Other than just maximising their fees?
Am interested in buying the 2-bed flat I currently rent. Nice flat, well done out but small and no storage space except 2 built in wardrobes.

It’s in a nice enough part of SE London but not the best. Owner has had one valuation – £300k ‘with a view to selling at £275’ 😯

Mouseprice says 2-bed flats in this road sold at £212k in Feb and £242 in May so there’s no justification for pricing so high that I can see – this area’s not that desirable, it’s not Dulwich or Clapham!

I don’t get the ‘put on the market at £300 to sell at £275. Why not just market at £275 and give that as the price? Is that a strategy to make me think it’s already been discounted and therefore feel like I’m getting a deal? Cos I think it’s a rip off and not justified by recent selling prices or the general prices for 2-bed flats on Right Move…

I’m expecting them to actually be hoping for £225 or thereabouts. Does that sound right?

Just one valuation?

So ignore the estate agent and offer the owner £225k

Strategy?
Make as much money as possible for doing as little work as possible.

House prices are, as far as I’m concerned, simply estate agents pushing up the prices constantly. In fact, I’d quite happily place the blame of the housing market crash entirely at the door of the estate agents.

But to answer your question…yes, I think they always overprice for both reasons.

They’ll put it on a bit higher expecting people to try and knock off around 10% thinking they are getting a good deal.

The problem is if the vendor has been told by the estate agent that they can achieve £275,000 they are going to take some convincing to drop it to £225,000. That is a fair old chunk to knock off but you can always ask.

We put in an offer for the flat we rented once, the price difference was similar to this but we liked the place and could only afford what we could afford so made the owner the offer, it was turned down pretty much instantaneously, which was fair enough as he sold it for pretty much the valuation within 6 weeks.

If a similar flat went for 242 in May then you need to be looking at at least north of this price to be credible to account for the 4 month increase in values.

I’m expecting them to actually be hoping for £225 or thereabouts. Does that sound right?

No

It sounds like they are expecting £275k

(From what you’ve already told us)

£300k ‘with a view to selling at £275’

Find out what it was bought for from zoopla or similar sites, then use nationwide’s a house price index calculator which will show you what its worth according to market variations since the last sale.

However if its in London then all sense and reality goes out of the window, no ones your friend and it will prob end up in a bidding war and go for £325k

Most people go for 3 valuations before putting their house on the market. The estate agent balances between what the owner usually thinks it’s worth, what they think they can sell it for to maximise their commission and what will sell quickly to maximise their commission (see the common thread).

Plus it would be naive to think that estate agents want anything else than talk up the market and prices.

Your assessment of the local market very much is dependent on the state, location and desire to sell of the two other properties. Unless all three are identical then valuation is difficult.

And I do feel for you paying that much for a flat when I have just bought a period 4 bed detached house surrounded by fields for 100k less! Unlucky

House prices are, as far as I’m concerned, simply estate agents pushing up the prices constantly. In fact, I’d quite happily place the blame of the housing market crash entirely at the door of the estate agents.

This.
3 Estate agents valued my house, the top price was £50’000 more than the bottom price. It sold for £5’000 less than the bottom price.

I have yet to meet an Estate Agent who is not a charlatan.

Estate agents?
Must resist, must resist, must resist to give my opinion of them…..

OK then lets get sensible

Does your landlord know youd like to buy it?
Whatever the answer ask for 3 valuations as described and see what they are
The agents arent that stupid, their fee depends on a sale so if they price ridiculously to flatter a seller they dont see the wonga for ages if at all

Now bearing in mind that the markets on the up, and of course they have a “hot” buyer, their valuations will probably be at the upper end of reality
Please note markets on the up and hot buyers are estate agent speak as opposed to reality 🙂

Whats for sale locally, at what price and is it selling is probably a better index
As you said recent sale prices would be of use too

Armed with all the above speak to the bank/BS and get a mortgage agreed in principle
Better still ask for a letter of intent showing you have funds and are good to go

Then talk to the landlord, explain youve done your research on whats a fair price, show him/her that you have the cash and are able to proceed with the sale quickly, mention that a private sale is in both of your best interests and see what you can agree on

Only problem is that they believe the lying scum telling them that they can easily get £350k for it……………….

They think I’m a ‘hot buyer’ because I’ve said I like the flat and I’d like to buy it:

But now I’ve seen what they expect for it, add in the monthly service charge/ground rent of £190pcm (which as well as making it less affordable for me, will also make it harder for me to sell in the future), and what else I can get priced at £300k (both here and in nicer parts of S London, I’ve pretty much walked into the freezer…

The mind boggles that anyone thinks people have that much money for a small 2 bed flat in far from the best area!

Estate agents are in competition when they give valuations, too low and it goes to another agent. As for advertised at £300k and looking for £275k that’s because buyers want to feel they’ve knocked the seller down a bit. Are the other fiats which have sold on the road similar size etc ?

As for strategy I would offer the £225 with reference to the other sales. I would also start looking for a place to buy or rent as you might get turfed out should they sell it.

