Viewing a house overpriced by nearly 100k.

[greendoorbluehandle]

Is it cheeky to offer what it's actually worth?

The estate agent has told us it's a vendor led price. It's been for sale a year this month and was originally listed for 370k, now for OIRO 330k. It's a 3 bed semi detached bungalow in a village where similar houses sell for 245-265k. They bought it in 2017 for 135k and have put new flooring down and a new bathroom and done the garden up but to expect 200k more than they paid is absurd.

We need a small mortgage so it will get valued by the bank, Zoopla is usually very accurate with valuations on houses we've bought in the past matching bank valuations and that's valuing it at 260k.

My DH thinks we view it then offer 250k of we like it and leave the offer on the table (we're in no rush) and hope they come to their senses. We know that competing estate agents valued it at 245k and 255k but they listed it at 370k?! The greed is quite shocking!

The value is what someone is willing to pay for it

There are two values. Yes, as you say, the market price, which is what a property could actively change hands for, but also, an owner's value, which is the price they need or want, to change properties. We're stuck in this trap, so are hanging on to a house that's much bigger than we need. At the moment we can afford it and we absolutely love it. The house needs to be a big family home again, but looking at the prices of smaller properties and the cost to us in estate agent and legal fees plus taxes and removal expenses and it means that this house is worth much more to us than it would be valued if put on the open market.

Perhaps this is the situation with the property in question here and so they're not motivated vendors.

@greendoorbluehandle you should also bear in mind that if you were able to meet at a sale price acceptable to both parties, these people may be difficult to deal with in the process. They won't yet have found a new home, your building society valuation may not match up, they could be flaky in their responses and cause you all kinds of logistical problems. If in their own minds they felt they were underselling, you could be in for a rough ride.

Personally I'd look elsewhere, but if you do go and view, don't offer and then when the agent comes to you for feedback you say that having seen the property for yourselves you couldn't possibly offer any more than £X. They'll pass this to the vendors, but not as a formal offer if you make that absolutely clear.

No harm offering but they are very unlikely to accept as they are clearly v unrealistic wrt pricing.

True but what some sellers need to realise is that, if they are this unrealistic, they will have no sale and no money from the house, particularly in a falling market.

Yes, this. We've bought twice from divorcing couples, in both cases the house had been on the market years, they overpriced it massively initially.

"Vendor-led price" = nightmare seller.

I would be really afraid of spending hundreds on a survey of this property for them to pull out at the last minute too. They clearly don't "need" to move.

To me this would be a huge red flag, I'd be massively put off in case they try to up the price, pull out etc

These are often divorces/separations, one party moves out and the other agrees to sell the house..... Cue a vastly over inflated price and no sale as one person is being housed "for free" while they wait for a sale.

Eventually the other party will realise what is going on but then there will be several months / years of "negotiations", legal action etc.

Don't bother.

A poster above mentioned whether it was a divorce/separation situation. That’s what I was wondering. My friend’s ex did this. He insisted on a totally unrealistic asking price and strung her along for ages. It was some sort of game playing so that she couldn’t move on with her life.

Oh not this again.

there’s only one value and it’s defined by the RICS and it’s basically what someone who has the funds is willing to pay.

there aren’t two values.

if it’s not selling no one is willing to pay what you’re asking and so it isn’t worth that.

anything else is delusional talk.

There is one a few doors down from me that fits that description exactly, the sellers are holding out as they need the money for their onward purchase apparently. But it's been up for sale for a year so I can't imagine their seller is waiting for them any more?! (We were considering selling ours and so chatted to their agent for an idea of what we're looking at).

Little update. My DH phoned the estate agent this morning and went to view it this afternoon. We loved it (knew we would) and they are serious about moving, lots of viewings but no offers. They are open to a discussion on price.

There is nothing stand out special about it that makes it worth what they are marketing at, it is a very normal 3 bed semi detached bungalow. They are not divorcing, they want to move to be closer to his job.

To the person asking why are we looking at houses over our budget, we haven't been. But if this house had been marketed on the estate agents valuation it would be within budget.

We'll have a think but I think their expectation is too far from reality for any offer we make to be accepted.

You can offer but they don't sound like hugely reasonable sellers. One of my neighbours occasionally puts up his house for sale, always ridiculously overpriced, always takes it off sale fairly quickly. Good luck OP

Oh not this again

🙄

You misunderstand my example.

As I clearly said, we are not marketing our house, because it is worth more to us than we feel the market value would be. That is not delusional, it's fact.

There are anomalies, whatever you think, that RICS can't factor in. Friends of ours sold a property for a massively significant over value amount because their garden would give access to a builder who had purchased neighbouring property. That value was only there to this particular purchaser and in those specific circumstances, but it happened.

In the case of the property the OP is talking about, the vendors are chancing their arm on the off-chance that someone might come near their price, and are clearly not actually motivated to sell. Which is what I said.

We did this once. They turned down the offer and the house didn't sell for another two years or more. That only happened when house prices had risen enough for it to be worth what they were asking...

House is worth what someone will pay.

When we put our London flat on the market years ago Dh upped the estate agent suggested price by £50k and we got it. Had our pick of buyers. So not all vendor led sellers are deluded.

This just sounds like your estate agent was shit though - if you had your pick of buyers then their suggested price was too low. Or they thought they could get a bidding war going I suppose.

If the house is over priced and been on the market for a year and they want to move to be closer to his job, they have a minimum amount they need to be able to purchase in this new area. It’s unlikely to be £100K lower but there’s no harm in putting an offer in.

With that in mind, I would also be wary if they do accept your lower offer that it will be months of looking and “not finding something acceptable”. Be prepared to continue your search until the chain is complete and be open with the estate agent and vendor about that to actually get them moving. It’s been a year so the commute obviously isn’t that bad or they’d have already seriously renegotiated the asking price.

EAs need buyers to make low offers when vendors aren’t being realistic.

It might not get you anywhere but it will somewhat help the EA.

While there is such a big disparity I would not offer. No harm I suppose but sellers who massively overprice are IMO more likely to take umbrage at a (to them) possibly insultingly low offer.

Houses sell when the people selling it can agree a price with the people wanting to buy it. If either party is in cloud cuckoo land it's not going to happen, so you might as well save yourself the stress and heartache.

We have neighbours who try to sell their house every year for a good £150k more than it's worth. They are just wasting everyone's time.

There is no single objective value. If there were, then RICS would just set a fixed price for each house and, frankly, many buyers’ and sellers’ lives would be made much easier.

But in a free market, as the UK housing market is, every valuation is a negotiation between what the buyer is prepared to pay and what the seller is prepared to sell it for.

There's a house locally going for 1.9 million. I think that there's a chance they may consider offers 100k below the asking price but it's unrealistic to make such a disproportionate offer on this property. If it were 100k less no doubt there would be more interested parties.

I said it’s defined by the RICS. Red book.

🙄

RICS are surveyors, not economists. Their definition is incomplete.

For what it’s worth I’ve been watching the zoopla predicted prices around here compared to what the properties actually go for and they’ve consistently been going for much more than zoopla suggests they’re worth.