When Is A Crash Not A Crash?

[Bob Loblaw]

Had my eye on a house (Semi-detached, 5 bedroom, 2 en-suites, family bathroom, living room, dining room, kitchen, separate garage). Sold in 2007 for £315,000. Was repossessed last year and has slid down from £220,000 to £182,500. Put an offer in for £165,000 expecting to be knocked back but it was accepted. This equates to a 48% drop from peak. However, house was built in 2007 so the £315,000 might have been the price paid before 'discounts'.

Question is, was the house ever 'worth' the £315,000 it sold for in 2007. If not then I am concerned I am still paying over the odds for a house which could be significantly cheaper a couple of years down the line. Is it possible to determine the true value of a house and its actual worth? Identical houses on the street are up for £235,000 with no takers.

[TheCountOfNowhere]

That's a crash.

[Riedquat]

Is it possible to determine the true value of a house and its actual worth?

No, because wealth and value are entirely matters of opinion, which is why money is, at best, one of those really, really stupid concepts that only remains because some people do very well for themselves out of this stupidity, and in any case no-one has managed to invent a practical alternative.

Simply put, there's no such thing as absolute worth. If you're happy with the amount you're paying then that's fine, if you're not then you shouldn't have made the offer.

[Toto deVeer]

Had my eye on a house (Semi-detached, 5 bedroom, 2 en-suites, family bathroom, living room, dining room, kitchen, separate garage). Sold in 2007 for £315,000. Was repossessed last year and has slid down from £220,000 to £182,500. Put an offer in for £165,000 expecting to be knocked back but it was accepted. This equates to a 48% drop from peak. However, house was built in 2007 so the £315,000 might have been the price paid before 'discounts'.

Question is, was the house ever 'worth' the £315,000 it sold for in 2007. If not then I am concerned I am still paying over the odds for a house which could be significantly cheaper a couple of years down the line. Is it possible to determine the true value of a house and its actual worth? Identical houses on the street are up for £235,000 with no takers.

Just for reference, could I ask what area of the country this is?

[LiveinHope]

To me it is simple,

The value of anything is simply what it is worth to you and whether you would expect someone else to buy it from you at that price, or for more, in which case you have done a good deal, or for less, in which case you are either foolish or need it badly enough to pay a premium.

Forget 2007 prices and such nonsense, you are buying now.

Simply, is the price you are paying now what the property is worth to you ? Look at it, you should be able to tell.

[kenny dalglish]

Had my eye on a house (Semi-detached, 5 bedroom, 2 en-suites, family bathroom, living room, dining room, kitchen, separate garage). Sold in 2007 for £315,000. Was repossessed last year and has slid down from £220,000 to £182,500. Put an offer in for £165,000 expecting to be knocked back but it was accepted. This equates to a 48% drop from peak. However, house was built in 2007 so the £315,000 might have been the price paid before 'discounts'.

Question is, was the house ever 'worth' the £315,000 it sold for in 2007. If not then I am concerned I am still paying over the odds for a house which could be significantly cheaper a couple of years down the line. Is it possible to determine the true value of a house and its actual worth? Identical houses on the street are up for £235,000 with no takers.

FFS, you are just being greedy ! If you like the house and you are happy with it, live there and enjoy it. By your own rough calculations you have potentially got it at 50% below peak - check nethouseprices.co.uk you can quickly find out what it sold for in 2007 - you got it at nearly 10% below ask and you still want to quibble about potentially another couple of thousand. You are part of the problem, you just don't see it....

[koala_bear]

new build 2007?your neighbours will hate you.

The bank who reposed it won't as they will just sue the surveyor who "valued" it for 315k in 2007. (probably putting them out of business as they won't be able to get insurance again at a sensible rate)

Being a bank job it won't be included in the LR stats as it might skew the stats down. The question is whether other local surveyors would use the valuation provide lower valuations to cover their backs when valuing next time round.

I suspect there may have been a bit of fraud originally if they are happy to let it go at such a big reduction...

Bob: Any idea who the original lender was?

Edited December 15, 2010 by koala_bear

[goldilocksporridge]

Had my eye on a house (Semi-detached, 5 bedroom, 2 en-suites, family bathroom, living room, dining room, kitchen, separate garage). Sold in 2007 for £315,000. Was repossessed last year and has slid down from £220,000 to £182,500. Put an offer in for £165,000 expecting to be knocked back but it was accepted. This equates to a 48% drop from peak. However, house was built in 2007 so the £315,000 might have been the price paid before 'discounts'.

Question is, was the house ever 'worth' the £315,000 it sold for in 2007. If not then I am concerned I am still paying over the odds for a house which could be significantly cheaper a couple of years down the line. Is it possible to determine the true value of a house and its actual worth? Identical houses on the street are up for £235,000 with no takers.

