Would you buy a house you know is overvalued? [Content warning: contains mention of suicide]

[propertymug]

If it was the perfect location?

House has been on the market at current price for a year. Prior to that it was priced approx 10% higher so this is the reduced price. It is in an affluent area but clearly overvalued - nearby houses have been selling for approximately £540/sq ft. This is on for £720/sq ft. It needs full renovation, so much so, we're thinking it may be more cost efficient to knock it down and rebuild and get exactly what we want/save VAT on costs etc. So it isn't priced at a premium because it's in immaculate condition or anything like that.

Vendor is adamant they won't sell for much less than the asking price. They did have an offer for approx 7% below current asking from a developer but they then pulled out.

The property works for us because it's on the street we want and walking distance to the village/train station etc. We currently live fairly rurally and the independence our teenagers would gain would be amazing. The views are stunning. Overlooking a lake on a golf course so will always be there (even if golf course gets sold to developers they can't build houses on a lake).

There's not many houses that come up for sale on that road, particularly undeveloped ones, so chances are if anything comes up it will be even more expensive and still unlikely to be to my taste.

Cons - plot is smaller than we would like but that seems to be the case for all the houses closest to the village.

• Garden is NNW. This originally put me off but having done some research and viewing the house at different times - the garden is still big enough that it gets a lot of sun. I'm also thinking I would like to make the most of the view with a lot of glass at the back so maybe that's actually a pro.

• Turns out the vendors spouse committed suicide in the garage. Not sure how I feel about this - i guess if we're knocking the house down then it isn't really an issue.

So, what would you do?? We keep going back and forth - we're in a great position (chain free cash buyers) and so I was thinking we should be able to get ourselves a good deal - instead we may end up overpaying, in a falling market! Any thoughts/opinions would be much appreciated

[Title edited by MNHQ to include content warning]

This:
'instead we may end up overpaying, in a falling market!'

I think you would be completely crazy to overpay so much in a falling market. We've now got to the stage where the economy is visibly deteriorating, so that nearly everyone has noticed. Now is not the time to overpay.

I'm seeing lots of homes come to market in the past couple of weeks. Some 'old favourites' that have been on and off the market for about 3 years but some new ones too! I'm sure you will find something else, particularly as you are in a great position.

Absolutely no chance. Read what you've written again. Only a fool would pay that much more, listen to your head not your heart.

And it would haunt me that there had been a tragic death on the property

Me too. There's been a lot of unhappiness for that tragic outcome, and knocking it down wouldn't change the land. That alone would put me off, even if it was a bargain.

Oh man - you're all telling me what I don't want to hear! 🙈. Trying to justify it to ourselves by saying in the long run - would we care that we paid that little bit extra if it's the house we're potentially in for the next 20-30 years?!

That is pretty off putting too!

You must have your doubts OP or you’d have just gone ahead!

Your future self will thank you!

Entirely your decision, of course!

A property is worth what someone will pay for it. If it’s somewhere you’re staying for ten years who cares if you pay a bit more?

Will you be buying with a mortgage? The lender might not lend what you need if it's very overpriced.

I'm of the view a house is worth what someone is willing to pay, and if you know you want to be there decades and are going to be adding to the value I wouldn't fret too much, but accepting there is a risk. If the lender will let you!

We're cash buyers so that shouldn't be an issue luckily.

I know people say you need to use your head and not your heart when buying a house but I completely disagree (within reason). You’re not just buying a house, you’re buying a home, moments and memories. Currently house hunting and I can’t even bring myself to view a property unless I absolutely love it and can truly imagine my future there. I need to be excited about it. This is why we’ve hardly viewed any 😆

One house we lost out on was my absolute dream home, dream road that rarely comes up let alone in our price range, with the views included (needed work as well but so much potential) if I had the chance to overpay for it I would. In fact we even tried that but they decided not to sell in the end.

But I would definitely see how low you could get the vendor first before committing to an offer. Good luck

If you can afford it and you really want it then it’s obviously worth it for you.

This is kind of our thinking - but it's frustrating the vendor is being so bloody unreasonable! We could take the risk and wait and see what happens or take a risk and overpay. Either way it's a risk! Thank you for the good luck wishes

Most of us don't buy a house as an investment, or business transaction. We buy a house because we want to live there.
It sounds like you are really invested in this house - or at least this plot - for very good, logical, non-emotional reasons.

