Sellers urged to lower expectations as market stalls

geneer

http://business.scotsman.com/mortgageandpropertynews/Sellers-urged-to-lower-expectations.6799893.jp

Sensible advice from the VIs there. Seems they require turnover to exist. Who would have thunk it.

Sellers urged to lower expectations as market stalls

<H2></H2>



<H1>
[URL="javascript: ViewGallery();"][/URL]



Published Date: 12 July 2011




By Jeff Salway
Personal Finance Editor

Sellers are coming under growing pressure to lower asking prices after buyers deserted the Scottish housing market last month.
Home sales in Scotland slumped in June as the summer lull started earlier than usual, according to the latest monthly survey by the Royal Institution of Chartered Surveyors (Rics) Scotland, out today.

With sellers still putting homes on the market
even while buyer numbers fall, surveyors say prices are falling - and are likely to continue doing so.

The downbeat report contrasts with new Council of Mortgage Lenders (CML) figures showing an improvement in lending in May.

There were fewer inquiries from buyers than in any other month this year, according to surveyors, with the summer slowdown starting early. Sales levels also fell in a month that is traditionally among the busiest, the survey found.

But while buyers stayed away as confidence continued to drain from the market and the wider economy, sellers continued to put their homes on the market. And with buyers increasingly outnumbered by sellers, homeowners are coming under pressure to revise their price expectations.

Grant Robertson, of Allied Surveyors in Glasgow, said agents were already encouraging sellers to lower their prices as the market slowed down.

"This reflects last year's model, when activity in the first two quarters failed to carry into the second half of the year," he said. "The process has, however, started earlier than before and a further reduction in values seems inevitable now."

One in four homeowners is making home improvements before taking out a home report in an attempt to boost their chances of selling, surveyors reported, with homes in good condition selling more easily than those needing work. Yet surveyors said the only buyers being considered seriously were those who had sold their own home or had arranged a mortgage.

A quarter of Scottish surveyors reported a fall in house prices last month, with 71 per cent saying they stayed the same and just 4 per cent seeing an increase. The decline in Scotland mirrors the situation across the UK, with only London bucking the trend.

Graeme Hartley, director of Rics Scotland, said: "The traditional 'summer holiday' for the housing market came early for Scotland, with fewer buyers around and less sales.

"But because property is still coming on the market, buyers are in a good position to negotiate. With continued uncertainty over the jobs market and the economy, this subdued picture is set to continue."

The market slowdown in recent months is also reflected in lending figures published by the CML yesterday. Lenders advanced 41,500 house purchase mortgages last month, up by just 700 from April, when activity in the housing market was disrupted by successive Bank Holiday weekends.

It was the second-lowest May figure since the CML began collecting the data nine years ago, and down from the 43,800 loans given last May




</H1>

Conrad

One of the greatest urban myths is that EA'S like high prices and tend to ramp up prices.

In my long exerience nothing could be further from the truth.

1) If you were an EA on a 1.5% commision would you rather a house sat around on your books taking up valuable resources (advertising, staff time) so that you might sell it for £10,000 more, meaning an extra £150 commision (£60 after Tax and costs), or would you rather sell within 2 weeks at the correct price and make your usual couple of grand, done and dusted?

2) In every EA I've ever been in, the morning meeting is all about how to get todays diary of valuations to be as realistic as possible such that any property comming to market sell asap. They never sit there saying we must over value this one so it sit's in our draws for 3 months.

3) All agents I know do something called vendor checking. This is a regular call to vendors who's properties are not attracting viewers / buyers. The aim if possible is to get a price reduction.

4) Some vendors give off a vibe which translates clearly to 'my house is the best in the road and don't think I'll be giving it away'. Any Human faced with this posturing and vibe has a tendancy to want to tell the vendor what they want to hear - just as teachers conceal what they really think about your damned brats.

So when I see them cast as VI's, the assumption they want rising / high prices is utter bollogs.

I've lost count of the times I hear them say 'on no, not Mr Khan / Rodgers, he's a time vampire - always wants a high price, totaly unrealistic, don't waste too much time with him, he's a cost magnet'.

ILW

I do remember Foxtons soem time ago telling potential clients that they would get a higher price than any other agent.