I remember reading somewhere, if you compare the cost of a new mortgage, using one of mortgage calculator, i.e monthly payments with how much it would get if the property is rented out. So the rental value might give a more accurate true value of the property, so if the monthly mortgage payments are less than the rental figure then your getting a decent deal.

[tim123]

Just for reference, could I ask what area of the country this is?

I'm guessing that his location on the LHS is a clue.

It can't be in the south. No (family) properties are taking a hit anywhere near this big

tim

[Toto deVeer]

I'm guessing that his location on the LHS is a clue.

It can't be in the south. No (family) properties are taking a hit anywhere near this big

tim

Thanks tim

[singlemalt]

FFS, you are just being greedy ! If you like the house and you are happy with it, live there and enjoy it. By your own rough calculations you have potentially got it at 50% below peak - check nethouseprices.co.uk you can quickly find out what it sold for in 2007 - you got it at nearly 10% below ask and you still want to quibble about potentially another couple of thousand. You are part of the problem, you just don't see it....

"Calm down, calm down"

Hardly a question that merits such vitriol. To the average person even buying a house for 165k represents a serious financial undertaking not to be taken on a whim.

OP. imo your offer sounds fair and even if (when) prices go further south it shouldn't really matter providing you're happy there and can afford the mortgage.

[northwestsmith2]

Nothing wrong with trying to pay the least amount possible. During the idiot boom when we had 22% YoY rises they would think nothing of

offering 20/50/100K extra as if they were millionaires not borrowers.

On the way down I hope we don't get the same idea that 5K or 10K doesn't matter because it's a house. At least worth thinking about as the OP

has done because that money has to be paid back in full plus interest, spending a day to save £10K is worthwhile.

[kenny dalglish]

"Calm down, calm down"

Hardly a question that merits such vitriol. To the average person even buying a house for 165k represents a serious financial undertaking not to be taken on a whim.

OP. imo your offer sounds fair and even if (when) prices go further south it shouldn't really matter providing you're happy there and can afford the mortgage.

We can't have it both ways, we can't say that home owners are greedy and unrealistic when they ask too much, but it's ok for HPC'rs to be disatisfied with a 50% drop. I want people on both sides to be realistic....

[Misanthrope]

Had my eye on a house (Semi-detached, 5 bedroom, 2 en-suites, family bathroom, living room, dining room, kitchen, separate garage). Sold in 2007 for £315,000. Was repossessed last year and has slid down from £220,000 to £182,500. Put an offer in for £165,000 expecting to be knocked back but it was accepted. This equates to a 48% drop from peak. However, house was built in 2007 so the £315,000 might have been the price paid before 'discounts'.

Question is, was the house ever 'worth' the £315,000 it sold for in 2007. If not then I am concerned I am still paying over the odds for a house which could be significantly cheaper a couple of years down the line. Is it possible to determine the true value of a house and its actual worth? Identical houses on the street are up for £235,000 with no takers.

Price up the land value (via land registry) and then cost out build on current market rates. What do you get? What do you think?

[ydbc]

Crash? There is no crash! Well, not if you look at Zoopla.

48 Ballards Green, KT20 6DA sold in September last year for £260,000. Today's value (per Zoopla) - £320,000!!! That equates to a 27% rise in just fourteen months.

So the original poster got a bargain ... or maybe there is something wrong with Zoopla's arithmetic (see also today's Daily Excess article based around Zoopla's figures.

BUY NOW before it's too late!

[trekking]

Had my eye on a house (Semi-detached, 5 bedroom, 2 en-suites, family bathroom, living room, dining room, kitchen, separate garage). Sold in 2007 for £315,000. Was repossessed last year and has slid down from £220,000 to £182,500. Put an offer in for £165,000 expecting to be knocked back but it was accepted. This equates to a 48% drop from peak. However, house was built in 2007 so the £315,000 might have been the price paid before 'discounts'.

Question is, was the house ever 'worth' the £315,000 it sold for in 2007. If not then I am concerned I am still paying over the odds for a house which could be significantly cheaper a couple of years down the line. Is it possible to determine the true value of a house and its actual worth? Identical houses on the street are up for £235,000 with no takers.

As others have said, it's what it is worth to you.

When I was last house hunting, I used to compare the cost per square foot of floor area of the various houses I was viewing to get an idea if it was a bargain or not. Other things like location/garage/garden/build quality being equal. HTH.

[Fairies Wear Boots]

people play the market on the wya up and they play it on the way down.it was always thus.chill.

And HPCers have a duty to get the best possible price!

O.P. Well done in getting your offer accepted.

I notice that interest rates are rather low at present, you should be able to pay off a large wadge (guessing you are taking out a mortgage?) before they go up again.

