What is is with old ladies and their houses?

harrup

Geenie wrote: »

Try and understand where the old lady is coming from and then see if you would act differently!

Her home is probably the most valuable asset she has, and is the result of 50 years work, not over spending, and living within her means.

She hasn't got a job or years ahead to claw back any loss of revenue from a sale, and savings if any, are probably being depleted due the cost of living, lack of interest.

She could be thinking about possible medical or residential care needed in the coming years, and also about passing on something to her children.

When all this is factored in, I think every old lady has a perfect right to stick to what they want.

NO!!! Wrong!

I must protest vehemently.

I think every person over 70 has a duty to sell me their property at a price I find acceptable and agreeable.



Course you are right. It's a case of supreme sour grapes on my side*. Although....some elderly folk are quite prepared to cut off their nose to spite their face due to their lack of willigness to negotiate. They will not budge for the sheer principle and joy of stubbornness of it! LOL. Pity, since often the only one profiteering from their stalwart stance is the taxman after they pass away.

* years ago, my stepfather bequeathed me his house and "estate". He had no children and there was no one else with a claim to his estate either. Except....he probably felt bad that he had neglected his sibling's 2 children in his will, thus, he stipulated I had to pay them £ 50 000 each within 6 month after his death. This wouldn't have been a problem if he hadn't :

a) vastly overestimated the price of his house

b) had a supreme gambling problem....meaning his "estate" had vanished in the various Casinos. Plus, to finance his gambling - he must have had a bad losing streak - he had remortgaged the house just a few months before his death. Ho-hum.

c) vastly underestimated the amount of tax I would have to pay as a non 1st degree blood relative.

I ended up declining the inheritance as it would have cost me a fortune. Indeed, it cost me several 1000 £'s just in solicitors fees!

My solicitor commiserated but said it was an ubiquitous problem. Older people routinely overestimating the price of their property and underestimating the tax burden on their beneficiaries that is, not gambling.

Geenie

BettiePage wrote: »

Shame the following generations haven't had much chance of having the same in recent years........

They didn't spend spend and borrow, but lived within their means. So don't blame the old lady for being prudent when the following generations were not.

pandamonia

dont worry most will be dead in a few years and their homes up for sale.

mr.broderick

pandamonia wrote: »

dont worry most will be dead in a few years and their homes up for sale.

Charming :rolleyes:

dopester

Primrose wrote: »

I hope that if I live long enough to be one of those elderly ladies and find myself in a similar position, I'll also not be stupid enough to fall for the first slick estate agent telling me I've got to drop the price. We can't stop growing old, but we don't have to be stupid. What's that old joke doing the e-mail rounds - Don't mess with Seniors ?? Of course the estate agent will tell you to drop the price. They're desperate at the moment to stop themselves going out of business and a sale is a sale, even if it's at a reduced price.

You've got the same mindset that is part of the problem.

The OP has nothing to worry about. Prices can't be held up in the long term by even loads of reluctant sellers who refuse to cut prices.

That is how a crash works harrup.

Asset prices rise not because of "buying" per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else - including those who own some of that asset and those who do not - need do is nothing.

Conversely, for prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high.

If no other bids are competing with that buyer's, then the value of the asset falls, and it falls for everyone who owns it. If a million other people own it, then their net worth goes down even though they did nothing. Two investors made it happen by transacting, and the rest of the investors made it happen by choosing not to disagree with their price. Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land.

harrup

dopester wrote: »

You've got the same mindset that is part of the problem.

The OP has nothing to worry about. Prices can't be held up in the long term by even loads of reluctant sellers who refuse to cut prices.

That is how a crash works harrup.

Not sure that reply was directed at me....or that the quote you attached was from you. But if it was, I have a question:

"Asset prices rise not because of "buying" per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else - including those who own some of that asset and those who do not - need do is nothing. "

What does " do nothing" mean in this particular context?

I never "agreed" that house prices should rise to ridicuous levels. I bought ONE house 20 + years ago at a 1/5 of the price ( £ 65000, to be specific) that it is valued in the current market. Heck, I'd be HUGELY exstatic to sell it at the price I bought it if other properties hadn't risen to absurd price levels. With the exception of property developers..... who else overtly agreed with spiralling house prices?

I suppose you mean people "agreed" that prices should be higher because they kept on buying when they should have said " Don't be daft - no thanks"? True, but let me tell you what happened to the vast majority of those. They traded up and up whilst those like me watched incredulously how prices escalated at nauseam. And whilst my house augmented in value, the price differential to other properties became larger and larger...and larger.

Example:10 years ago my house was valued at around 150 K and one I fancied at 325 K - a difference of 175K. Now my house is valued at 270K and that other house is valued at aprox 700K. A price difference of 430K! The ones who were supremely stupid and didn't overextend themselves were those who DIDN't buy - e.g. people like me. Because this small minority assumed - erroneously, evidently - that HP wouldn't go on increasing. Which, unfortunately for us, they certainly did.

I HOPE prices will fall sharply....but is this likely to happen? The only ones sharing my interest in such would be FTB or those who haven't bought a property in the last 15 years. Everyone else, from pensioners hoping to flog their property at max profit, to those emigrating ,to all those who did buy in the last few years will do anything in their power to not let house prices fall. By simply refusing to sell if at all possible..

