It's obviously overpriced

mudshark

I think some people often miss a rather important point - a house isn't just worth what a buyer is willing to pay for it, it is also worth what the owner thinks it's worth to them. So if my house can only find a buyer at £150k but I'm not willing to sell for less than £200k I must accept that I can't sell it; hopefully my reasoning is sensible and maybe based on a feature I place high value on - maybe the garden is unusually big for the size of property which is great as I maybe I love croquet and I don't care that it doesn't have a garage. When I look at where I want to move to I see that to find something with a garden that suits I have to pay too much of a premium over what I can sell my house for - the fact that they all have garages doesn't make any difference to me.

Obviously if I have to sell then I have little choice but to accept what someone else thinks it's worth but that's a different issue.

sonastin

bullau wrote: »

This does not confirm any value though or prove that the vendor is right and the place is worth more. What it shows is a vendor that does not really want to sell, atleast not for what anyone is willing to pay. The place is overpriced if no one is willing to pay.

It confirms the value to the owner. It is worth more to the owner. The vendor is willing to sell for the price he would have been willing to pay if he wasn't already owning it. "Value" and "worth" and "market price" aren't absolutes. They are dependent on individuals and the opinion of every individual involved in the market. If the owner is the one who places the highest value on the property then he is the one who gets to keep the property. If the owner MUST sell, then his need to sell makes it worth less to him...

Doozergirl

olias wrote: »

I'm quite impressed. Don't think one of my threads has had this many posts so quickly before!:T

A better worded post IMO than your OP. I agree with you wholeheartedly about those people that don't even think before they trot out with 'drop the price'. Oh, how we must must bow to he The King of the Handsome Heroes; he, the pontif of one-liners; the one who has nothing else to say but would insist (if he could get past one line) that it is superior knowledge.

But then a lot of houses posted on here have been on the market for a long time. And EAs will say things to placate you because if they can't have your business they're not giving it to anyone else. And a lot of the houses, when you look at the street and what has sold, what is available in the town, what is under offer, they are really overpriced

Every house has it's price. I do believe that you can make the most of it though but I'm bored of suggesting hanging baskets and decluttering when I know it needs a price drop, a new kitchen and a good clean. I know what makes a house attractive to buyers because I hope I can look at a house through a buyer's eyes. If your house looks average then for a simple fact, you have a lot of competition. So when there is one buyer for 20 properties, it's incredibly important to treat it like a business and get it sold. You can't please everyone, but I'd rather please those that are pleaseable with nice things than rely on people to see the potential.

It may not always be price but the things it takes to sell can feel quite extreme. The longest we ever took to go under offer was four months and I don't ever plan to exceed that. We went to market the week of the run on Northern Rock.

I can promise though that if you are flexible, even if you do sell yours for lower, if you are moving up the ladder, you will find something else whilst not proportionately cheaper, it will be in the actual cost of changing.

the_flying_pig

HAMISH_MCTAVISH wrote: »

Assets and consumable goods are entirely different things.

Houses do not become obsolete and lose all their value in a matter of a year or so from their release date, laptops do.....

The value of a house is defined as being the price a willing buyer and a willing seller can agree to in an open and free market.

It is NOT defined as being the amount it can receive in a distressed sale, cash auction today, etc.

If the seller does not agree to the price, there is no sale.

And most sellers have the luxury of time on their side, because we have an endemic housing shortage and soaring rents at the moment due to mortgage restrictions. If the worst comes to the worst and they really have to move, they can just rent it out instead and wait for prices to recover.

Whereas most potential buyers know full well that renting over the long term is a mugs game, and the pressure to buy before prices inevitably rise is increasing with every month..... Another month, another landlords mortgage payment made for him. Another month, another landlords mortgage payment made for him. Another month, another landlords mortgage payment made for him.

Tick tock, tick tock, tick tock........

I'm not sure that little kidney stone of wisdom is really very helpful to someone trying to sell a house, H. Or, well, to anyone, ever, really, hoping to be [ahem] informed, educated, or entertained. Cod philosophical debates about what something is 'worth' should probably be avoided at the best of times, but letting someone as foolish and biased as your good self loose on one is, well, not a good thing.

Back to the OP's question, "thinly traded market" [e.g. something quite rural, or something huge that needs a multimillionaire buyer] sounds to me like a pretty convincing argument as to why a house might take a long time to sell without being overpriced, absolutely.

A would-be seller who's had something up for sale for months with no result should ask himself a few basic questions about the house he is trying to sell. None of the following questions can be definitive on its own, but the more yes's one has the more likely it is that the house is overpriced.

(1) Is your asking price high relative to recent sold prices for similar stuff nearby?
(2) Is your asking price high relative to current asking prices for similar stuff nearby?
(3) Is your house a fairly common one of a generic type that seems to be getting bought and sold fairly often in your area despite the fact that yours remains unsold?
(4) Did you go with an estate agent's valuation that was by a distance the highest of the ones that you received?
(5) etc.

Mostly yes's and it's almost certainly overpriced. A mix of yes's and no's and it might well not be.

olias

bullau wrote: »

houses cost a fraction to build of what they are marketed at. Look at your building insurance and check the cost of a rebuild, you may well be surprised.

The cost of rebuild does not include the value of the land - that can be considerable per house, particularly in small developments. Also, older period properties may well cost more to rebuild than they are actually worth!

Also your first sentence may well be true in pricier areas, not neccessarily in cheaper areas. In my town for example a developer has recently built a block of 4 flats. That he is marketing at £99K. Now knowing the local market, I would doubt he got the land for less than £100K and probably spent £200K-£250Kto build the block. This leaves him with a potential business profit of as little as £50K for a years work (which he may not realise for another year while he sells them - time when he is still paying his finance costs).

how many similar places have sold and what for? how long will you leave that price if others continue to fall?