[LiveAndLetBuy]

Had my eye on a house (Semi-detached, 5 bedroom, 2 en-suites, family bathroom, living room, dining room, kitchen, separate garage). Sold in 2007 for £315,000. Was repossessed last year and has slid down from £220,000 to £182,500. Put an offer in for £165,000 expecting to be knocked back but it was accepted. This equates to a 48% drop from peak. However, house was built in 2007 so the £315,000 might have been the price paid before 'discounts'.

Question is, was the house ever 'worth' the £315,000 it sold for in 2007. If not then I am concerned I am still paying over the odds for a house which could be significantly cheaper a couple of years down the line. Is it possible to determine the true value of a house and its actual worth? Identical houses on the street are up for £235,000 with no takers.

If you like the house and are comfortable with the mortgage payments then buy it and enjoy it. You've got a lot off the original price so who cares if it drops by another 10% or so - very few people pick the exact bottom of a bear market, and that's only by luck.

Edited December 15, 2010 by LiveAndLetBuy

[Guest The Relaxation Suite]

Had my eye on a house (Semi-detached, 5 bedroom, 2 en-suites, family bathroom, living room, dining room, kitchen, separate garage). Sold in 2007 for £315,000. Was repossessed last year and has slid down from £220,000 to £182,500. Put an offer in for £165,000 expecting to be knocked back but it was accepted. This equates to a 48% drop from peak. However, house was built in 2007 so the £315,000 might have been the price paid before 'discounts'.

Question is, was the house ever 'worth' the £315,000 it sold for in 2007. If not then I am concerned I am still paying over the odds for a house which could be significantly cheaper a couple of years down the line. Is it possible to determine the true value of a house and its actual worth? Identical houses on the street are up for £235,000 with no takers.

Depends where the house is. A five bed semi in a top-notch town with good amenities and no D or E social grades, then maybe. A five bed semi in between a ring-road and a council estate full of D and E social grades, then no, etc.

[Hyperduck Quack Quack]

Question is, was the house ever 'worth' the £315,000 it sold for in 2007.

At the time, yes. Presumably the person who paid £315,000 for it could have sold it for a similar price, or even a bit more, had they flipped it straight back on the market.

[kenny dalglish]

people play the market on the wya up and they play it on the way down.it was always thus.chill.

Bizarre, so HPC'rs can have it both ways.....meanwhile in the real world....

[Bob Loblaw]

Just an update on my OP for anyone interested. As mentioned the house had been on the market for a good 18 months with no interest. However, the day after my bid went in another bidder appeared, in a 'very strong position' apparently and out bid me to £168,000. Now I am a bit peeved at this as either the EA has invented a new bidder to push my price up or some sheeple type of person has noticed my low bid (as a corporate repossession the bid price has to be advertised until exchange) and put a bid in (despite showing zero interest in the property after 18 months on the market). Anyway, the EA called me and asked me for 'best price' so I stuck by my guns at £165,000. The description has now been changed on RM to say the best offer is now £170,000. This means the EA has approached me and the 'new bidder' and asked for their best price and they have increased to £170,000. I am not happy but since the 'new bidder' is in a chain I am expecting the EA to come back to me at some point.

[athom]

when they do come back just make sure to offer 160. Especially if it's in a suspiciously short amount of time.

[Bloo Loo]

Just an update on my OP for anyone interested. As mentioned the house had been on the market for a good 18 months with no interest. However, the day after my bid went in another bidder appeared, in a 'very strong position' apparently and out bid me to £168,000. Now I am a bit peeved at this as either the EA has invented a new bidder to push my price up or some sheeple type of person has noticed my low bid (as a corporate repossession the bid price has to be advertised until exchange) and put a bid in (despite showing zero interest in the property after 18 months on the market). Anyway, the EA called me and asked me for 'best price' so I stuck by my guns at £165,000. The description has now been changed on RM to say the best offer is now £170,000. This means the EA has approached me and the 'new bidder' and asked for their best price and they have increased to £170,000. I am not happy but since the 'new bidder' is in a chain I am expecting the EA to come back to me at some point.

Its a possession and they are duty bound to take the best offer.

[newbonic]

Just an update on my OP for anyone interested. As mentioned the house had been on the market for a good 18 months with no interest. However, the day after my bid went in another bidder appeared, in a 'very strong position' apparently and out bid me to £168,000. Now I am a bit peeved at this as either the EA has invented a new bidder to push my price up ......

We had a similar thing a few years back when we we house hunting - a place had been on the market for months with no apparent interest, but although it was in a state we liked it and put in a bid at the asking price. A couple of days later a mysterious 'cash buyer from London' appeared who had matched out offer (we were 'only' 50% LTV). Young hair gelled spiv at the EA asked us if we would like to increase our offer. We said no thanks.

Two weeks later I got a call from spiv saying 'Congratulations, they're accepted your offer of the asking price!'. It was very satisfying to tell him we'd found somewhere more suitable, and to politely f*** off!

I'm not saying that this could be the case with your purchase, but they could be playing EA poker with you. Or maybe there is a better offer?