Estate agents want to make money, as for pushing up house prices thats people over stretching themselves in the vague hope that house prices always rise and cheap credit being available for ever.

Sellers are also caught in the trap of believing that an estimate is the same as the price. What it’s worth is only what somebody pays for it, until money changes hands it’s value is uncertain.

you can still buy TWO terraced houses in fairly decent areas of Sheffield for that sort of money. the local riding is better too…

Understood @ianfitz but the employment prospects are quite different, that’s why the values are so different

Agreed, good employment is easier to find down south – which is why first rate people get the few excellent jobs there are in the good riding, walking, climbing etc areas and we let the second-raters go and eat smoke in London. 😉

But now I’ve seen what they expect for it, add in the monthly service charge/ground rent of £190pcm (which as well as making it less affordable for me, will also make it harder for me to sell in the future), and what else I can get priced at £300k (both here and in nicer parts of S London, I’ve pretty much walked into the freezer…

Don’t confuse what you can afford with what someone else will pay…

And just buying 2 in Sheffield, pah! For that money you could buy almost all the 2-bed flats for sale in the town next to us 🙂

http://www.rightmove.co.uk/property-for-sale/Selkirk/2-bed-flats.html

Mouseprice and Zoopla use quite a basic values calculator and it covers property types over a number of postcode areas. It is pretty simple so just punching in the postcide will give you an average valaution and take little account of the different aspect, feel, neighbourhood and other less tangible elements that go into what the value of a property is.

As the surveyor at work says – valuation is a black art.

One of the best bargaining tools is what the mortgage company are prepared to lend in the area as this in recent times has been the voice of caution to rising house values. If the mortgage company won’t support the valaution the estate agents will struggle to sell at the suggested £275K.

How much you can afford and how much you want the flat will determine what you are comfortable with paying.

I’ve seen strategies at both end of the scale.
One priced low (I assume for a quick turnaround) with a very high pressure pitch (low commission). Another priced far too high, just to get the business (high commission). The agent who priced high has a strategy of getting the business then making the vendor reduce to a more realistic level following a couple of months of no interest (I’ve seen them do this on multiple properties). Makes sense; first and foremost they want the business and are happy to play the long game (to the detriment of the vendor)
You need at LEAST 3 valuations.

sell under value for the seller and charge over the value for the buyer.

scumbags.

House prices are, as far as I’m concerned, simply estate agents pushing up the prices constantly. In fact, I’d quite happily place the blame of the housing market crash entirely at the door of the estate agents.

Almost, but not quite. Certainly the estate agents are incentivised towards higher prices as it increases their commissions. However, we operate in a capitalist free market economy of supply and demand. We have a housing shortage thereby demand outstrips supply, ergo the prices increase.

I am becoming more and more convinced that the major house building firms operate some kind of cartel. It is not in their interests to build too many more houses as the increase in supply will reduce house prices and their profit margins. I would even go so far as to suggest that there are probably healthy donations made to political parties by these firms to ensure legislation doesn’t come in to increase production volumes.

House building needs to change to some kind of public ownership, not necessarily nationalised, but possibly a community share scheme, whereby the profits from selling new homes are fed directly back into the community within which they are built – new schools, medical centres, jobs for local people in terms of building and maintaining them.

The capitalist model of free market economy is now proven to be fundamentally floored, especially in the UK where we have valued our economy on the spurious value of property prices with unrealistic prices that in no way reflect the true and actual cost of building the property. Its all being based on money that doesn’t exist, credit and borrowing from institutions that also do not have the money. the future of the UK’s economy is very bleak IMO, it is based on nothing but an illusion of wealth.

A new model of shared public ownership has to be developed, otherwise the disparity between the have’s and have not’s will become increasingly pronounced to the detriment of social welfare and law and order.

there’s no justification for pricing so high that I can see

That there Laaaandarn innit!

We bought a property we were renting about 3 years ago (bottom of the market more or less, with the stamp duty holiday for first time buyers, we did pretty well IMO).

TBH I think Estate agents have probably gotten so used to receiving low offers that they have just taken to inflating valuations even more than they used to, the fact that they gave a valuation of “300k with a view to selling at 275K” means it’s worth no more than 275k…

were they aware of your interest in buying the property when they valued it? Were you present when they viewed it? These things could also factor in their “Calculations”…

Who actually got them in for the valuation?

Use the online house price sites and look at the wider area (sounds like you already did.

Get yourself 3 solid valuations, try not to let them know the current tenant is interested in buying the property.

It’s all about arriving at an agreed value with the vendor, not the estate agents.

Bare in mind you have some valuable bargaining chips too, when negotiating with the vendor; there’s no chain and they would be able to get a nice quick sale, they don’t have to have it on the market or even involve an estate agent, saving them additional fees.

Good luck whatever ends up happening.

add in the monthly service charge/ground rent of £190pcm

I’m concerned that this didn’t put you off before.

Have you even looked at alternatives?

assuming 20% deposit thats nearly 1200 a month just to service the mortgage and the service charge

add in council tax and thats one expensive 2 bed flat.

unless the foyer has a concierge and a pool 😉

I’m concerned that this didn’t put you off before.

