House Price Website and my Purchase

dfarry

Hi all...

I am selling up and relocating to Uckfield in East Sussex... with so much uncertainty it seems in the house market I'd be tempted to wait but we are already under offer in our home (and for the asking price). Also the move is associated to a relocation package through my work, and I want to get settled somewhere new before the kids get much older (they are 7 and 5).

Now that we are under offer our searching has really kicked off... but the prices in Uckfield and surrounding area's are in my opinion very inflated, clearly other buyers know that too... because properties in the area just don't seem to be selling.

The agents have themselves even said things are quiet down there... now that make me thinks.... great I can bag a bargain (to an extent) and off I go to consult the many house price webites... in my eye's it seems like people selling in the area are really going for top prices and in most cases they have no chance of acheiving their expectations. Some of the houses we saw yesterday had been on the market for months, one even over a year. There was nothing wrong with them but they were just too damn expensive!

Yesterday we saw a very nice property for £325K (not perfect, but would suite our family). Interestingly this is a house that was bought in July 2005 for £290K (the owner has to find a new job so relocation is on the cards for them)... I personally think the owners are being a tad optimistic (they have done some limited decorative work) but I am preparing to offer £305K tomorrow, does this seem reasonable? It's not my problem that they need to relocate so soon after buying and frankly I think £15K appreciatation in 10 months is pretty good going (it will pay for some of their initial fee's anyway).....what's the betting they decline my offer? To be honest I would... it has only just come onto the market and there's always some fool out there that will pay too much.

Perhaps I am paying too much attention to the house price websites... but I am not going to pay over the odds for something that I think is worth much less than the market rate...I'll probably still be searching at Christmas (unless my own buyer doesn't lose interest first) :rolleyes:

I'm starting to feel the pressure now because with the searching we are becoming more fussy and yet I feel will need to come to a decision and find a property soon.

lynzpower

A house is only worth what someone is willing to pay for it. Offer it. Whats there to lose?

You might do better with some that have been on the market longer though.

Property_Magnate

Asking Price= 325K
Offering = 305k
Sold at the peak of the market for 290k.

Surely it is obvious that you are offering far too much?

You are reading this website so you have an advantage over the average muppet buyer - so why pay bubble prices in a stagnant market?

If you are not embarrassed by your first offer it is too high.

dfarry

Thanks for the comments...

I am not embarrassed by the offer... I genuinely think that to be a reasonable offer to the sellers... there are some other properties (generally with single garages) listed at around £290 - £310 and likewise I think they are over priced......and they must be because they have been on the market for weeks and months.

This property has only just come on the market... the agent called me as soon as they were instructed on it. It is nice my only fault would be it has wooden frame double glazing so that needs maintainence (not a problem just a hassle and would cost £10-15K to replace).

So apart from...
- the house was purchased last year during a boom period.
- the market seems stagnant, proven by the slow rate of sales in the area (alot of for sale signs showing, and the same old properties are still on Rightmove)
- I am under offer and keen to move as soon as possible.
Is there any other arm twisting I can do?

My only other reservation about this place was that the vendors whilst looking for a new job seemed very laidback about when they planned to move. With this in mind they might not be so keen to take an early (but then the market might drop). Or they may accept my offer for it then to be gazumped two months down the line (that would be the worse thing to happen to us - especially as I am trying to time things to the kids school terms).

dfarry

Just to add... a few weeks ago the very first house we viewed in the area was very similar (a bit better actually as it already had uPVC glazing and a nicer drive, although the garden isn't so nice).

I liked that one right away, my missus wasn't sure and we had only just contemplated a relocation (so lots of issues were to be discussed). We didn't even have our house on the market, but I thought I would be cheeky and offered £305K pending th sale of ours. The agent (the same agent as this latest one) made the offer but unsurprisingly the response was "Come back when you have sold yours and we can talk"... about two weeks later it was under offer to someone else (all the agent would tell me was that it was a very good offer, near the asking price).

....so consequently I am a little bit concerned we might find the place of our dreams just to be pipped by someone else offering a few K more (but I won't pay a penny more than I think something is worth).

sturgeon62

Uckfield is a very expensive area, due to its location, pretty green belt but easy commute to London and almost same travel time to Brighton. It's overpriced and people know it, you get far more for your money in Kent. Although the South East is high in general compared to many other areas.

brasso

Why not rent for a few months at least, and wait to see what happen s to the property market?

