Is this house over priced?

[Veebee89]

We’ve seen a house we love and want to make an offer but I’m worried it’s overpriced and if we overpay we’ll struggle to sell it.

It’s only been on the market for 3 weeks. On Rightmove we saw that it had been listed for sale last summer. We asked the EA about this and why they’d taken it off the market and were told they were on with another agent, didn’t get the necessary interest or suitable offers so decided to withdraw it and then came on with the new EA this year.

It’s on one of three parallel streets which all have similar houses in terms of age, size, layout. Looking at sold prices on those streets we can see:

• House 1 - sold £830k in August 2023 (similar in size and layout, but newly renovated with high end interiors)
• House 2 - sold £815k in August 2023
• House 3 - sold £875k in October 2022 (newly renovated with slightly larger extension which has created a utility room and office)
• House 4 - sold £715k in May 2024 (only house which hasn’t had a kitchen extension)
• House 5 - sold price reduced to £795 in March 2024 and then taken off the market. No drive. Newly renovated.

The house we want to buy is on for £850k.

Based on these prices it seems like the values are falling or some vendors just got lucky with the right buyer and/or right time to sell.

We don’t want to lose out but also don’t want to overpay and then struggle to sell on, especially because we’ll likely only live there for 5 years before moving again.

What do you think we should offer?

It’s impossible to say from the information given about the house. We don’t know whether it has been renovated or not, for example, or whether it has a drive or what the internal decoration is like. We don’t know how the square footage of the property compares to others that have sold recently.

As a very rough guide though, I doubt the sellers will reduce the price drastically since it has only been on the market for 3 weeks. If I loved the house I might start negotiations at 800k as I doubt they would consider lower at this present time.

I am guessing the house you are looking at has an extension and drive and had a degree of renovation? What the vendor accepts is driven by number of people at that moment in time who are interested and how urgently they need to sell. You haven't mentioned much about house 2 either favourable or unfavourable so can't see any house going for much less than £815k

How does it compare to the others in terms of extensions/ renovation/ drives?
Based on what you have said so far, I wouldn't offer anything at present. They appear to be to be unrealistic sellers and to be over pricing again. It already didn't sell last Summer and appears to have then come on at too high a price compared to other sales again. What do you think is reasonable value having seen it? 750-775k? How much is it worth to you, taking everything into account, including the fact that you don't want to live in it long term?
You can tell the agent that you like the house but think it is over priced compared to others and to let you know if the price is reduced.

Have you sold your house, are you in a good position to negotiate?

What condition is the one you are looking at in?
Are any others currently for sale?

Sometimes people might pay more for a house with a south facing garden. Is this case with any of these houses?

The house isn’t newly renovated but it’s a family living there and isn’t in bad condition. All the properties are almost identical square footage and layout except the one mentioned which hasn’t been extended. It has a drive as do all the others except the one where I referenced it didn’t.

Basically, the houses are the same with the only differentiators being the things mentioned next to the sold prices.

They are a real mix! The houses are quite niche (being three streets of large houses in an area of mostly small terraces and lots of social housing close by). The area has recently become gentrified and is now quite trendy and these houses increased in value a lot in the last 5 years. But I think a lot of people with that budget might still not choose to live there as the area is still a bit edgy so I think maybe it has to be right buyer and is more linked to the time they were selling?

House 2 - no pictures or floor plan is available on Rightmove which is why I haven’t mentioned it!

It doesn’t need renovating but hasn’t been recently renovated either - it was probably done 15 years ago when the sellers move in so needs a little updating but it’s been well looked after and in good condition. We would probably get a new kitchen and bathroom.

Yes it has an extension and a drive - as do all the houses above except the £715k one (no extension) and £795k (no drive).

I’m struggling to understand why houses seem to vary so much in value when they’re so similar but the more recent ones seem to go for less which makes me think they were priced high when the market was strong but more recently have struggled to sell for that - so in the last year they’ve either had to drop the price or take off the market.

I expect they are hoping for 800000 +.

My question is why are you looking at spending close on a million pounds on a five year house. What would you need to stay long term cos over five years you will very likely lose money

There are reasons why houses that are very similar sell for different amounts of money. It could be the vendors holding out for a price they need so they can sell or vendors seeing their dream house that only comes up once in a while so they will accept a lower offer. Or could be a family needing to move to the other side of the country for work so they have to sell and will be a motivated seller to use estate agent speak! The thing is if there is only one house in those 3 streets available to you then the vendor has the advantage as there is no competition. It’s frustrating for you.

