Advertised house prices

ashm1

Hi,

Are all houses over-valued in a booming market ?

I have seen numerous first time houses \ flats on the fish4homes website in my area that have been listed the site for months and months but their price has not changed. With the Bank of England in a interest rate 'raising phase' why don't the advertised prices come down?

Do people take the property off the market rather than lower the advertised price or is it expected that the actual sale price is not necessarily related to the advertised price ?



Kind regards,

Ashley.

whambamboo

maybe the estate agent already sold it but didn't withdraw it.

Fact is if you are not selling for months you will reduce the price or withdraw. It's expensive to leave a property empty.

The actual price will be typically be less than asking price, but not always if the market is buoyant

v0n

It's not uncommon for some sales to take 6 months between offer and complition, my first purchased stretched from March to September and there was no chain. Imagine delays where everyone in chain depends on the complition "below"...
Some clever estate agents use long wound chains and dragging complitions as yet another opportunity for "offers in excess" tactics. They will leave advert running in all medias - not only because it keeps the pressure on original buyer, who can still see his chosen property listed for sale everywhere but it's also good for business - people call about the property, agent can put them in database for similar properties and if a cash buyer comes along, with better offer, agent can withdraw property from the market and sell it to highest bidder for more...

Gorgeous_George

The advertised price is often a guide. The initial offer price is usually less than the final price. The final price is usually somewhere between the initial offer and the advertised price - unless a bidding situation arises, in which case, the final price can be higher than the advertised price.

Buyers should make their own minds up, balancing affordability and potential resale value (resale values can be higher or lower than purchase price).

It's all very simple.



GG

ReportInvestor

I'm about to do a survey of my own neighbourhood to get myself more clued up.

My initial findings, however, are that actual prices paid haven't risen over the last two years - even though the national surveys tell me they probably should have done .

Maybe I'm just living in a dodgy area .

Re the debate - I always assume 5% off the asking price as a rough guide (but depends on both area and general market conditions).

One of the few good pieces of advice given by that idiot Bob Beckman was that you make money when you buy a house, not when you sell it.

ashm1

Hi,

A work colleague (first time buyer) of mine made an offer at advertised price that was accepted immediately.

Will this guide price apply to properties around the £125,000 stamp duty threshold ? I see many properties positioned just below the threshold so I wonder if they have already been discounted!

Kind regards,

Ashley.

ReportInvestor

Hi Ashley,

Yes, the threshold may affect offer prices and so you need to do your local research extra carefully.

A more usual tactic of EAs, I'd have thought, would be to recomment clients ask for £135,000 ready to accept £124,999 so that the buyer thinks they've done well.

In January 2006 the national difference between asking & actual sale prices was 6.1%. Perhaps reflecting the mini-boom of late, this has narrowed to 5% last month according to Hometrack

Mouse Price's home buying guide thinks 5-10% is quite normal

ashm1

ReportInvestor wrote:

Hi Ashley,

Yes, the threshold may affect offer prices and so you need to do your local research extra carefully.

A more usual tactic of EAs, I'd have thought, would be to recomment clients ask for £135,000 ready to accept £124,999 so that the buyer thinks they've done well.

In January 2006 the national difference between asking & actual sale prices was 6.1%. Perhaps reflecting the mini-boom of late, this has narrowed to 5% last month according to Hometrack

Hi,

If interest rates go up in November can a buyer lower their offer price ?

Does this £135,000 'movement' mean that the 'return' on an a house around the stamp duty threshold will be small until the stamp duty threshold is raised ?



Kind regards,

Ashley.

ReportInvestor

A buyer can always try to lower their offer price (gazunder) if he thinks (s)he can get away with it. It's not illegal & you're not 100% committed to anything until contracts are exchanged.

But generally accepted practice suggests that it should really only be done on the basis of any defects the the survey shows need remedying. In a strong market you might even be shown the door (having waived goodbye to your survey fee ).

As for interest rates, you can't get many people who think they won't go up in November - so it's not as if it hasn't been well flagged in the news.

Re prices around the £120K mark. Given that we are "only" talking about £1.2K's tax then I wouldn't want to exaggerate any problem with a property around that level that the market thinks is worth the money.

At £250K (when Gordon's 3% rate kicks in) it's probably more of an issue since an extra £5K tax is at stake.