Crazy Price Differences

[skewed value]

I've been doing the usual Rightmove trawling in the Godalming area, and have found a massive disparity in valuations for nigh on identical properties.

According to Property Bee, Property 1 went on at £390k in November last year, now £360k. Property 2 went on at £295k in December - next door!

Now another has gone on, property 3, same footprint and plot as the others at £270k.

Property 1

Property 2

Property 3

How could the banks lend on property 1 at the asking price?

[jethrotull]

How could the banks lend on property 1 at the asking price?

Simples - they won't lend on it at that asking price.

Banks are behaving rationally and prudently and this is what is causing people to complain.

[General Congreve]

And who do you think has the most chance of selling their house?

This is the new environment HPCers have been waiting for. The first two owners better read the writing on the wall soon and follow house 3's example, if they need or want to shift their properties. Cue HPC.

Admittedly, house 3 is chintztastic though and does need at least 10k's work on it top bring it into the 21st century, but still, the relative price more than accounts for this and is still a far more realistic valuation.

Edited February 13, 2011 by General Congreve

[peter_2008]

The first vendor has spend £40,000 on his new BMW, £30,000 on share yacht ownership, £20,000 on kids tuition fee, £10,000 on the three family holidays, £5,000 on wife's presents. Isn't obvious that you, sir, shall pay the bill?

[oldbaginaonebed]

The first vendor has also f*cked up his garden.

[pajd]

Vendor 2 does have an extra bedroom than vendor 3 and a nicer house inside.

Vendor 1 is on drugs

[Yoss]

Simples - they won't lend on it at that asking price.

Banks are behaving rationally and prudently and this is what is causing people to complain.

Mortgage lending is about to focus on LTV ratio, sure you got £100K of equity, they will lend.

You got , sub 20% Equity.. you will get a quote..but said loan will not materialise. Not without an expensive valuation. It's called "Prudent" lending and it is all the rage. Self certs unless well funded need not apply , and thus the market WILL fall back to credible lending levels...GDP will go with it.

[skewed value]

I thought i'd add a few more to the list.

All four houses are fundamentally the same, 3 are in the same close, the other 100m away.

Two different markets - the lower priced houses still aren't selling, and are reducing slowly!

£295k

£289k (Around the corner)

£399k !

£399k !

The last property sold in the road back in April for £371k.

In my eyes the crash is on, and in the heart of leafy Surrey.

[gilf]

Admittedly, house 3 is chintztastic though and does need at least 10k's work on it top bring it into the 21st century, but still, the relative price more than accounts for this and is still a far more realistic valuation.

I doesn't need anything like £10k, these for me are the new "projects". When I was looking for a house before Christmas these sort of places were top of the hit list, no work been done since the 70's, old person died and left the house to a relative. They don't need anything like the work people think they do and it is far easier to negotiate for decent reduction. We got one which was in a far worse state than No.3, similar situation as we paid £90k less than the other houses on the rand and spent less than £3k doing it up to a good standard, including replacing many of the ceilings and all of the carpets. At the end of the process it's a better standard that any of the ones we looked at as while they didn't look old when you scratched the surface there was bound to be plenty of problems.

In comparison to our last purchase in 2000 which looked modern, we spent about the same about of money doing that up as we did on this older place.

These are not major rebuilding projects, you just need to know your limits and do some of the work yourself.

[Tiggley]

I have seen three identical houses in my village priced at 95k, 108k, and 117k. They're only a couple of streets apart, and the cheapest one is actually in the best location! Recently another identical house sold for 85k, so I have no idea how these vendors justify their asking prices. All of the vendors have owned their houses since way before the house price bubble started, so they're not trying to recoup the prices they paid; they're just being greedy.

[Swansea Estate Agent]

I have seen three identical houses in my village priced at 95k, 108k, and 117k. They're only a couple of streets apart, and the cheapest one is actually in the best location! Recently another identical house sold for 85k, so I have no idea how these vendors justify their asking prices. All of the vendors have owned their houses since way before the house price bubble started, so they're not trying to recoup the prices they paid; they're just being greedy.

There are several other reasons why the asking prices on some are different.

Poor advice from EA's that either don't know what they are doing or are still ramping prices to gain instructions.

Vendors may have been daft enough to listen to all the lendors willing to throw money at them while their house values were rising.

Vendors may have their eyes on the next property and need to raise as much money as possible to make it affordable.

Many more reasons, but those above are the usual ones that I come across.