I am another who takes the thinking of "when we sell in 15 - 20 years, will we even remember the perceived extra we paid, or will we just be pleased to have been able to live in this place as our teens grew?"

If it is the one , and you have the money, then compromise on something below their asking price and buy it.

Thank you all - lots of food for thought. Can I ask people's thoughts on the other cons - would backing onto a golf course put you off? Potential balls in garden? Does the north facing garden put you off - even though the grass area gets sun, I imagine the patio closest to the house will be in shade? And obviously there's the death in the house.... plus the fact it needs so much work and build costs have risen exponentially since COVID.

But offsetting all the above is location, location, location...

Value is very personal. If you absolutely love it, can afford it and have no intention of leaving then pay what you must.

However, your own questions should be raising red flags to you. There's a chance you'll buy it and regret it - too small, too dark, too many broken windows, too many bad spirits, etc

How much is the house on for and what do you think it’s actually worth? Do you know if it’s structurally sound? Is it just the price that is why it’s been on the market for so long? Do you know the circumstances of the sale?

If it was a question of paying £10-20k above what you think it’s worth, I’d say go for it. But 50% over the odds is too much. And then you’d need the money to do it/rebuild on the plot. In a difficult economy.

The property works for us because it's on the street we want and walking distance to the village/train station etc. We currently live fairly rurally and the independence our teenagers would gain would be amazing. The views are stunning.
Have you considered dropping letters through the door of the whole street? Got to be worth a try before paying 33% over the odds.

It's "died by suicide", not committed. Suicide hasn't been a crime since 1961.

My dad died by suicide in our garage. Brief warning would have been helpful. Property is one of my favourite topics and didn't expect this to crop up with no warning.

@senua's idea of dropping letters through letterboxes is a good idea if it is one of the streets that you really like.
From the information in the OP, it sounds as if you think the house is over 30% overvalued, so we aren't talking about a very small % here. It's huge. Clearly, if the house has been on the market for a year at this price, everyone else agrees that it is very over priced and the seller is intransigent.

It's true that you are in a great position and have money to 'waste'/ can overpay, unlike someone needing a large mortgage. Will your future self thank you for this though? If houses prices do fall considerably in an economic downturn and you have over paid for 2 or 300,000, would you regret it or would you not care and just be happy to be living in that house in that road? I guess this is what you need to ponder.

Everyone always says on here (only when you're not able to sell rather than when you want to buy as it suits the narrative that everything that doesn't sell is overpriced) that a house is worth whatever someone is willing to pay.

We have a very small search area and are losing out on the few houses that come on because we've argued that they're overpriced. The issue is, they no longer are if people are buying them. If you love it and intend to live there a long time, what does it matter (assuming the lender doesn't disagree)!

Thing is if you letterbox people the first thing they're going to do is see how much the house you like is up for, know how keen you are, and will have an inflated price themselves.

We over offered by 10% on our “plot” in the dream location. It was a run down bungalow on a large plot that needed major renovations. We had no intention of taking on a project but once we’d seen it we knew it was the one.

It went to best and final offers and we weren’t the highest bidder. The seller went with us though because we were going to keep it as a single family home and not put multiple houses on the plot.

We’ve ended up knocking it down and rebuilding as the bungalow had huge structural issues (old owner was an old guy who liked DIY). But when I wake up in the morning to views over fields and peace and quiet and everything I have ever wanted then it was 100% worth it. It’s our forever house. We’ll only sell if we want to downsize.

Turns out we have made a 50% profit on it. Well, if we take the estate agents valuations vs what we paid. We’ve also had someone offer to buy it from us (flattered, but no!!!)

There were actually two deaths in the bungalow. Both the old guy and his wife died peacefully at home. I thought it might put me off but it really didn’t - I actually felt a real connection with what had obviously been a very happy home for them.

Deep down you know if it’s the one and worth it to you. I would personally make a sensible offer slightly higher than the developer one but also submit a letter detailing everything you love about the house, wanting it to be a family home, forever house etc. The seller may well have a huge emotional connection to the property, especially after the loss of a loved one, and there’s a lot to be said for wanting to sell it to the “right” buyers.

Would it be insurable? And would the bank be ok with it?