# Quick house buying advise



## johnnyc (Nov 18, 2008)

Hello just in the market for first house. (sussex area)

I've noticed house prices are about 20% more expensive than last year. And usually asking about 10% more than valuation. 

So do I pay for overpriced house and just accept it or do you think i should hold out until they drop back down to more realistic price. Just seems people are jumping on the bandwagon and asking for way too much for there homes.

Any way cheers


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## djgregory (Apr 2, 2013)

I dont think prices will be dropping any time soon, we bought when prices were rock bottom a couple of years back and its been increasing and increasing since then.


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## empsburna (Apr 5, 2006)

Any growth going on in the local area? What are the local estate agents saying? Are houses selling quickly for the asking price or above? What is the average time on the market for the houses?


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## S63 (Jan 5, 2007)

Property prices in Sussex won't be coming down any time soon.


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## lobotomy (Jun 23, 2006)

We're currently in a similar boat looking at the more desirable suburbs of Glasgow at the mo'

Becuase people want to live there, the houses are selling quickly, almost too quickly to even get involved... which drives up the price, because in order to secure the house you want, in the area you want, you can't **** about with speculative offers, so you look at the house valuation and add a bit which you're comfortable about... 

Prices have definitely risen up here too since 1/2 years ago when we starte dlooking initially.


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## richjohnhughes (Sep 24, 2007)

If you need a mortgage to buy the house (I presume you do) .... you might find that you will have problems in the situation. 

The lender will want to lend against the valuation figure, not the sale price.


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## djgregory (Apr 2, 2013)

richjohnhughes said:


> If you need a mortgage to buy the house (I presume you do) .... you might find that you will have problems in the situation.
> 
> The lender will want to lend against the valuation figure, not the sale price.


Correct, we were buying our house at £90,000 and the valuation from the bank was £82,000 i believe so the seller had to reduce it.


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## Andyg_TSi (Sep 6, 2013)

in the situation it is in now, i'd be looking to buy the worse house in a nice area, which gives you scope to improve the property and make substantial gains on the value.

If you can find a 'doer upper' in a nice area go for it, rather than getting something in move into condition, which you'll pay top dollar for.

Your more likely to be able to get a mortgage, borrow less for that & have a property thats gained more in value by the work you've put into it


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## richjohnhughes (Sep 24, 2007)

djgregory said:


> Correct, we were buying our house at £90,000 and the valuation from the bank was £82,000 i believe so the seller had to reduce it.


...if they want to sell to you. Or wait for another buyer with a different lender / surveyor


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## gtechpete (Aug 16, 2010)

Worth keeping an eye out for repossessed places. Some bargains to be had (but as ever more risk attached).


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## djgregory (Apr 2, 2013)

richjohnhughes said:


> ...if they want to sell to you. Or wait for another buyer with a different lender / surveyor


we used 2 independent surveyers as well as the one the bank sent and they all came out with pretty much the same price so i doubt any different banks surveyer would add £8k on to the price.


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## richjohnhughes (Sep 24, 2007)

djgregory said:


> we used 2 independent surveyers as well as the one the bank sent and they all came out with pretty much the same price so i doubt any different banks surveyer would add £8k on to the price.


Typically no, but I have know times that it has happened....but those were the good old days before the crisis.


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## adlem (Jul 6, 2008)

richjohnhughes said:


> If you need a mortgage to buy the house (I presume you do) .... you might find that you will have problems in the situation.
> 
> The lender will want to lend against the valuation figure, not the sale price.


Not neccessarily - ours was up for £195k, we paid £211k and the valuation was fine (yet to complete, that was last month) Same property two doors down has just gone for £220k. 6 months ago these properties were £190k-£200k


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## nbray67 (Mar 22, 2012)

Prices are certainly on the up, we exchanged (agreed price in Nov) contracts end of Jan '14. We paid 213k for ours, asking price was 220k, reduced from 240k. 
We bought at exactly the right time in truth as the house next door sold for 230k Dec '13 and another on the same estate has just sold for 240k May '14.

If we had held out for more on ours, priced at 155k, sold for 151k, we may have made a couple of grand more but the price bracket we were looking at 220k region, has gone up approx 10k and more in some instances.

Waiting will do you no good I'm afraid as this boom will last for a couple of years or so at least, unfortunately, anyone buying now is going to pay top dollar and when it does subside, you'll possibly be in neg equity or at best, the same price you paid a few years ago.


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## kh904 (Dec 18, 2006)

Imo, there will be a house price crash within a couple of years.

They were talking about it on the radio an hour ago, the imf have also issued warnings.
House prices can't go up at the rate they do and go up indefinitely unless we continue QE, but if QE continues then we end up in a currency crises (it's starting to happen in the states).

