House Price Crash Didn't Happen

cattie

As someone who may be selling up to downsize in the not too distant future, I have a rough idea of what my house is worth (living in an area that still has quite a healthy market) and been keeping my eye on property market over the past few months, so am familiar with achieved prices versus marketed price.

What I do know is that it doesn't matter to me what a potential buyer might think my house is worth, if it's too far off asking price, as if I don't get the price I need to enable me to buy exactly what I want in my next property, then my house will remain in my possession, as I am not looking to take on any further finance to enable me to buy my next property. I think you will find that this is the same for most sellers.

Also If vendors have a high mortgage, little equity & perhaps loans taken out for improvements to property, then it just won't make financial sense for them to budge below a certain price. You wouldn't want to sell a car for say £2.5k when it still had £5k finance outstanding on it & it's a bit like that with vendors & house prices.

BigAunty

You seem to think that the buying process is logical and the price can be calculated using a particular method.

You are now discovering that it's a very emotional process - maths just won't cut it.

It's the same with the stock market - all the computer algorithms in the world can't acurately predict future share price.

I'm currently about to sell my flat and buy a house. My analysis is that as there are so few family homes in the area and so many flats on the market, I will probably have to take a hit on my selling price and will probably just have to suck up and accept paying close to the asking price for a house because they have stronger demand and good ones fly off the books. There's no point in me analysing 'well they paid x for it on x date, and have done £y amount of work' so I'll offer z% under. By then, someone else will have bought it.

GAH

You are try to work out logical calculations which is all very well, but as I said, its a market, every vendor is different, hence some will be negotiable and others won't.

It is obviously a good idea to have in mind the price your willing to pay and have your costs worked out.

A home is a home at ht end of the day

dimbo61

Dont know how many 3 bedroom detached houses are on the market in the area you want but as others have already said lots of people have little equity in there homes and NEED to sell at £XXX,XXX to have a deposit for the next house.
Can you stay in a 3 bed house if you dont get the price you want ? already detached and 2 bedrooms for the kids ( 2/3).
Next step up could be over £250K and hence 3% stamp duty OUCH !!!!

trytobuy

GAH wrote: »

You are try to work out logical calculations which is all very well, but as I said, its a market, every vendor is different, hence some will be negotiable and others won't.

It is obviously a good idea to have in mind the price your willing to pay and have your costs worked out.

A home is a home at ht end of the day

Thanks for that. Ok if you were me, purely based on the info provided, what would be the top price you'd be willing to go to if you really liked the house but not so much so that you were willing to pay over the odds for it. And how would you determine that price?

the_flying_pig

actual sold prices show that Darlington was fairly hard-hit by HPC.

http://www.landreg.gov.uk/Apps/house-prices/house-price-index-custom-reports/hpi_report.asp?g=1&gt=1&a=Darlington&s=01 January 2008&e=01 December 2011&t=1

[IMG]http://www.landreg.gov.uk/Apps/house-prices/house-price-index-custom-reports/hpi_report.asp?g=1>=1&a=Darlington&s=01 January 2008&e=01 December 2011&t=1[/IMG]

but, human nature being what it is, vendors aren't going to start negotiations 15-20% below what they paid. part of the reason why hardly anything is selling. it's tedious & stressful but if you want a bargain you need to be tracking a very large number of houses and areas, look out for stuff that's been on the market for a long time [where vendors will now realise that full asking isn't going to happen], look out for price cuts, etc.

GAH

trytobuy wrote: »

Thanks for that. Ok if you were me, purely based on the info provided, what would be the top price you'd be willing to go to if you really liked the house but not so much so that you were willing to pay over the odds for it. And how would you determine that price?

Its irrelevant really what I would pay.

I purchased my last house 7 or 8 years ago, and there wasn't the welath of information out there then as there is now.

When I bought my last house, the first thing I knew was that it was the house for me, then I entered negotiations, I felt it was fairly priced, but got £20k off the asking price, I would have paid the asking price if I had to.

When you truly find the right house, you will know as you will go for it.

trytobuy

the_flying_pig wrote: »

actual sold prices show that Darlington was fairly hard-hit by HPC.

but, human nature being what it is, vendors aren't going to start negotiations 15-20% below what they paid. part of the reason why hardly anything is selling. it's tedious & stressful but if you want a bargain you need to be tracking a very large number of houses and areas, look out for stuff that's been on the market for a long time [where vendors will now realise that full asking isn't going to happen], look out for price cuts, etc.

Yeah I looked at the same thing, which is why I can't bring myself to make an offer that is anything more than the 160k already on the table. Even that offer presumes the HPC didn't actually happen and allows for them to make a small profit. I think that's more than fair, do you?

sonastin

You're doing everything you can to price it fairly. You can't force buyers to sell to you. All you can do is keep looking, keep using the tools available as you have been doing and hope to find a house owned by someone more realistic in their outlook. If these houses you've been looking at remain on the market for a while with no offers and you are still interested, put your offer back on the table. Time might be the thing they need to realise what their house is currently worth.

Are you using property bee to track the marketing history of these properties?

phoebe1989seb

Speaking as someone who bought a house (not FTB) mortgage-free in November 2007 and spent around £40k on essential renovations and sold last May for £20k less than the property cost, I have to say these sellers are being totally unrealistic. We were selling in East Anglia (Essex/Suffolk borders) and as property was just not moving in our area and we needed a quick sale to relocate closer to family we were realistic in our asking price and as such sold within two weeks of marketing.......we just faced up to having to take a hit.

Houses we looked at to buy (across six counties in the south east/west) tended to not only be more expensive (as you would expect) but the vendors seemed far less willing to price realistically and therefore sell swiftly. We looked at one house that had actually been on the market since before our previous move :eek: yet had only dropped in price by some 8% in that time (almost four years!) and when we tried to view it the agent couldn't get hold of the vendor, who it turned out was on holiday but hadn't bothered to inform the EA......suffice to say it's still on the market now