StevieJ

It seems to me that house prices are holding their own and new build flat prices are taking a tonking. If you key in two bedroom on Rightmove where I live you just seem to retrieve flat after flat, in fact those seem to be the only properties that have been built. To be honest the flats are in quite nice locations but they seem to have a homogeneous feel to them, I wouldn't like to try and sell one, or rent one out for that matter.

Conrad

ILW wrote: »

I do remember Foxtons soem time ago telling potential clients that they would get a higher price than any other agent.

Yes I've heard agents say this, but this is taken out of context. What they say (to a willing and greedy audience - sellers -, although no one ever owns up to being one of them - just like no one on a forum admits they drive too close on the motorway despite my own eyes telling me 75%+ do), is that by a greater exposure through having more offices, common sense dictates highest price is achieved.

This is quite different from setting out to deliberately and knowingly over value. I've not met an EA who does this as it costs them money and makes a sale unlikely, plus degrades thier long term profile locally.


Prices are driven by greed, the greed of us sellers. None of us own up to this but many of us have a bias to anything that reflects our taste and attributes. So people will often over estimate the talents of a singer freind / thier child. They will tend to think thier holiday choices are better than yours.

They will also tend to have a dwelling bias to the place they call home and this is reflected in thier sense of valuation.

You would not believe the number of people who tell me thier house is the best in the road / better than the one that sold next door - you can set your watch by it.

peakoil_2

I drive too close on a motorway if someone is hogging either of the outside lanes and making no attempt to overtake.

Conrad

StevieJ wrote: »

It seems to me that house prices are holding their own and new build flat prices are taking a tonking. If you key in two bedroom on Rightmove where I live you just seem to retrieve flat after flat, in fact those seem to be the only properties that have been built. To be honest the flats are in quite nice locations but they seem to have a homogeneous feel to them, I wouldn't like to try and sell one, or rent one out for that matter.

Yes, there is a particular issue with flats. I was talking to the reps on a site recently as I had a client wanting two. They told me not to use certain lenders such as Nationwide as they down value and then they kept saying 'and we never re - negotiate':eek:

Imagine the arrogance of the the owner of that developer (Telford Homes) who thinks he's immune to a market place. Waanksplash.

Conrad

peakoil wrote: »

I drive too close on a motorway if someone is hogging either of the outside lanes and making no attempt to overtake.

Me too, but I'm not talking about this. I'm talking about the MAJORITY of people driving too close. I see car after car in a long line, nose to tail doing 85mph. I used to drive like that until I grew up.

I attended a defensive driving course and the ex road coppers running it said the first thing people say at the scene of any accident is 'suddenly'.

They told us you would get seasoned experienced drivers shaking like a leaf using that word first.

To me it's a form of ignorance in that they haven't taken the time to imagine the process of how an accident occurs.

They feel safe as 'they are in control', but what if the lorry tyre blows out and swerves into thier lane? Those nose to tail drivers have a much lower time in which to react, and the best driver in the world can end up tanking.

The most annoying thing I see on the motorway is grumpy old men who pull into a motorway at a speed lower than that of the prevailing traffic, causing everyone to brake. Utterly mindless idiots, oblivious to the world. All they need do is match the prevailing speed and use the zip effect - each car slots in without any disturbance to any others.

Sorry for the off topic.

Sibley

I can't see what all the fuss is about.
If you own a house now and are paying low interest rates why would you want to sell cheap?

If you saw a headline house prices down 20%. Do you really think people would think ' Oh I'll sell my house now?'

Everyone knows they would go up again. That's why people like Geneer and the HPC gang want to buy one. Then they would pray for HPI and not give a stuff about anyone priced out. The same as I don't.

I totally understand how people feel bitter. Trust me. If you had paid 50k for a house that's worth 200k now you would be happy.

I thought Geneer lived in NI anyway???

There has been a crash there. If he/she is not buying now it proves beyond all doubt they are either a bingo caller or on the chat.

abaxas

Sibley wrote: »

I can't see what all the fuss is about.
If you own a house now and are paying low interest rates why would you want to sell cheap?
.

Maybe becasue that is market value.

The value of a property is what it sells for, the rest is just ego.

geneer

Conrad wrote: »

One of the greatest urban myths is that EA'S like high prices and tend to ramp up prices.
.

Tosh. They are only to happy to ramp prices when volumes are high and times are good.

This simply isn't one of those times.