House valuation

[Iammetoday]

Estate agents valued house we want. 2 different quotes. 1 £400,000 other 425,000. We've agreed a price with owner of £380000. Had valuation from mortgage company at £375000. Do we try to negotiate more? What would you do?

A house is 'worth' what someone offers for it, the valuation is only averaging what other similar properties in the postcode have sold at + condition of house.

It's dangerous to overthink the market and make predictions. Many people being keyboard warriors back in the early 2000s are still waiting for a big crash...many of whom who could have paid off their mortgages by now...

I'm worried poor old Crashy may have been one of those keyboard warriors from the early 2000s, still hoping for a crash 😥

Many people in the late 90s thought adding "Dot.Com" to a company name on a basic website made it worth 50 times earnings, we know what happened next..........people have been seduced in a similar way with cheap debt flooding into property, they thought it could never end, well it just ended........If you had a mortgage 20 years ago and paid it off I am genuinely happy for you, but please dont encourage others to overpay for property now when houses cost so many more multiples of their income. The good news is that the banks will no longer let most people overpay for a house, and that is excellent news for society TBH.

How do you define overpaying, though?

If you purchase a property for X amount and you have the budget to pay the deposit and mortgage payments, I fail to see how you're in a better position not buying and 'waiting for a crash'.

The right time to buy is when circumstances and budget allow, not waiting for a crash.

Negative equity will be avoided by many if a crash did happen (unlikely) then owners will sit tight.

But this doesn’t take into account that paying a mortgage is, in effect, saving money. At the end of paying it off, you have an asset that can be sold, recouping at least some of the money (and for many people, much more than they paid). At the end of renting, you have nothing to show for it. And mortgages are also finite things - you will pay it off and have free accommodation for the rest of your life (barring repairs & upkeep). Renting is something you will need to do until the day you die - so short term you might pay less, but overall you will likely pay much more.

Paying a mortgage isn`t saving money, that is a very dangerous myth that will have cost a lot of people their financial future, paying a mortgage is paying a debt back, "savings" should be liquid and accessible not relying on a buyer and a bank to tell you how much of your deposit and "savings" have vanished into thin air.

I would define overpaying as paying a price for something that depending on many factors outwith your control could cost less in future, I get it that people dont want to wait years to buy a house, but the nearer you get to the inflection point of a change in the market dynamic (rates rising for example) the more you are overpaying. Sure some people will be able to afford their mortgage repayments but I would say a LOT of recent buyers wont be able to.

That is only the case if house prices crash and never recover. It has happened, and I know some people are hoping it will again, but it might not (and for many, many people they make their money back and then some when they sell) whereas it’s 100% guaranteed that renting is giving money away that will never be recovered. Of course a mortgage is paying back a debt - but it’s a debt from buying an asset.

This is only problematic if you have a short-term or investment approach.

If you're looking for a home to serve you for a number of years, the temporary (natural) ups and downs of the market are not an issue.

We bought this year. I'm certain by @CrashyTime 's assessment we would have overpaid! It took a long ish time to complete in a falling market so maybe would have come down a bit. We didn't try and gazunder because we felt we had come to a deal we were happy with and our buyer didn't gazunder either.

Dh and I have bought a house to raise our kids and with a granny annexe for future proofing. We love the area and the garden.

We can comfortably afford the repayments (even if rates continue to rise a lot more) and had 34% deposit.

In that sense the overall price wasn't super relevant to us. Any blips in the market now will seem tiny in 20/25 years. We have income procreation and life insurance in place to protect agains change of circs.

I don't know what will happen but we're happy with our decision. I think there will be a fall but I think people like Crashy have been waiting years (decades?) for a mythical giant collapse when they can buy cheap.
Are you currently a homeowner or renting @CrashyTime ?

This happened to us. Agreed 272, then mortgage valuation came back at 250, but it transpired they'd missed a reception room so they came back and agreed 265. We offered to split the difference and agreed 268. Then our mortgage application took longer as broker had transferred across some incorrect details from a previous purchase which fell through, then the vendor threw a hissy fit we were taking too long and put it back on the market. Then our mortgage offer did come through and we ended up paying 270 and I was annoyed and embarrassed that we'd overpaid and people would see it on Zoopla! Then we sold it for 335 6 years later.

Overall if you can afford it and you want to stay then absolutely offer the 375 but if you love it don't cut your nose off to spite your face over a couple of k if you can still make it work and don't have a better option.

There are people working today who have never seen a down market, last time was bailed out with rate cuts now rates are rising and people have a lot more debt than they would have had if the market had been allowed to follow normal "ups and downs", too many vested interests back then with too much to lose, we are seeing this play out again in a different way with commercial property where instead of giving people almost free debt to buy houses they are telling people to get back to the (high rent yielding) office or lose their job!

I offered on a house at the height of the msrket in early 2008. Was sealed bids. Valued at £275k, we offered £305k. It sold for £400k.

It was a bit of a one-off, but ultimately a 2-bed cottage. Lovely, but not that lovely. We live rurally, and I drive past rte house daily (so I look it up when it has a "for sale" board outside!).

It is on the market now at £360k. Its had standard stuff done - new kitchen, replace flooring, repainted, new boiler. Standard stuff youd do if you take a bit of care over your home. Nothing major: no extension or lift conversion or passivhaus tech.

The house price crash part may have happened in the past but not the “never recover” part. House prices have always recovered and the house price graph goes upwards if you use the line of best fit, despite some years of house prices stagnating or falling along the way.

I agree with the rest of your post, though.

There’s a poster on Martin Lewis’ forum and house price crash forum that is always talking about house prices crashing, has been saying it for several years. He or she apparently still rents whilst waiting for this crash and trying to put other people off buying.

In the bigger scheme of things, I would not lose a house for 5k, but my houses have always been a long term home and not a stepping stone.

Those house crash types get everywhere and have been predicting doom and gloom all the time I’ve been on the property ladder which is since the late 80s! I’ve seen prices rise & fall in that time more than once, but I don’t regret putting my money into buying rather than renting.

I stupidly went to HPC to see what it was like - really horrible, as it turns out. Full of angry, racist comments and Brexiteers complaining. Certainly nothing that persuaded me that the posters are economic oracles.

350k! Oh crashy. You have just lost any last shred of credibility.

You're not wrong, I only heard about him/her from respected posters on the Martin Lewis Buying & Selling threads.

Really? What are you basing your valuation on?

Where do I start. Your comments. Lack of knowledge of the market and how it works. Your refusal to take any comments onboard and keep repeating the same old same old.

The 350k valuation , what are you basing your comments on, where do you feel you have an edge in judging the house?

Well, I work in real estate for one. Secondly, the valuation has little to do with what the sellers want to achieve on the sale for their house. They have agreed a price with which both parties were happy. Everyone knows valuations are an inaccurate science, therefore one valuation could be below and another above. What matters is what the buyer and seller believe is appropriate. If the buyers can no longer afford the house, that is one thing. If they can achieve a 50/50 on the difference, that is another. But to demand a massive drop because their valuation came in lower - well ... I have no idea really why I am explaining this, as you won't listen.

How many other offers do they have?

" Well, I work in real estate for one. "

Would you normally value a property without seeing it?