How much is "Overpaying?"

7 questions to help you avoid overpaying for your next home.
1. Could you sell the property immediately for what you paid for it?
2. What's your Loan to Value?
3. How long is your mortgage payment fixed for?
4. When might you need to move next?
5. How secure is your income and for how long?
6. What's likely to happen to the market for your property if you need to move again?
7. What's the worst case scenario, and are you prepared for it?
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[@richardl9902]

I am in Cornwall and I’m starting to see some signs of problems for people one property listed this week for £305 thousand and was purchased end of 2022 for £360 thousand,you don’t lose money like that unless you’re in trouble

[@healthiswealth6797]

A lot of properties were brought just using virtual tours over covid !! Then obs problem have come up since

[@Ratatouille421]

Also in Cornwall and seeing similar listings. A recent one sold in 2022 for £400k and must've since had 30k spent on updating. Been on the market for months reducing gradually and now at 400k but still won't sell and similar houses coming on under at £375k mark...ouch.

[@oanalesnic79]

I deeply appreciate the wealth of knowledge you share with us. Your expertise truly makes you an outstanding educator in the field.

[@janefalcone7852]

I think the impact of the banks Valuer/Surveyor will play a big part in this. Odds are it will be down valued. The buyer can't plug the gap with their own cash and the seller will have the down valuation recorded in the system for their property. In my experience no other valuer/surveyor will go against each other. Once the down valuation is recorded it's basically going to dictate what happens to all parties 😕

[@RobynSaul]

HAVE to move, choosing to buy instead of rent. We've found the first house, after six months of looking that, we like enough that our thoughts were "what CAN we afford to offer" rather than "how low do we think we shoud go". We know it's not the best time, but we also really want to own this house. Thanks for all your advice over the last while, Charlie. Videos like this affirm to me, that despite the risks, we're willing to take them and pay the price for this place.

[@stevo728822]

You know you're overpaying when the seller accepts your offer. The rest is a game of bluff like in poker.

[@louisemartin7728]

Thank you Charlie ✨🌟✨

[@impamiizgraa]

Fantastic questions - thank you! I just made an offer that was accepted and I think I could have gotten away with making an offer for £5000 less. Now I do the sums, it wouldn't make a great difference in SDLT, monthly repayment or anything else that affects my pocket - and most reassuringly, I can honestly give the 'right' answer to all these questions. So I've stopped wondering and happy to proceed with the sale -- and gazundering and gazumping is immoral, people!!! Wish me luck :)

[@MovingHomewithCharlie]

Fantastic!

[@toiletrollholder]

My solicitor has suggested I may be overpaying. He's suggested I use the survey results to get a reduction. I was happy with my offer but then disappointed that some important work needs doing. Vendors were pushing for exchange but I'm going to try for a reduction even though it's late in the day.

[@stevo728822]

If the work is serious, I would pull out of the deal. Plenty of other houses. If the seller didn't state the issue on their declaration form then they lied.

[@MM-px9zx]

Same situation happened to me: agreed on a price I was comfortable with but then survey picked up major structural issues with roof, chimney breasts and flues, ground floor damp and front facade/re-pointing work that needed to be done, which I was not prepared to commit to. Vendors didn’t seem too concerned about the issues picked up on the survey. I withdrew the offer in the end. Extremely disappointing unfortunately!

[@toiletrollholder]

@@stevo728822 it's important to do but don't think they would have known. I doubt they had a survey done when they bought cos it's not an old house & they were very young. But solicitor said my offer was based on what I could see so this can be a reduction as I couldn't see it.

[@sjtfunclub]

Hi Charlie, what do you make of the latest report by the Institute of Chartered Surveyors? I would think it's bang on, probably reflects most accurately what is going on with the market (with the caveat that buyers usually knock off more of the asking price after the survey has been done). I don't understand why publications give much more space to the Halifax index etc and this one is hardly mentioned. Also, have you ever lined up all these different metrics and compared to the land registry data to see how it all tallies, and what the time lag is?

[@simotronic]

The LTV number is moot if you're a cash buyer. However, a cash buyer should definitely have a valuation and, this is important, the preficted value in the next six months, especially if there's a continued downwards trend. A banking system that can't properly predict the economy and hung up on reducing inflation is causing tremendous stress in the housing market. With respecg to buying a property that one is comfortable wigh shoukc invlude the location, location, location criteria. Those things are more difficult to change than replacing the roof!

[@TheCatlady63]

When we bought our first house together we took out an insurance through our bank which would pay the mortgage if my husband was taken ill or lost his job. It was a good step as he was made redundant but luckily was back in work 9 months later. Still a stressful time. we had two children as well under 10.

[@Matt-xd1gi]

Regarding the reservation fee. Ask the seller to also sign to pay it if they pull out

[@mikedennington8856]

A strategy I have used for an offer is: write to the agent and make an offer, after an inspection, and say it is based on the following criteria, a, b, c, etc. In the a,b,c, etc I put in things like redecoration needed, new roof need etc coming from the inspection as well as my own observations. I write it using as many words as I can in order to allow the agent to give it to the seller and give them as many details from me to justify the offer. One offer I had in the past had 7 pages in the email. I had a comment from the seller thanking me for so much detail, which they did not really read as I thought they would not, and it got me a lot off. This may work for some people but of course every house/person/situation is different so may not work for all offers. Just sharing what I did.

