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catpaw

First Time Buyer Seeking Advice On Asking Prices

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I am looking to buy a property, but getting a little bemused about some prices.

Case in point: We viewed a nice property yesterday on a street of very similar houses all built around 2006/2007 - we really like the house and would consider an offer; however on getting home and spending a few hours researching we can see that all the houses that have sold on that street in the last 3 years have all gone for less than the original purchase price, or equal to the original purchase price. The last example being 2013 so I appreciate things may have changed since then.

However, this road backs onto a small estate that was developed at the same time (cheaper houses) and there are 2 or 3 of those that sold this year (2 last month) that also sold for less than the original asking price.

Now the EA has priced this property we viewed at 120k above the original purchase price, even with a deal he thinks the best we can get is £20k off.

For me that seems to be a red flag; but I seem to be in the minority as we have taken advice off more experienced people and the general consensus we get is that "a properties true value is only what you are prepared to pay for it". I genuinely don't understand that - we like the property and until we saw this we'd have happily made an offer that would in hindsight have been well overt the purchase price, but we don't want to overpay, we want a fair price for the property we come to buy and have the option of selling it on at market value.

Are we being totally unreasonable to be concerned?

Admittedly all the properties are different. 3 beds, 4 beds, 5 beds, terrace, and end of terrace; but I have placed my assumptions on the price differences between original asking price and recent selling price that I have found to be relative.

This pattern seems to be the same in other developments near where we live, for houses buult in the last 10 years; though for buildings with more period features / character they have often increased in price since 06.

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Go in low, the worst they can say is no and then you can raise it. You don't have to get it right the first time and just don't be afraid to walk away as they call you back in a few days. Many sellers around here are adding another 10-15% onto their asking anticipating the buyer will come in 10% below it.

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Go in low, the worst they can say is no and then you can raise it. You don't have to get it right the first time and just don't be afraid to walk away as they call you back in a few days. Many sellers around here are adding another 10-15% onto their asking anticipating the buyer will come in 10% below it.

What would you offer though if all the other houses seemed to go for less than the 2006 price and this one was £120k above it?

It would be crazy to offer £120k less than the asking price; we want EAs to take us seriously; we are ready to buy. :)

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New builds are often sold for less than the original price if sold on within a few years of being built as the original price is deemed to include a "developer's premium" ie you pay more for a brand new property. See if you can find out the previous price paid (you can find this on Rightmove under "sold prices" if the property is advertised on this site) and then you know better how to pitch your offer. I would also go in low. You might strike lucky.

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Go in low, the worst they can say is no and then you can raise it. You don't have to get it right the first time and just don't be afraid to walk away as they call you back in a few days. Many sellers around here are adding another 10-15% onto their asking anticipating the buyer will come in 10% below it.

Yup and out of the sellers there will be one who is really desperate. I know in my street with all the houses that are for sale one is a repo and the other is due to serious illness. These two are desperate and I am sure will take offers well below asking the others can afford to wait for now but of course the other prices will be dragged down. Out of every cluster of sellers there are some desperate due to life reasons. It sounds ruthless but thats capitalism so F**k it.

Most of my street has been for sale for a year now, one sold with 50k knocked off. I haven't seen any chinese investors yet but the only sales are people taking biiiig haircuts.

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New builds are often sold for less than the original price if sold on within a few years of being built as the original price is deemed to include a "developer's premium" ie you pay more for a brand new property. See if you can find out the previous price paid (you can find this on Rightmove under "sold prices" if the property is advertised on this site) and then you know better how to pitch your offer. I would also go in low. You might strike lucky.

Yes I have done that - purchase price £350k - asking price £420k :huh:

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I am looking to buy a property, but getting a little bemused about some prices.

Case in point: We viewed a nice property yesterday on a street of very similar houses all built around 2006/2007 - we really like the house and would consider an offer; however on getting home and spending a few hours researching we can see that all the houses that have sold on that street in the last 3 years have all gone for less than the original purchase price, or equal to the original purchase price. The last example being 2013 so I appreciate things may have changed since then.

However, this road backs onto a small estate that was developed at the same time (cheaper houses) and there are 2 or 3 of those that sold this year (2 last month) that also sold for less than the original asking price.

Now the EA has priced this property we viewed at 120k above the original purchase price, even with a deal he thinks the best we can get is £20k off.

For me that seems to be a red flag; but I seem to be in the minority as we have taken advice off more experienced people and the general consensus we get is that "a properties true value is only what you are prepared to pay for it". I genuinely don't understand that - we like the property and until we saw this we'd have happily made an offer that would in hindsight have been well overt the purchase price, but we don't want to overpay, we want a fair price for the property we come to buy and have the option of selling it on at market value.

Are we being totally unreasonable to be concerned?

Admittedly all the properties are different. 3 beds, 4 beds, 5 beds, terrace, and end of terrace; but I have placed my assumptions on the price differences between original asking price and recent selling price that I have found to be relative.

This pattern seems to be the same in other developments near where we live, for houses buult in the last 10 years; though for buildings with more period features / character they have often increased in price since 06.

What town/city are you in? Unless you are London outskirts it sounds like the agents in the area are colluding and trying it on.