Interest rates will rise sooner than later and we'll see that quite a few people won't be able to cover the higher repayments. 
Yes people can fix their mortgage rates but that's it for a few years, but the average mortgage is 25 years!

Obviously some areas are effected more than others.

There are other reasons but I'm too tired to go through them at the moment.


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## richjohnhughes (Sep 24, 2007)

johnnyc said:


> Hello just in the market for first house. (sussex area)
> 
> I've noticed house prices are about 20% more expensive than last year. And usually asking about 10% more than valuation.
> 
> ...


To give more detail and explain what i was saying a little better.

imagine the lender is willing to lend 90 percent of the value of the property (*defined by the surveyor* / not the seller or buyer)

If the asking price is 110,000 (10 percent more than the valuation)
valuation is 100,000
Maximum loan in this case would be 90,000

meaning you have to find another 10,000 extra for the deposit. If you are not working with such high loan to values, then it is less of a problem....probably end up paying a slightly higher interest rate.

This is what I was trying to get at.

Interest rates WILL go up and price WILL come down......then we start all over again.


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## johnnyc (Nov 18, 2008)

Cheers for the input everyone. Its pretty much reinforced what I was thinking (buy sooner rather than later).
I'm quite lucky in that I only need about 70% mortgage. I've been looking on the market for about 2 months now and i've started noticing a few property which were sold 2 months ago back on the market(sale fell through). Also propertys have stopped selling like hot cakes. So somethings changing.


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## adlem (Jul 6, 2008)

johnnyc said:


> Cheers for the input everyone. Its pretty much reinforced what I was thinking (buy sooner rather than later).
> I'm quite lucky in that I only need about 70% mortgage. I've been looking on the market for about 2 months now and i've started noticing a few property which were sold 2 months ago back on the market(sale fell through). Also propertys have stopped selling like hot cakes. So somethings changing.


Wish things would slow down round here! Houses are sold within 5 days of going to market. Also as an aside, you'll get a much better deal interest rate wise on a 75% loan to value mortgage so it could help you have a little bit more flexibility on prices


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## Kerr (Mar 27, 2012)

kh904 said:


> Imo, there will be a house price crash within a couple of years.
> 
> They were talking about it on the radio an hour ago, the imf have also issued warnings.
> House prices can't go up at the rate they do and go up indefinitely unless we continue QE, but if QE continues then we end up in a currency crises (it's starting to happen in the states).
> ...


There has been quite a bit about house prices in the news recently.

For years it has always sounded positive that houses have gone up by x% this month and most people thought this was a good sign.

Now when they say houses have gone up x% there are now making an effort to highlight that it is actually bad for the economy.

Why didn't they make such an effort to say this years ago?

Hopefully people will sit up and take notice of this.

With any kind of debt, most people only think about the sort term. An average priced house could see mortgage payments swing by over £1000 a month if interest rates rocket.

I doubt many people have a spare £1000 in the budget every month.


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## alan hanson (May 21, 2008)

end of the day spend what you are happy with and can afford, if your not planning on moving soon or can decide when you may not lose anything


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## kh904 (Dec 18, 2006)

alan hanson said:


> end of the day spend what you are happy with and can afford, if your not planning on moving soon or can decide when you may not lose anything


Very true, but I think what people are considering affordable now may not be when (not if) rates rise. 
I think (read somewhere) the BoE historical average rate was around 7%.
Even if it went up to 4% over a period of a couple of years, it would be disastrous for many mortgage payers.


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## S63 (Jan 5, 2007)

This is exactly why many lenders are now thoroughly interrogating prospective borrowers asking personal stuff like never before, it's being criticised in certain quarters but I can only think it's a good thing in the long term.


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## developer (Apr 20, 2014)

johnnyc said:


> Hello just in the market for first house. (sussex area)
> 
> I've noticed house prices are about 20% more expensive than last year. And usually asking about 10% more than valuation.
> 
> ...


I've always operated the other way round - if I find a house that I really really like, I use man maths to make the figures work (obviously if it's within financial reach).

When you find the house that's right for you, you won't want to lose it and will need to act accordingly.

Over the longer term I firmly believe you won't lose out on property.


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## S63 (Jan 5, 2007)

developer said:


> I've always operated the other way round - if I find a house that I really really like, I use man maths to make the figures work (obviously if it's within financial reach).
> 
> When you find the house that's right for you, you won't want to lose it and will need to act accordingly.
> 
> Over the longer term I firmly believe you won't lose out on property.


You can't just use simple maths though, none of us have a crystal ball and can accurately predict how the market will perform over the lifetime of a mortgage, many people did lose properties during the crash in the 80s for this very reason.


