Some friends of mine desperately need to sell

Blacklight

Anecdotes... I don't usually, but this seems a true reflection of what's going on out there:

Bumped into a couple I know that I hadn't seen for a while in town. They're expecting their first child in about four months.

They have a small two up, two down and really need some more room. The house has been on the market for a few months and they keep getting offers from people that are "taking the !!!!" (around 15% lower than the asking price).

Desperate as they are they decided to take the place off the market rather than sell it cut price and let someone else get a cheap deal at their expense.

heretolearn_2

Maybe they don't have a realistic idea of the current market value. If it's priced right, it should sell.

CLAPTON

presumably they were planning to overpay by 15% on the next house they were going to buy?

Jowo_2

I must admit by being baffled by the number of posts I see on MSE where the household say their property is too small.

Today I've seen posts about a couple in a 1 bedroom flat who say they need a house, and this one about a husband and wife with 1 child who say their 2 bedroom house is too small.

They seem the right size to me, as long as they've got some control on the amount of personal belongings in the property?

Their experience of 'bargain' hunters shows that the local market is a buyers market - presumably there is high supply and low demand? Plus their property isn't priced to sell (the buyers think its overpriced). If the buyers they met were not willing to come back and renegotiate closer to the asking price, then its a sign that they had no other difficulties finding a comparable property at less price.

Some people unrealistically price their properties because they think they need £x equity from the sale to find their onward property but that's their problem, not the buyers.

DervProf

Blacklight wrote: »

Desperate as they are they decided to take the place off the market rather than sell it cut price and let someone else get a cheap deal at their expense.

It wouldn't have been a cheap deal, it would have been what the house was worth. The value of an item is only an opinion until it has actually sold.

AD9898_2

They're obviously not desperate from the story you portray. 'Desperate' to me means people who just don't have the money to pay their mortgage, not someone wants more room.

Most people can pay their mortgage at this time because IRs are so low, although 36,000 repossessions when base rate is 0.5% is still very high and proof of the ridiculous cost of housing.

julieq

It isn't high. It's low. Most people aren't on low mortgage rates, most people didn't enter the market in the past few years. So 36,000 repossessions is proof of nothing of the kind. If anything it proves that lenders have a conservative approach to risk management.

Davesnave

Depends on the area and how they read the tea leaves, but for us, selling low meant not waiting around and possibly losing rather than gaining from any upswing. If you sell in a depressed market, like this one, you can expect to buy cheaply too.

Maybe not a great strategy for those whose demands are very specific, but if your buying area hits a large enough number of properties, there will always be those who really are desperate. i.e. not your mates.

N1AK

Blacklight wrote: »

The house has been on the market for a few months and they keep getting offers from people that are "taking the !!!!" (around 15% lower than the asking price).

Desperate as they are they decided to take the place off the market rather than sell it cut price and let someone else get a cheap deal at their expense.

They obviously aren't desperate to sell then. We offered 14% off on a property which was (imo) already competitively priced, even in this market, and we settled at 9% off.

Your friends can continue living in a house that doesn't suit them, waiting for the housing market to strengthen. Any improvement in the market is likely to hurt them more than it helps (it will make it harder for them to buy below asking and increase the difference in price between their property and larger ones). Any drop in price will further decrease their equity, a large drop may make it impossible for them to sell...

michaels

Jowo wrote: »

Some people unrealistically price their properties because they think they need £x equity from the sale to find their onward property but that's their problem, not the buyers.

This is interesting.

In 'normal' times it was likely that any reduction in selling price was likely to mean a similar reduction could be requested in buying price and transaction could still proceed.

However with the current much more stringent deposit requirements a reduction of say 10% in both selling and buying prices may well mean that thee is insufficient equity for a mortgage to be achieved on the purchase. Another reason for volumes to remain low but again may not say anything about overall price levels?

Blacklight

AD9898 wrote: »

They're obviously not desperate from the story you portray. 'Desperate' to me means people who just don't have the money to pay their mortgage, not someone wants more room.

Most people can pay their mortgage at this time because IRs are so low, although 36,000 repossessions when base rate is 0.5% is still very high and proof of the ridiculous cost of housing.

Spot on. The reason you won't see anything coming on the market until prices pick up is that no-one is that desperate, despite being very desperate!

What's going to cause a forced sale? Probably being unable to pay the bill as you rightly say.

What's going to cause this? IR's going up twice by 0.25%? That's not going to make a blind bit of difference to anyone - either you used to pay ~8% years ago or you've borrowed in the last 2-3 years and haven't been allowed to stretch yourself.

What about job losses? Well there's a lot of news about redundancy but most of these are people close to retirement, having a baby or emigrating etc. Very little forced job losses.

Not really much cause of true desperation is there.