Prices seem to have levelled out and even dropping slightly here and there as sellers become more realistic. The ones holding out are probably those who are trying to avoid selling at a loss. I'm sure that people who have owned for some time, and therefore have plenty of equity in the property wil be willing to do a deal, particularly if they can buy their next place at a similarly reduced price.

I'd be very reluctant to pay the asking price anywhere at the moment. You need to keep your nerve. No one knows whether prices will remain stable or drift downwards in the coming months but we can be pretty confident that they won't rise significantly, so I think you can afford to be patient.

dfarry

Yes Uckfield is expensive...as are other local towns.... we have also been looking in Burgess Hill, Heathfield, Crowborough.

Uckfield has lots of schools and is a reasonable sized town (we currently live in London) and do still want some of the convenience that towns bring. Also I work in Crawley so I need to be within relative easy reach of there (otherwise I can't really justify the relocation package I am being offered).

If we didn't have kids then renting would be a good idea I think, but with one move there is alot of upheaval especially for the kids so I wouldn't want to do that twice in such a short time.

Basically though we just like that bit of Sussex and see it as an area we would want to stay in for the foreseable future.

dfarry

Just to add Brasso... your last paragraph is almost ideal to quote to the agent tomorrow

Property_Magnate

dfarry,

You are thinking intelligently about the market. I like that. You need to be more hard nosed ... it is the financial future of your family that we are talking about.

You are negotiating from a position of strength ... as a buyer you have all the power. Do not believe any spin the Estate Agent gives you.

Try these negotiating points with the Agents (taken from my Buying Advice post in the sticky):

1. Your Budget

You have heard over the past few days that interest rates are on the rise. They are at all time lows now. You are concerned about meeting future payments so you are reducing your offer.

2. Price Assessment

You are aware that rental yields are poor in the area. Similar houses only rent for the equivalent of £XXX per week which would value the property at £XXX,XXX. ( add three zeros to achieved weekly rents.)

3. Price Trend

The local council for Uckfield is Wealden. According to the Land Registry the price of detached houses as fallen by 8.8% over the year (see the BBC website). The property market is cyclical. After the property boom over the past 10 years we are entering the down trend and you don't want to end up in negative equity.

You have heard the Home Information Packs are coming in next year. The flood of properties on the market before their introduction will further depress prices.

4. Marginal sales.

The volume of sales in East Sussex has been on a downward trend over the past 18 months. You are aware that only the best properties are selling ... these marginal sales skew the market. Just because one house on the street has sold for a ridiculous amount that does not mean the price is achievable for all the houses. The true story in any market is in the volumes.


5. Know your seller

Over to you for this ... Find their weakeness

6. The Offer

The asking price is just a figure made up by the Estate Agent and Seller based on what they think the current market will take. The market relies on “Normalisation of the Abnormal”. In other words, buyers will accept a selling price today that five years ago would have been ridiculous. Naïve buyers will use phrases such as “That’s a good price!” when a few years ago it would have been a silly price.


If you are not embarrassed by your first offer it is too high. Some say that your first offer should be 10% below the asking price with a view to achieve 5 to 7% below as a sale price. Rubbish!!! Use the price assessment techniques to determine the true value. Then, offer 20% less than this! Yes… really! If it is refused ask the agent if you can view other properties and do so. When they come back to you looking for an increase then you can start negotiating. There are still plenty of naïve people paying prices they can’t afford for overvalued property. Therefore, expect to lose properties to these over-enthusiastic buyers. Don’t worry though. As people become more aware of the price bubble and the future direction of interests rates education will improve and so will your success as a buyer.

dfarry

Great response PM... much appreciated... and some extra ammo... for negotiating offers....

On the basis of your points I am going to go in with an embarrasing offer of £295K.... I am almost certain it will be declined but you never know. If some other numpty comes along in the meantime to offer more then so be it.... the HIPs point is particularly good because I can really see that hitting the market hard....

Luckily for us, though we are mortgaged we do have over 75% equity (we bought our current home in 1994). Though we'd still need to treble our mortgage to buy the Uckfield home, we should be clear of the possibility of negative equity even in a total collapse of property prices. Plus whilst you can't be sure what the future holds I do see this place as being our home for many years (so as long as we can meet the payments we should be able to see the next boom).