Overpricing

Mrs_Optimist

Just thought I would vent my dismay on this thread and guage other peoples reactions. Is it my imagination or is everything overpriced? We looked at a derelict house last week that you literally could not move into - £165K. Was bought (according to land registry) in August for £148k. Vendor has done nothing with it - £17k in a few months?

Looked at a lovely house today but still at least £30k overpriced, needs new central heating, double galzed windows, roof etc. Could be a lovely home but we simply cannot afford to pay that sort of money and then shell out a further £30k on top. However houses are going at those sort of prices. What is it like in your area.

How can these houses go at these prices? Why are people paying these sort of prices?

mr.broderick

just rent with mean machine for the time being til they crash.....?

Mrs_Optimist

Sorry, didn't explain myself, already on housing ladder - don't want a second house and so fuel the shortage of housing and push prices up for everyone else!

Is it too much to ask for a bigger home at a fair price? Whilst people are prepared to pay £20-£30k more than a house is worth we have no hope of ever moving!!! I can't believe some of the prices, the mindset seems to be put it on at a premium regardless of the state it is in or the work that needs doing and someone with more money than sense will buy it. We have seen some real sights, very very dirty houses (how do people live like it) and still they want a fortune!

Tustastic

Like anything else, property is worth what people will pay for it. During booms, you can't move for people boasting about how much their home has gone up in value. When the market goes down, those people go very quiet.:) If you find a place you like, bargain about the price. If yours is the best offer, the vendors will pay attention. I suspect that you are also finding a big gap between the information you receive from the EA and what you find when you go to view. Now that IS an infuriating waste of your time.

Mrs_Optimist

Know what you mean. The infuriating thing is people ARE paying well over the odds for some of the houses we have seen, and I can't understand why. We purchased our current home 10 years ago and chose wisely, it is a home not an investment tool. We have made money on it but that is no good to us unless we want to live in a cardboard box, it is tied up in bricks and mortar. Now we want to trade up to a larger house (not huge, just larger) the prices some of the proprties are on for are totally unrealistic, and we have told the EA this. However they are still being purchased and I can't understand for the life of me, why. I guess the problem is the EA give unrealistic valuations and the vendor sticks with that and holds out for full asking price. The house we saw tonight was lovely and would make a great family home but needs at least £30k worth of work on it which is not price reflective.

We had the same problem when our home was alued - £15k difference between lowest and highest valuation. We knew what a fair price would be and marketed it accordingly - middle of the road. I am just amazed that houses that are so blatantly overprced as snapped up so quickly. Am I missing a money tree somewhere that other people know about??!!!

Doozergirl

Anything that needs a modicum of work fetches a premium because people don't bother doing proper research into the resale values of property and immediately assume that because it needs work, it's cheap. The fact that house prices 'always go up' seems to make people believe that it actually doesn't matter what they pay for it. Loads of these people get caught out, I see it ALL the time. They can't sell the house at their even more inflated price, so they end up renting it out. It's okay though, because then they have a 'portfolio' :rollleyes:

There is absolutely no point in putting in offers on houses unless they need serious work (ie. cash only) because it would, IME, cost less in time to buy an immaculate house and sell that straight on at a loss instead.

nrsql

>> Is it my imagination or is everything overpriced?
>> However houses are going at those sort of prices.

I think you have answered your own question.
Property sells at the price people are willing to pay.
If something sells it's not overpriced.

If you're not willing to pay these prices then wait and see if the market falls. Remember you will get less for your house if that happens.

courtjester

nrsql wrote:

If you're not willing to pay these prices then wait and see if the market falls. Remember you will get less for your house if that happens.

But the differential will be smaller when trading up and so better to wait for the fall ...

Expectation and greed are factors here - the media bombard everybody with information about how house prices are always going up at a rate of knots (despite the data being at least 3-4 months old and no longer relevant to *now*) - and of course, the media get their information from organisations with vested interests in talking the market up, estate agents and mortgage lenders :cool:

People want to believe that their home is worth more - so when somebody tells them the market in the area is falling, nothing is selling, they consider their home to be the exception and move on until they find someone (normally a desperate agent) who will tell them what they want to hear to get the business ...

It's the same with how quickly homes sell (they don't generally), but everybody's busy checking the 'average' statistics to see how many weeks and how many viewings it takes to get an offer and if their home goes over the precise 11.23 ratio they have seen in some pointless national report, they start to complain something is wrong because no-one has bought their (over-priced) property...

sm9ai

Mrs_Optimist wrote:

How can these houses go at these prices? Why are people paying these sort of prices?

You have to remember 50% of the population have below average intelligence.

Take the Nintendo Wii for example. Its currently going on eBay for stupid money. Yet on the 16th December a the second batch gets delivered and a number of shops will have some for general sale. They will go quick but get their early and you should be okay.

BobProperty

sm9ai wrote:

You have to remember 50% of the population have below average intelligence.

Have you got statistics to back that up? :rotfl:

Hereward

courtjester wrote:

But the differential will be smaller when trading up and so better to wait for the fall ...

This only applies if the market falls uniformly: this is unlikely to happen. It is equally likely that the price differential will increase, as your current property may be less desirable than the one you are hoping to purchase.