading these articles you are now some kind of an expert? I am not going to fight you on your knowledge you believe in. But It is clear as a day that people can negotiate flat prices hard at this given moment and that’s exactly what I was saying. It is buyers market in regards to flats, so it would be silly not to take on that opportunity for ftbs. The reason why it is impossible to do so with some sellers, because they can’t make their prices low enough and simply are stuck in their flats. Quite few unfortunately are sitting in negative equity, because their flats simply wouldn’t sell for the price they need to get their money back at least.

Rent prices are definitely not going up, not sure where you got that fact from. If anything the choice is endless in London at the moment.

And as someone mentioned before, a lot of young professionals and ftbs are happy to rent flats in London, but don’t want to buy them.

I’m not denying statistics about % of flats vs houses. But you’ll find that a very big percentage of flats are rentals. And the ladder concept doesn’t work as well as it used to.