In most areas of the country there are a lot of new listings coming to market and stock is outweighing demand and putting downward pressure on prices.

That house could well be reduced £20k by Christmas then you can make an offer of £20k below their reduction. Not a lot shifts between now and March, and lots of people reduce the price by then.

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What town/city are you in? Unless you are London outskirts it sounds like the agents in the area are colluding and trying it on.

In most areas of the country there are a lot of new listings coming to market and stock is outweighing demand and putting downward pressure on prices.

That house could well be reduced £20k by Christmas then you can make an offer of £20k below their reduction. Not a lot shifts between now and March, and lots of people reduce the price by then.

Witney / Oxfordshire.

Even if we saw a 20k reduction and a further 20k on negotiation that would only be 40k under list price, and would still mean we are paying £80k more than it's 2006 sale - where all other properties built at the same time within a few miles have all sold for less than their original 2006 purchase price?

Or are we focusing in on other sales too much?

Here is a basic summary of the street

House 1 - purchased in 2006 for £340k - sold in March 2014 for £320k

House 2 - purchased in 2006 for £320k - sold in late 2013 for £320k

House 3 - purchased in 2006 for £300k - sold in late 2013 for £260k

House 4 - purchased in 2006 for £350k - for sale at £470k

Next street along

House 1- purchased in 2006 for £299k - sold last month for £299k

House 2 - purchased in 2006 for £260k - sold last month for £240k

I understand we can make offers but I am wondering if everyone else is getting crazy good deals or this one is simply too much. It's put us off a lot seeing the other sales.

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Witney / Oxfordshire.

Even if we saw a 20k reduction and a further 20k on negotiation that would only be 40k under list price, and would still mean we are paying £80k more than it's 2006 sale - where all other properties built at the same time within a few miles have all sold for less than their original 2006 purchase price?

Or are we focusing in on other sales too much?

Here is a basic summary of the street

House 1 - purchased in 2006 for £340k - sold in March 2014 for £320k

House 2 - purchased in 2006 for £320k - sold in late 2013 for £320k

House 3 - purchased in 2006 for £300k - sold in late 2013 for £260k

House 4 - purchased in 2006 for £350k - for sale at £470k

Next street along

House 1- purchased in 2006 for £299k - sold last month for £299k

House 2 - purchased in 2006 for £260k - sold last month for £240k

I understand we can make offers but I am wondering if everyone else is getting crazy good deals or this one is simply too much. It's put us off a lot seeing the other sales.

Hardly a boom area, nearby Gloucestershire is quite cheap IMO and too far to commute to London economically.

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I understand we can make offers but I am wondering if everyone else is getting crazy good deals or this one is simply too much. It's put us off a lot seeing the other sales.

I honestly don't understand the problem. You have done your homework, which gives you objective evidence that nearby properties built around the same time have sold for prices below the 2006 price. A mortgage valuer will use that same information to come to the conclusion that the price should hence be nearer the 2006 price for this property as well. This in itself will therefore directly affect any valuation as part of obtaining a mortgage, making it unlikely to secure a high enough mortgage. So the only conclusion you should reach is that this asking price is fantasy/kite flying. As a result it is best to ignore this property as it is unlikely that the seller suddenly would get real and drop by 120k.

The bottom line is that you should treat any asking price as an arbitrary number....it is up to you as a buyer to determine what it is worth to you based on actual evidence as you have done.

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As others say, make your offer - and if asked why it's so low, present your evidence.

Don't get attached to one house. Offer on a number, but always focus on value and what the house is worth to you. It might take a while but you'll find a desperate seller eventually.

The place I ended up buying started at £140K, a few months later was on at £115K. I then offered £90K, and we settled at £95K. It sticks out like a sore thumb in the sales records for the street (it's nearly half what one of neighbours on the same terrace paid five years earlier - although admittedly they have a far larger garden). And the only houses now selling on the street are those on a similar price. In short, I helped give the street a strong dose of reality in terms of pricing.

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I went to see a place last fridat up for £172k i offered £150. i am waiting to here yes or no.

Its empty and i am first time buyer but i dont think i will get it that price even though i am first time buyer mortgage agreed in princable and the place is empty

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catpaw, just walk away from this one.

For me that seems to be a red flag; but I seem to be in the minority as we have taken advice off more experienced people and the general consensus we get is that "a properties true value is only what you are prepared to pay for it". I genuinely don't understand that - we like the property and until we saw this we'd have happily made an offer that would in hindsight have been well overt the purchase price, but we don't want to overpay, we want a fair price for the property we come to buy and have the option of selling it on at market value.

Are we being totally unreasonable to be concerned?

They're waiting for an idiot to come along.

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catpaw, just walk away from this one.

They're waiting for an idiot to come along.

Thanks, that's pretty much all I was looking for.

I agree, seems to be a chancer. Real shame, everyone selling around here seems to be in a position where they don't need to sell, instead they put their houses up (often second homes) and put on a silly price tag.

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Nothing ventured - nothing gained. Try to be positive about it and I think you offered a very fair price indeed. If you think negatively about it then you are fodder for a manipulative EA.

Offer was rejected the own wants nearer the selling price. I did tell the estate agent im going to get newer car with some off the deposit when he told me.

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