Old fashioned beliefs about dropping asking prices

franklee

I think the logical way to look at this is to look at the overall cost of getting from A to B. For many people lower prices would make this cheaper not more expensive as the price of the house they are buying falls too. Not to mention stamp duty will be less as will fees based on a percentage like estate argent's fees.

Recent buyers are at risk but then surely they will have done their sums before buying and will be able to ride it out?

It is mainly for those downsizing that house price falls hurt but then they have probably been in the market a long time and profited from all the boom years so why worry about missing the very top of the market? Oh and the johnny come lately investors and for holidays mewers but who really cares about them?

This mania for high house prices really makes no sense to me

moanymoany

zappahey wrote: »

We sold our house six weeks ago and we took the view that it was not "real money" until it was in the bank*. We pitched our house at more than £20k less than the competition and, almost without exception, everyone thought we were nuts. Now, a mere six weeks later, I would love to hear what they think as, even in that short time, sentiment seems to have really plummeted. My view is that you only make money on your house when you downsize or die.

Anyway, I think the OP is absolutely right that people have a view that, to take any less than what they think it is worth, then they are losing money. There seems to be some difficulty in seeing the big picture about the "cost to change".

*Though, two years ago, we had a few months in rented where the money really was in the bank, while we were house hunting so there, was a slight twinge

We did exactly the same. It went on at one price at the end of Feb, but after a month the market was already showing real problems, so we dropped it £20k. The agent said it was too much, but we did it. April 12th we got an offer £5k below that from a cash buyer and we sold and are now renting.

If our house was going on now, it would go on at £20k less than we accepted. It does seem hard to think of 'losing' money - but as we had considered the house as part of our retirement funding it meant that if we didn't sell ..........

lynzpower

My view is that the housing market in the UK is very vulnerable to buyer and seller psychologies than other general consumer market in the UK.

As I see it there are whole swathes of buyers and sellers in this country who have no grasp on what "the market is" although they are all to some degree participating in it. Cue arguments of supply and demand which have never worked for me in any case ( prices will always go up, there will always be demand for XXX in this area, immigration - the poles will always need a one bed overpriced penthouse flat in Belgravia etcetc) I think that fundamentally the lack of decent educataion & knowledge about economics is.

So we face ourselves with a situation where :

joe public knows very little about international economics/ banking/ international debt/ international political obligations and the impact on our own tax & spend etc.

So the populace can be ( and have been) totally duped that prices can only go up and they have never been educated any better.

We are then finding ourselves in a situation where the populace is gaining thier "education" on economics if you can call it that from the likes iof homes under the hammer/ location/ and EAs.

The problem will always be that the EA has a vested interest as they have to work for the vendor. Despite thier pivotal position in the housing market ( setting asking prices, negotiation to get best offers etc) EAs have to by thier own code of practice work for the vendor.

When I was an E breifly, I coudnt believe what some vendors thought thier places were worth- but amazingly buyers were willing to pay WELL over the odds for properties.This is why I would never last in EA

The government in my view should have put a stop to HPI a long time ago and TOLD US WHY. EDUCATED PEOPLE as to why house prices cant keep going up, and why its NOT A GOOD THING.

Alas, they decided to leave it alone, and let it all come crashing down.

Now they seem to suggest ever more ridiculous ways of using taxpayers ( IE YOURS & MINE) to prop it all up which again sends signals out to the masses that the market SHOULD normally be high and this is just a blip.

You cant blame the majority really when the sylabbus for kids does not touch on housing markets, and so we are all ripe for being convinced by the likes of builders developers & krusty et al.

in my view the government shuld have taken responsibility a log time ago to educate people on how mortgages work, how international banking works, what economics is, and empower the masses into understanding exactly what they are getting into when they participate.

So in short, the masses have believed what they thought was good news and it is in fact bad. We wont be the last country to delude our population and we wont be the last. the government have allowed/ colluded/ created this situation and now instead of making a bold statement ( like Mr Cable) about where we are at and realistically where we can go, trying to pretend that its all ok and keeping that propaganda running.

RHemmings

lynzpower wrote: »

My view is that the housing market in the UK is very vulnerable to buyer and seller psychologies than other general consumer market in the UK.

I think this is an excellent post that makes a whole bunch of good points. (Many of the other posts are excellent too, but this one really stands out).

lynzpower

aww cheers

westv

dander wrote: »

I think the estate agents do have a partial point though when they say there's not a lot of point dropping prices. The trouble is that buyers have disappeared to the extent that even very well priced houses aren't selling.

Sure, you don't stand a chance of selling an over-priced house at the moment. But you don't have a lot of hope of selling a cheap one either.

It does seem that way at the moment. Sure, reducing the price to a competitive level will help but it certainly won't guarantee a sale.

mishmash

My EA was very honest about the state of the market. I had a few round and most valued my property £10 to £20 k higher than the valuation I have gone with.

The EA (only a youngish chap) sat me down told me about the difficulty in obtaining mortgages and the effect this has had on the buying chain, told me house prices have fallen. I really liked his honesty, he said a couple of years ago my house would have sold quickly and for 20k more, but he wanted me to have realistic expectations.

I had done my homework and a lot of reading on here, but fair play to him I think he did his best to tell it me straight. If I had been ignorant to the current climate, or one of those who think 'my house is worth more' then I might have gone with another agent promising to get me more money. I have been watching the market in my area for some time, and those with the agents highly priced have been up for a year or 2.

Mish

mrsukyankee

We had a very honest EA (the second one that we hired) and we sold in a reasonable amount of time. We then began to look for another place to live (moving from 2 bed flat to 3 bed house with garden) and we've ended up buying from the same EA whose sellers are being realistic as well. He is the only EA in this small area that has sold homes at this time in the market.

The other houses in the area, being sold through Foxtons and Winkworth, are being marketed at around £90-135,000 more than the house that we are in the midst of purchasing (houses are very similar)...and these houses have been on the market for six months or more (though you wouldn't know it by looking at property bee...but we know as we've kept our eye on the properties in this area for about a year). The sellers of these properties may not have to sell and so can hold on for years, but currently, they are still well overpriced for even the sold prices at the top of the market. These houses have not dropped their price ONCE in those many months...so who is being realistic here?

neverdespairgirl

mishmash wrote: »

The EA (only a youngish chap) sat me down told me about the difficulty in obtaining mortgages and the effect this has had on the buying chain, told me house prices have fallen. I really liked his honesty, he said a couple of years ago my house would have sold quickly and for 20k more, but he wanted me to have realistic expectations.

Sounds like a good EA, hope he does well.

neverdespairgirl

RHemmings wrote: »

I think this is an excellent post that makes a whole bunch of good points. (Many of the other posts are excellent too, but this one really stands out).

Lynzpower's posts are usually great, and always worth reading.