When we bought the house we paid over the asking price. We originally put in an offer £5k under the asking price, as that seems to be the norm. The estate agent advised us that someone had already offered the asking price, so our offer wouldn’t even make it to the table. We ummed and aahed (revisited what we thought we could afford, phoned my parents for a sanity check, had a drink to calm our nerves…) before putting in an offer £5k over the asking price. And likely, we thought, over what the house was worth.
It was hard to judge because it’s a small street and somewhat unique in the area in that it’s not on the many school access roads and rat runs. It’s quite a privileged location, off busy roads but still near the town centre. Secondly, the house turnover is so slow in the street that there just isn’t a solid record of prices to compare to.
When the mortgage provider valued the house before they agreed to lend us the money they noted that the price was at the top end of what they’d expect houses to sell for in this street. So they agreed with us, we were probably paying a little more than we should.
Now, though, there are two houses for sale in the street. We have our first chance to see what prices are doing. The first house is on the other side of the street and along a bit. It’s desperately in need of work. It looks pretty awful, to be honest. It’s on the market for £20,000 less than we paid, but I think it would cost you at least that to turn it into a nice home. And you’ll be living in a building site for six months while the work gets done. Remarkably, it was sold within about 3 days of going on the market.
The second house is next door to us. It’s a shame, we’ve just started to get to know the neighbours. We chat over the fence a bit, and they’re quiet but friendly. Really good neighbours. And now they’re going. Their house looks a bit plain but in good condition. The bathroom looks recently updated but the kitchen is a bit drab, I’d want to update it. The garden is tidy but uninspiring. I’d say the house in general is certainly no better than this one. They’re asking £5,000 more than we paid for this one.
So there’s hope that when we renegotiate the mortgage in 4 years from now our house will have increased in value.
(The links might not work forever, but both houses are currently viewable: house that needs work, next door.)