Crazy not to accept offer?

stevie_wonder

Hi all,

Can you give me your thoughts on whether or not I am being daft turning down the offer we've had on our house.
We live in Portsmouth and bought our 3 bde terrace for 190k in Oct 2006. We went on the market to sell in June 2007, and accepted an offer at 205k, this fell through, we went back on again and accepted another offer again at 205k. This one also fell through in Jan 2008. The viewings dried up and so did the offers (familiar story I'm sure). We took the house off the market for six months and went back on in October 2008, priced at 190 (not 205) and got an offer of 165, which we turned down. Since then the viewings had been sparse before xmas, but have picked up in the new year. We had an offer at 152, which the buyer has now upped to 165. I still can't stomach that much of a loss of equity, and am concerned that we wont be able to make it up on the next property. Do you think I am crazy not to accept the offer?

pinkshoes

stevie_wonder wrote: »

We had an offer at 152, which the buyer has now upped to 165. I still can't stomach that much of a loss of equity, and am concerned that we wont be able to make it up on the next property. Do you think I am crazy not to accept the offer?

Can I ask why you bought a 3 bed terrace in October 2006, then only 8 months later put it on the market???

Do you NEED to move?

A loss of equity is just money, so it depends what's more important to you - your reason for wanting to move/sell, or a loss of money?

If selling and moving will make you happy, then a loss of £25k is nothing in terms of a lifetime of happiness. If you'd rather have the £25k, then why not sit tight and make do with what you have, or rent it out?

stevie_wonder

We moved to be close to my family, however that hasn't worked out for my wife. She wants to move, but I dont. I'm sure she'd say losing the 25k is worth it, but she has unrealistic expectations about moving elsewhere and what we could afford. Plus I dont want to go into rented again, I want a home!

QTPie

stevie_wonder wrote: »

We moved to be close to my family, however that hasn't worked out for my wife. She wants to move, but I dont. I'm sure she'd say losing the 25k is worth it, but she has unrealistic expectations about moving elsewhere and what we could afford. Plus I dont want to go into rented again, I want a home!

I think that you need to sort all of that out first... clearly you are not happy with the move, but your wife really wants to move.... The first thing is that you need to work it out between you.

Secondly, if you do move, do you know where you will move to? Have you looked at houses in the area? If you accepted £165k on your current house, what you can afford in that new area (you said that you believe that you wife has "unrealistic expectations"...)? If you will need/want additional financing, have you spoken to a mortgage advisor?

Will you go into negative equity (i.e. still owe money to the bank) if you sell at £165k?

As pinkshoes says, the most important thing is not the equity in your house. The most important thing is "where next": with the drop in equity, can you afford to go on and comfortably afford to live in the type of house you want, in the area you want?

One thing that you COULD consider doing (but it would need to be a more long term solution) is hang on to your current house and rent it out. Gamble that in 5/7/10 years it's value has picked up (and sell it then). At the moment you really do have to undercut the market to sell, hopefully things will stabilise and, eventually go back up. BUT that is a gamble and it probably will take some years. Renting out is not suitable for everyone (hassle, outlay, maintenance).

You say you don't like renting, but - to be honest - that MAY be your best step going forward (for 6 months or so). If you are moving to a new area that you are not very familiar with, give you and your wife some time to work out if you REALLY like the area before you buy. You don't want the same to happen again (buy a house, move in, then 8 months later...). Just a thought.

Good luck
QT

maninthestreet

stevie_wonder wrote: »

We moved to be close to my family, however that hasn't worked out for my wife. She wants to move, but I dont. I'm sure she'd say losing the 25k is worth it, but she has unrealistic expectations about moving elsewhere and what we could afford. Plus I dont want to go into rented again, I want a home!

So you are moving solely to be further away from your family????

anselld

The regional house price index in Q4 2006 was 595.4
Q4 2008 was 526.8 and falling, a drop of 11.5%
Based on your 2006 sale of £190,000 that would give you a Dec 08 valuation of £168,000

So assuming you feel you bought at a fair price and taking account of falling market, £165,000 seems reasonable, ie purely market driven. The trick will be buying the next one at the right price assuming you decide to move.

The other way to value is to look up recent sold prices in your area on the net and then project these forward using the house price index again. (Or use zoopla, mouseprice, etc though these seem slightly inflated in today's market)