[@evorealtime]

The last two offers I made: one was casually mentioning what I would be prepared to pay but I felt it was too much of a gap to what the seller was asking, after a month they phoned and asked whether I wanted to make that offer as it would be accepted and I lived there 11 years. The other that was rejected was detailed, not subject to survey but had a schedule of repairs including photos and two prices, one as it was, one if they fixed them, along with recent discounts on comparable completions and other background info. That house is still for sale a long time later. I don't think success was related to the two approaches, the first seller wanted to move, the other already had and didn't need to sell so wasn't motivated.

[@amandaharrison5138]

Charlie, how do you go about working out the property’s current value?

[@MillyWeeble]

Looking at the North-East, it's all over-priced and awful (small/rough homes, terrible locations). There were a few reductions before Xmas but it's now back to silly asking prices 😞

[@ferguselstone9655]

Hi Charlie. In the area I’m looking to buy, (Didsbury, Greater Manchester), we aren’t seeing any drop in houses. Prices come and go within the month, usually over asking price.

[@andrewlam5021]

Give it 12 to 24 months. The north will eventually catch up with the south with price reduction.

[@richardliiddle1032]

If a property has been on the market for a long time you wouldn't be thinking of overpaying you would offer less but if its in a sought-after place you could have 20 plus people waiting to buy my advise would be buy what you can afford the market may fall but if interest rates start to come down house prices will rise it all comes down to supply and demand

[@annieanonymous611]

I think I'm in only bit of the country that is doing well. Houses priced in 'lower bands' (that is £270k upward towards £300/£320k for small properties) selling like hotcakes here now. 😕

[@TMZ-5jr]

I would include your finance costs (most important) if you are a cash buyer your 250k purchase after 25 years cost you 250k. If your (for example) mortgaged with 7% interest rate after 30 years your spending an additional several 100k in interest cost. So your house is actually costing you over 500k. Your overpaying if the future value is than than your finance cost.

[@sjtfunclub]

This is not technically correct. As a cash buyer you have an option to put that money into something else which could have earned money for you so you need to take that into consideration too. Obviously, just like Charlie points out there are many different motives for buying a house. You need to know why you are doing it and what you want out of it.

[@stucifdgdfsg4rt5]

TLDR: in the current situation you are overpaying. 😅

[@ieatlotsoftoast]

All those people who bought a house in the last few years with epc of e or f at asking price have overpaid

[@RabJ208]

Does Charlie speak on the importance of EPC's? I don't know? Does he? The world is going green crazy and down the line EPC ratings are going to become very relevant.

[@dlc2479]

19:11 Just to point out that a landlord can't just kick someone out immediately for none payment. In reality, it would take a minimum of 6 months to evict them but realistically 1 year. So I think it's better to rent because at least your credit score won't be ruined and you can still rent out a spare room if necessary.

[@stevo728822]

It depends if the tenant is on an AST or on monthly rolling tenancy. Outside of an AST you can get them out quick. You issue a Section 21 two months before the end of the AST.

[@stephengreen8986]

I landlord can get a CCJ against you. That will cramp your style. Cheap action to take compared to the other actions.

[@dlc2479]

@stephengreen8986 They get removed after 6 years also because they're a renter not an owner, you can't put a lien on a house they don't own. This is a serious issue, ask any landlord who's been stung

[@dlc2479]

@stevo728822 pretty sure most tenancies are AST these days. Landlords ought to get ready, you can raise rents as much as you want they're only as good as the jobs market. If ppl don't get paid, landlords won't get paid and they'll have to foot the bill for any eviction process plus any damage done to the property.

[@louisemartin7728]

There is a 'thing' now that you can subscribe to, in social and private renting which tracks any late or missed rent payments. I have forgotten what it is called. It is for your credit score, for if you are saving for a future mortgage application. I wish I could remember what it is called.

[@stevep9221]

You should get 30% off or you are a muggle and bad with money. That means you are a never going to be rich. Go to Land Registry and search prices paid. You will find 50% and 40% of the high April 23 prices. The ONS HPI are including only 16% of all sales in the UK and include new house sales twice to hide the drops. Find the real price and get 30% off at the minimum.

[@SILKY_999]

That is not possible in Popular areas like in Manchester right now unless there over 500k plus houses !!!!

[@davewright9312]

I guess Steve is still renting 🤣

[@stevep9221]

Paid mortgage of on 50th birthday and inherited from my father who had a farmhouse and villa in Spain and my father-in-law who was a Commodore in the RN. No not renting but will not allow this scam to go on of lies about house prices especially from the government and snake oil salesman ripping of dumb ar5es. @@davewright9312

[@stevo728822]

There are no new nuclear power stations, except where existing nuclear power stations are located.

[@ayemon946]

Dream on

[@andrewtaylor6737]

Troll!

[@RabJ208]

You can type things like "dream on" because when you do that you risk being labelled a "troll" and spoiling the rest of your day. Lol

[@JayGrofte]

Anything over £175k is overpaying

[@leemarsden1846]

Where?

[@leemarsden1846]

For what? A 500 room hotel? A 1 bed terrace?

[@seemasinha5972]

Any property ?

[@healthiswealth6797]

Uk Ponzi scheme , watch a average terrace house go for 1 million in 15-20 years . Till uk changes it’s relationship with house profits then the unstoppable speeding train will continue

[@juangomezfuentes8825]

That is what I think for 2 bed house. I know that the market is the market but anything over that I am always considered expensive. Cars for example I consider them cheap in general for what they are. Build a house, specially when it is done in mass, doesnt cost that much. All the value goes in the freaking ground.