The next few years are going to be interesting ones in the housing market, for sure.

dopester

It was directed to Primrose.

My mother also bought 20 years ago, but never moved. She's seen the value/worth of her house increase, because new buyers have agreed to pay more for houses, on her street, in her area, year after year after year after year.

Same as your position by the sounds of it - you did nothing (perhaps a few improvements) but your house went up massively in value, due to new buyers agreeing to pay more, and having the ability to pay more, for houses in your area from sellers, year after year.

And much of that increase in recent years came from lenders who were willing to lend at much higher multiples, and on self-cert to borrowers - who were willing to buy at ever higher prices in the boom.

The same thing works in reverse, on the way down. When a seller accepts a lower price for their property, than a similar property was bought for the year before on his street lets say - it begins to drag down market value of all similar house prices in the area.

You really think your old-ladies can stubbornly refuse to lower prices and that will somehow stop the value falling?

In every area of the UK there will be someone who has to sell at market value. Be it for work reasons, loss of job, share-values crashed, death.. They will have to accept the highest price the market agrees to offer them.

Not long back we had a whiner on the forums, shocked and not happy that his next-door neighbour had reduced his house by £50K less than he had his house up at. We'll see more and more of that, leaving the old-dears in twilight-zone for the money they believe their houses are worth over a few years.

Like it or not, that will affect even the old-dears who think their homes are worth a fortune. They can't hold out for fantasy prices in this type of crash. They can't beat the market, there is a long way to go, and it is unlikely to zoom back to peak.

dopester

harrup wrote: »

Example:10 years ago my house was valued at around 150 K and one I fancied at 325 K - a difference of 175K. Now my house is valued at 270K and that other house is valued at aprox 700K. A price difference of 430K! The ones who were supremely stupid and didn't overextend themselves were those who DIDN't buy - e.g. people like me. Because this small minority assumed - erroneously, evidently - that HP wouldn't go on increasing. Which, unfortunately for us, they certainly did.

Dangerous ground you're on there imo.

Going back 10 years, you might be right, for the timing. However as time passes in the crash, you might also come to be grateful you didn't take on lots of extra debt, and see the margin on similar houses you once fancied narrow a lot.

Many people have felt the same in the last 6, 5, 4, 3 years.. and traded up, taking on significantly higher levels of debt to do so, seeing as house prices only go up - don't they.

Helped with higher multiples from lenders and self-cert. Of course, not all houses were bought and sold. Yours went up, even though you did nothing, just by buyers agreeing to pay more for properties in your area, over the years.

Mix in Buy-To-Let "professionals" all also buying in, competing with one another to pay higher prices, year after year. Massive City bonuses in the supposed "boom" feeding in to property.

Taking on extra debt to buy an expensive house can help get those amazing riches you so admire, and regret your timing with, as prices continue to rise in the boom, year after year - but leverage up in the middle, or towards the peak, and as prices crash, those same powerful forces of leverage work the opposite way.

There is a lot of unwinding to be done in my opinion, for the new reality of banks getting hit very hard, fatally in some instances and life-support for others (which is more damage than previous house price crashes in the last 60 years).

Tightening borrowing qualifications imposed on those who want a new mortgage (thus further strangling the hopes of sellers) , unemployment on the rise, and deflationary forces in play.

“House prices are a matter of opinion, whereas debt is real.”
- Mervyn King [Governor of the Bank of England]

harrup

dopester wrote: »

Dangerous ground you're on there imo.

Isn't one ALWAYS when mincing with things which one doesn't understand - in my case the great bamboozlement over the mysteries of house prices!

Many thanks for taking time in explaining convoluted matters so clearly. Greatly appreciated.

But I think you misunderstood slightly. Possibly because I explained it badly and sounded more whingey-whiney than I intended.

I only partly regret our decison not to move up. It was a conscious decision and the trade-off was most pleasant, actually. We lived mortgage free, had great yearly vacations, a comfortable life style and we never had debts or bought things on HP. THAT was the trade-off for living in a house we didn't like the (outside) look of but which served our needs. The mortgage companies would have approved exhorbitant sums of money - I was shocked when we bought our house about the sums they encouraged us to borrow. But we didn't want it. In hindsight, perhaps a mistake...but we always enjoyed the luxury of actually owning what we had.


But was I envious that ALL of our friends lived in much nicer houses after a while? Why sure, I was! I pull my hat to any woman who says she doesn't - clearly a more enlightened human being than I am. Let's be clear here - it's really not a case of wanting to "keep up with the Joneses". I wanted a nice home like theirs....I just didn't fancy being mortgaged to my eyeballs with half the time robbing Peter to pay Paul. Yes, I wanted my cake AND eat it.

Still do.

dopester

harrup wrote: »

I only partly regret our decison not to move up. It was a conscious decision and the trade-off was most pleasant, actually. We lived mortgage free, had great yearly vacations, a comfortable life style and we never had debts or bought things on HP.

Excellent. :rotfl:

Now I perfectly see what you mean.