I would put an offer on the house based on what you are happy to pay and you feel is reasonable having researched. If not accepted then ask the estate agent to get in touch with you if the vendors change their mind. I don’t think you need to say too much at this point. You never know the vendors might suddenly find the house of their dreams and be able to negotiate a reasonable price and therefore be willing to accept a lower offer from yourselves. In the meantime look at other properties.

We sold our house 3 months ago and are expecting to exchange contracts imminently.

I agree with @LindaDawn & would take that advice to offer what you think the house is worth but also understand that there are numerous reasons why houses that are very similar could sell for different amounts of money.

It’s not like houses have a fixed value like tins in a supermarket. Their value changes depending on so many factors & while research is always valuable at the end of the day you have to reach agreement with the seller. So hopefully you can reach agreement on a reasonable price for that particular property.

Impossible for us to say what the house is worth without seeing the details. A house is worth what someone will pay for it though right? It’s not unreasonable to offer 10-15% under asking price. Particularly if you have been in a strong position and it’s been on he market a while. We had £45k knocked off ours (and it had already been reduced by 50k). It had been on the market for a year.

Thanks, I just mean in comparison to the similar properties nearby - which is all I really have to go off too.

It hasn’t been on the market for long but they were unable to sell it last year so took it off the market and put it back on. So from their perspective they might be thinking it’s only just gone on the market?

We wouldn’t mind paying the asking price because it ticks our boxes IF we knew we could then sell it on at that price. But as we know we’ll likely need to move in 5 years we don’t want to end up in the position of the current sellers, still living there a year after wanting to sell.

Not many people pay the asking price in this market @Veebee89 unless a house is extremely desirable in some way.

Definitely go in at under asking price is my advice.

Houses are not priced what they are worth. They are priced what the seller expect someone will pay for it.

It's key to remeber that, because you seem to be trying to find a strict logic when there isn't one.

The question is, what is it worth to you? If you can find similar for cheaper, then it's probably not worth that much to you. If the money is more than you can comfortably afford, then it probably isn't worth that much to you.

The market in 5 years time could be stronger, could be weaker - trying to second guess what it might be worth then is really tricky and likely to cloud your judgement. It's always a bit of a roll of the dice.

It’s a tricky one. Honestly with the market as it is I wouldn’t feel secure about making a profit (or not losing money) in a relatively short time period. Not when you are already questioning its value and why it is priced at the level it is. You’re also looking to spend on a new kitchen and bathroom, which realistically could be another 30k or so.

Why would she need to stay for a long time to not lose money on a 800k house? I

I live in an area with lots of terrace houses, ex mining area and quite a bit of social housing. There are a few roads not like this, I live on one but in one of the smaller houses. There is a smattering of big houses. My neighbour has been trying to sell hers for months. It is top end for the area. As DH and I say if people have that sort of money they wouldn’t be buying here.

Is it a flip? Why are you so focused on selling? If you intend to stay in it a few years then 20 odd grand makes no difference.

Maybe you are focussing too much on what your house may be worth in 5 years time. I get that you don’t want to lose any hard earned money. Prices might fall further but with the shortage of houses I feel they are more likely to stagnant and with inflation then that is effectively a fall. If you are moving in 5 years time and don’t get what you paid for your house that might be the case for the house you are buying too and if moving to a bigger house then it’s a win win. This house obviously meets your criteria or you would be looking at other houses by now!
On the road where I live a probate house was listed at £900k September 2023, had lots of viewings immediately and was marked as sold on Rightmove 10 days later. And sale completed December 2023. Found out it sold for £820k. I was dumbfounded at the reduction especially with the about of interest but to be fair it did need lots of updating so was probably a fair price. If I put our house on the market I wouldn’t entertain less that £900k to begin with. The owner had no family that I am aware off and the estate probably went to a charity. No family to argue over offers!!

This makes absolutely no sense at all. A/how would you know what they wish and b/why would they lose money?

Do you know the vendors plans? Maybe they haven’t found a house at a price they want so are happy to wait for a sale.