Property Magnate's house buying tips

Rave

Jorgan wrote:

2) Price assessment
I can’t see how the typical wage stacks up. Say the average house price in the UK is £190,000, the typical wage would have to be over £48,000, based on your calculation.

If, as somebody has said, the average wage in the UK is £23,000, don’t know if this is correct, then the average UK house price would be £88,500.

Well, the logical conclusion then is that houses are obscenely overpriced at the moment.

5) Look for Flippers
This one seems to be in direct contrast with your user name. Are you against people making a profit from the sale of property. Many buyers don’t have the time, money or the inclination to do a property up. Shows like House Doctor prove this time & time again. People see a house, don’t want to buy it because of its décor, carpets & bathroom, then after a £2k make over, they are willing to offer the asking price. If they had been prepared to do the work themselves they could have knocked the price down by maybe £3-10k and then done the house up to their taste.
Last time I checked we were in a free market economy, do you know something I don’t comrade?

The point is that a new kitchen, cheapo laminate flooring and copious quantities of magnolia paint do not add 30k to the value of a house- yet that seems to be the profit many flippers seem to think they're entitled to. Being aware of what the vendor paid allows you to quantify whether you think the asking price fairly reflects the improvements they have made- and if not you can lower your offer or walk away. Another mug might come along and pay full asking, but being a mug is what PM is trying to help people avoid.

6) Know your Seller
When I bought a property, how much I paid & how much of a mortgage I have it is my business & nobody else’s. If you don’t offer me the figure I want, you don’t buy my house, simple.

Yeah, and if nobody offers you the amount you want, you don't sell your house until you drop the price or accept a lower offer. It's a buyer's market in most areas of the country at the moment.

Knowing how much of a mortgage I have on a property will only tell you if I have negative equity on a property and even with negative equity I may still be in a position to sell.

Maybe- but you're also a bigger risk for the seller, in that they might have problems when completing etc.- I have seen several posts in this forum to that effect in fact. If there are plenty of properties on the market, it being a buyer's market and all, why take the risk of buying from someone in negative equity when you can buy from someone who hasn't MEWed up to the eyeballs?

Right, I’ve seen my dream property, its up for sale at £110k, I’ve done the research on the net, other properties have sold for between £105-115k in the area over the last 6 months so I know the price is reasonable. However, according to your figures, I have to knock 20% off the asking price, bringing it down to £88k. I know the current owners paid £85k for it 3 years ago, so at least they covered their agents & solicitors fees. I ring the agent with my offer, once they’ve stopped laughing they mention something about a running & taking a jump,

You may have enjoyed the luxury of being able to tell people offering 20% below asking to take a running jump for a good few years now- but those days will soon be over:).

So, I wait for the the general public to become more educated in the house buying process, meanwhile interest rates have gone up by 1.5% and I’ve lost the 3year fixed rate I had my eye on.

If rates were to actually rise by 1.5% there would be such a flood of forced sellers that prices would go into freefall. 1.5% extra interest on a 40% smaller mortgage is a much better deal than the one on offer now:).

Property Magnate's original post isn't IMO all that helpful, because it takes hundreds of words to put across one very simple basic point- which is that house prices are far too high, so don't buy a house unless you can get it for way under asking. He is however quite correct in this assesment.

Doozergirl

Rave wrote:

The point is that a new kitchen, cheapo laminate flooring and copious quantities of magnolia paint do not add 30k to the value of a house- yet that seems to be the profit many flippers seem to think they're entitled to. Being aware of what the vendor paid allows you to quantify whether you think the asking price fairly reflects the improvements they have made- and if not you can lower your offer or walk away. Another mug might come along and pay full asking, but being a mug is what PM is trying to help people avoid.

There's no logic in this at all. If someone's owned a property for a longer period of time and made their money from the rising market, it doesn't mean they're selling a better house than a 'flipper'


As someone who buys to sell, I don't think that many people would be half qualified to assess how much I'd spent on a property. Most people seem to think that houses consist of kitchens and bathrooms and not much else. The stuff you don't see is hard, dirty and incredibly expensive work for which people are entitled to a wage. A house can be worth £30k more than the 'flipper' paid as it's fairly evident from their sale price that nobody wanted it at a higher price at the time.

I'd urge people to look behind the pretty things to see that all of the real issues have been addressed, that certificates are obtainable and that the asking price stacks up against similar properties, but this advice stands for every house out there. Get a survey done.

Jorgan_2

Rave, as you correctly state, a property is only worth what somebody is prepared to pay for it. House prices are driven by market forces, not by Estate Agents or vendors, they only set the asking price not the sale price.

If I have done my job properly in setting the asking price of a property at the correct level, then I will have the 'luxury' of telling buyers who offer 20% below the asking price to take a running jump for a long time to come. If a house is on the market for the 'correct' price, i.e. comparable completion prices, condition & location have all been taken into account, the vendor will not have to take a drop of 20% to achieve a sale.

Ask yourself this, if you know that similar properties in your area are selling for, not asking, £200 - 210k and you put yours on for £220k , are you seriously going to accept around £175k for it?

stphnstevey

Just thought I would say that I thought most of Property Magnates intial post was worthwhile. Although I don't agree with every minute detail, I don't think it deserved the 'batterring' it appears to have got from reading the thread.

We all have our views and we should all (including me) respect others experiences. As a well known song says:

"Careful whose advice you buy, but, be patient with those who
supply it. Advice is a form of nostalgia, dispensing it is a way of
fishing the past from the disposal, wiping it off, painting over the
ugly parts and recycling it for more than
it’s worth"

I particularly liked the house price vs weekly rental. This seems to work with the majority of my rentals and is a great rule of thumb.

Markinjapan

stphnstevey wrote: »

"Careful whose advice you buy, but, be patient with those who
supply it. Advice is a form of nostalgia, dispensing it is a way of
fishing the past from the disposal, wiping it off, painting over the
ugly parts and recycling it for more than
it’s worth"

Oh, and trust me on the sunscreen!

Jonbvn

Markinjapan wrote: »

Oh, and trust me on the sunscreen!

Your waited more than a year to make this comment????