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## developer (Apr 20, 2014)

S63 said:


> You can't just use simple maths though, none of us have a crystal ball and can accurately predict how the market will perform over the lifetime of a mortgage, many people did lose properties during the crash in the 80s for this very reason.


Granted - my point was that if the OP has seen a house he likes and can afford he should buy it rather than wait for market forces to reduce the price, by which time he'll probably have lost it.

If he just wants a house, and isn't fussy whether it's this one or that one and he can afford to wait, then follow the predictions (which is all they are).

House buying is a very emotional decision and losing one you love may not be worth the money you may or may not save.

I've never lost on a property, though, as it's my business, I may apply different purchase criteria.


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## johnnyc (Nov 18, 2008)

Well just a quick update. 

I've looked at a old 2 bed terrace house built 1890 something like that.

There after £210.000. It was originally sold at £215.000 however the buyer pulled out due to surveyor stating mold/damp/moisture in wall.

Couple of questions. 
1)Estate agents states there is no damp issue and shows me the property and to be fair i cant see any signs of damp or mold. But then what do I know. Estate agent recons it could be because the house has been empty through out winter and doors and window closed. Hence extra moisture

2) I've made an offer for £200k and estate agent has asked me how much deposit do I have Why do they ask that ? Does it make any difference if i have say 10k and borrowing 190k or if i have 100k and borrowing 100k.

3) Lastly as already mentioned. As house prices have rocketed this year do people still accept offers anymore or do most people get asking prices. 

Any help cheers


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## richjohnhughes (Sep 24, 2007)

johnnyc said:


> Well just a quick update.
> 
> I've looked at a old 2 bed terrace house built 1890 something like that.
> 
> ...


1) If the surveyor says there is damp....then i would be inclined to believe him rather than the estate agent looking to make a commission.

I presume your survey will show the same and this could be a problem with the mortgage lender. Too many variables to give you an answer.

2) It sounds like the estate agent is trying to judge if you are a "good" buyer. A buyer with a large deposit will have less problems getting approved for the loan and in theory be able to complete faster.

Could also come back to the damp issue. A lender is more likely to lend against a property with damp with a 50 percent deposit than a 5 percent one.

3) Some people will take an offer and other no. In the end, the prices are driven by the market at that moment in time. The house is worth what someone is willing to pay for it. (and how desperate the seller is)

good luck.


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## Lewis. (Feb 26, 2008)

Rule number one. Do not believe anything any estate agent tells you. They are lying scumbags. All of them. House bubble is soon to burst so I wouldn't stress too much over it. Make an offer that you think is reasonable. If they don't accept move on there will always be something else.

Some good points above too. 

We are trying to buy a house at the moment. You do learn a lot.

In answer to your queries:

1). If a surveyor has identified damp then it will have damp. Estate agents know jack **** about this kind of thing, even though they may claim otherwise. Make no mistake, all they are interested in is getting your money. 

2). They ask about your deposit as theoretically, the more you have the more likely you are to have a successful mortgage application. Obviously the more deposit you have the less you will have to borrow = more reliable buyer.

3). Course people accept offers. Not everyone has a **** ton of money sitting there to buy a house. We've had several offers accepted already. All below asking price. Just don't take the **** and use common sense. 

Good luck, it's a hellish experience!


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## Andyg_TSi (Sep 6, 2013)

As above. 

1. Damp/mould can be caused by number of different factors, the simplest being a lack of air circulation, due to blocked vents and/or blocked gutters etc.
dont automatically assume that the cause of damp and/or mould is going to be worse case scenario and is goung to be ££££ to fix.

2. As above, in the current climate, someone with a big deposit is more likely going to be successful in a mortgage application.

3. Regardless of the asking price, a house is only worth what someone is willing to pay, so of course people do accept offers.
estate agents price houses slightly more than actually worth, but a vendor will have a price they're willing to sell at which is usually lower

with the information given to you at point 1, you have extra barganing power as this 'damp issue' will require looking at.

id be offering £190k as a cheeky bid to test the water as that gives you more room to negotiate a deal.

good luck


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## S63 (Jan 5, 2007)

I could be wrong but I seem to remember that if the survey was done recently it is possible to buy the report from the unsuccessful buyer.


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## shane_ctr (Dec 17, 2006)

adlem said:


> Wish things would slow down round here! Houses are sold within 5 days of going to market. Also as an aside, you'll get a much better deal interest rate wise on a 75% loan to value mortgage so it could help you have a little bit more flexibility on prices


That long? I own a new estate agents in ipswich we have been open since last September and have already exceeded expectations, your lucky if anything under 250k is last 24/48hrs to be honest. Even big properties are moving quickly took a 350k house on last Saturday come Monday it was SSTC


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