Similar properties (of which there are few to compare with) have sold for similar prices to mine, and almost all have taken a long time to sell (average seems to be anything from 6-18 months in my area.

Thanks.

Olias

Wobblydeb

Economics 101......

The price (or value) of something is found where supply meets demand. i.e. The price at which a vendor is willing and able to sell, and the buyer is willing and able to buy.

I remember that phrase from one of my first every economics lessons .... willing and able...

Go along to an auction for an eye-opener and watch the value of a house decided in front of you. I remember one property with zero interest (knackered burnt out place in an awful area) until the auctioneer announced it had no reserve and said he would start bidding at the price of a bike - £500. It eventually reached £7,500 and sold.

As long as the seller is willing and able to sell at any price, eventually a buyer will be found.

olias

the_flying_pig wrote: »

I'm not sure that little kidney stone of wisdom is really very helpful to someone trying to sell a house, H. Or, well, to anyone, ever, really, hoping to be [ahem] informed, educated, or entertained. Cod philosophical debates about what something is 'worth' should probably be avoided at the best of times, but letting someone as foolish and biased as your good self loose on one is, well, not a good thing.

Back to the OP's question, "thinly traded market" [e.g. something quite rural, or something huge that needs a multimillionaire buyer]

Never heard this term before, but It appears to exactly sum up the situation with my small town.

sounds to me like a pretty convincing argument as to why a house might take a long time to sell without being overpriced, absolutely.

A would-be seller who's had something up for sale for months with no result should ask himself a few basic questions about the house he is trying to sell. None of the following questions can be definitive on its own, but the more yes's one has the more likely it is that the house is overpriced.

(1) Is your asking price high relative to recent sold prices for similar stuff nearby?
(2) Is your asking price high relative to current asking prices for similar stuff nearby?
(3) Is your house a fairly common one of a generic type that seems to be getting bought and sold fairly often in your area despite the fact that yours remains unsold?
(4) Did you go with an estate agent's valuation that was by a distance the highest of the ones that you received?
(5) etc.

Mostly yes's and it's almost certainly overpriced. A mix of yes's and no's and it might well not be.

No to all of the above

Thanks.

Olias

Doozergirl

Wobblydeb wrote: »

Economics 101......

The price (or value) of something is found where supply meets demand. i.e. The price at which a vendor is willing and able to sell, and the buyer is willing and able to buy.

I remember that phrase from one of my first every economics lessons .... willing and able...

Go along to an auction for an eye-opener and watch the value of a house decided in front of you. I remember one property with zero interest (knackered burnt out place in an awful area) until the auctioneer announced it had no reserve and said he would start bidding at the price of a bike - £500. It eventually reached £7,500 and sold.

As long as the seller is willing and able to sell at any price, eventually a buyer will be found.

Why is everyone so vehemntly contesting on this board? (the wrong board)

I was at auction yesterday. I was there with a lot of other people who didn't want to pay a lot for a house and I did see some really good prices.

But going to an auction is not looking at the market place. It does not reflect the market place. It is now again a place for people with cash or people with a really good history with the bank manager. I was sat there yesterday playing an iphone app whilst most people talked over the acutioneer and the guy in front of me was so comfortable in his environment that he was waving his hands during his conversation mid-auction whilst I am still afraid to scratch my head! It's taken me years of practice to get to the point where I don't need to wee six times immediately before my lot.

That is not the market place. The lot I was after had subsidence. Auction Lots are Auction Lots for a reason and they reflect the market for people with money who want to make money on problem properties. If you get a decent repo in auction at the moment, you are very lucky. Everything has it's issues.

Auction is no place for a mortgageable home. If you put 100 FTBs in a room with a perfectly mortgageable 2 bed terrace it would fetch a darn sight more than £7,500. A burnt out house in a genuinely cheap area will cost more to rebuild than it is eventually worth. There aren't many areas like that; and it's wrong that a house is worth less than the cost to build - what a terrible blight on an area, that it is such a bad place to live that it's not even worth it's genuine value.

neverdespairgirl

MadnessOfHPC wrote: »

Dream on, IR's aren't going anywhere.

In the short-term, probably not.

In the medium to long term, they are going up. the only way is up!

HAMISH_MCTAVISH

bullau wrote: »

houses cost a fraction to build of what they are marketed at. Look at your building insurance and check the cost of a rebuild, you may well be surprised.

Gosh, you're just full of fallacies today.....

My building insurance rebuild quote on both my houses is £100k+ more than the sale value.

Because those houses are over 100 years old, built from solid granite blocks, hardwood floors, hand carved cornices, etc etc etc.

There is no shortage of property, that is a complete myth. There is no shortage of property for ftb's either....just they dont want flats or cant afford other.

There is currently a shortage of over one million houses in the UK.

And that shortage is worsening by 150,000 houses a year.

That 1 person who comes to view this month, if your house was cheaper would he buy it? What about the 1 next month? after that? how long will you leave the price and continue getting 1 viewing a month? how many similar places have sold and what for? how long will you leave that price if others continue to fall?

I can almost see your point.... IF the house is some identikit rabbit hutch with a dozen other identical houses for sale in some mass produced bland Barrett housing estate outside of Milton Keynes.

But a very large percentage of UK housing is nothing like that at all.

Houses that are 100, 200, 300 years old will all be very different. Unique in many cases. And you simply cannot assume that price is the defining factor in sales of those houses.

In my area, there have only been three houses similar to my current house come on the market since mid 2007. The latest one sold immediately, the first one sold after 5 months, the one in the middle sold after 11 months. All sold for very similar prices, and all sold for more than I bought mine for in 2007.

Price was clearly not the deciding factor in those sales, as none were ever reduced.