Have you even looked at alternatives?

It has.
I thought I’d get a valuation to see what the likely price would be. Having seen such an absurd price I’m looking wider, and what I can get for £300 is vastly superior in what I’d deem better areas – Dulwich + Streatham

Estate agents should be nationalised. They are pointless. Stick all houses up on a website, you arrange to view, you make an offer. Pay £500 admin. They really do nothing useful, do they?

Sounds like this was a good shove to encourage you to look elsewhere. Its easy to get a bit settled and complacent. Why ate you looking at 300k properties if you where hoping to spend 225k?

I have had experience of this from both ends. We had a place in London rented out and are renting a house in Kent while we figure out what we want to do with our lives.

Last year, our tenant in the place in London asked us if we’d sell the place to them, we agreed to get some valuations and come together to talk about it.

The tenant put an offer of about 300k on the table. Sounded pretty good. Three estate agents came through the door, two said to list for 330 and 335, with an expectation of achieving 325-330.

This was SO much more than the tenant was offering that we couldn’t accept the tenants offer. The tenant left, sadly, and we listed with the shiny-suited estate agent who, predictably, had given us the highest estimate.

Long story short. We changed agents after no nibbles in 8 weeks, listed for 315 and sold for 300. We then had to pay 6k estate agents fees on top of that, so we would have been a lot better off accepting the tenants’ offer.

This year, we asked our landlords if they would sell their place to us.

We then watched as EXACTLY the same situation played out for us.

The estate agents told the landlords that they would achieve 40-60k better than our best offer (which we felt was probably 10k over true value). The landlords saw the pound signs and turned us down.

We are now leaving, after having an offer accepted on a place up the road.

The moral of this long (sorry) post, is that estate agents are bastards. They over-inflate the listing price to get you on their books, then will wait the weeks and months it takes to slowly erode their fictional valuation. The price will drop, and somebody on the open market will get it for a bargain.

Suggest to the landlord that he puts it on the open market. Leave your offer on the table. If it sells for more, good for them. If they get bored and sell to you, good for you.

Well, to be fair, the value of a property is subjective, it’s between two values depending on who is looking. If you put it on at a higher value then someone may come along in that 8 weeks who’s desperate for it – the more you lower the price the more CHANCE there is of a buyer wandering by.

However you should be able to choose this strategy or not.

£225k sounds way too low to me, unless your flat is markedly inferior to the one which went for 242k. I would predict that with valuations around the 300 achieving 275 mark, there is no way the landlord is going to let it go for much less than 260.

We’ve a tenanted house on a nicieish street in a not so nice area in se London. Been keeping an eye on for sale prices on the street and there’s three similar houses sold subject to contract that had asking prices around 15-20 % more than I reckon asking prices were this time last year. That’s no indication of what the offer prices were of course, but I think that prices are definitely rising fast in the more affordable areas.

I think that prices are definitely rising fast in the more affordable areas.

Here’s my theory based on a quick comparison on Rightmove between Sydenham/Forest Hill (lower down the scale of desirability) compared with Dulwich and Streatham (SW postcode, which does seem to count in London Village!)

Prices in the nicer areas are now so high that people are looking at the less desirable areas. This high demand for limited supply is pushing up prices in areas which were previously cheap.

The more ‘mature’ areas are not rising at the same rate as people can’t afford it. But shortly, the ‘cheaper’ areas will soon be at the same level…

The Overground links Forest Hill/Sydenham with the City which is means people with higher incomes are now willing to live there.

These people are forgetting to look at the more mature areas and don’t realise they’re paying the same to live in the ‘cheaper’ areas…

We went with the highest valuation, sold within 2 weeks and for above the asking price. We paid 0.9% comission which was negotiated down from their original fee.

Estate agents are only arseholes because we let them be. (and it seems they have an easier job being an arsehole down south)

£6k fees on a 300k sales! 😯

£6k fees on a 300k sales!

Including VAT, but yep. There seemed to be an agreement *cough – pricefix – cough* among local estate agents.

just FYI

I have just used: http://www.housesimple.co.uk/ (plenty other similar deals available)

for £195 + VAT I got – basic advert constructed(inc photos and floor layout, EPC is extra), I then added/updated description text, this ad then goes on ‘usual house websites’ for 6 months, they field initial calls and give callers your no (*so you have to arrange and do viewings and deal with all enquiries and deal with prices negotiations etc etc)

now sold stc, and of all the people who called I’d say only 1 were ‘tourists’, rest seemed all genuine, in a nutshell 195+VAT isn’t quite throwaway money but is well worth a punt when compared to 1% (*approx) of house price

judging by this strategy what strategy ? 😉

for real ? 😆

genuine lol

Estate agents are commission agents acting for the seller not the buyer. Their job is to get the highest price possible for the asset. The problem I have with them is that they are usually ignorant of planning rules, surveying, mortgage issues, market trends etc etc In the USA and other parts they have to be qualified and generally are much more knowledgeable.

The question is how the bank would value the property for mortgage purposes, also you need to work out what is the maximum you will pay.