realistic selling price?

geoffky

Four in ten agents say one-third of their homes are over-priced



MORE LIKE 70% ,BUT IT IS A START
http://www.estateagenttoday.co.uk/news_features/Four-in-ten-agents-say-one-third-of-their-homes-is-over-priced

HAMISH_MCTAVISH

geoffky wrote: »

Four in ten agents say one-third of their homes are over-priced]

Lovely sound bite Geoffky, but it doesn't change the facts as discussed in the thread.

townendwig

HAMISH_MCTAVISH wrote: »

Indeed.

The true value of a house is determined by the price that both a willing/proceedable buyer and a willing/proceedable seller can agree to.

Not quite, as a seller can not be determined as willing/proceedable if they slap a £1m price tag on a two bed terrace in hartlepool.

HAMISH_MCTAVISH wrote: »

I could run around offering a tenner for every house that hasn't had an offer yet, but that doesn't make £10 the value of those houses.

It does, actually, in the absence of a higher offer. Obviously at a tenner, a higher offer would be found by asking the first person you came across so not a great example:p, but at some point no one makes a higher offer.
That is when you find the true value of the house.

Even at ten pounds, the buyer is willing and proceedable. But the point that you're missing is there is one seller and many potential buyers to determine the price. aka the market!

HAMISH_MCTAVISH wrote: »

Without a vendor wiling to sell it to me at that price, there is no sale, and hence no price discovery.

It's not just buyers that set market prices....

Without willing vendors the market price must inevitably rise until someone is tempted to actually sell.

Only then is there price discovery...

This is where you are wrong. By putting the house up for sale, the vendor has accepted they will need to find a buyer. They are putting the house out to the market to decide fair price. A buyer will always exist at the right price. that is what makes a market.


This is the point most people still cannot get their heads around. If you put your house up for sale at auction with no reserve. The market will determine the price of that house. It doesn't matter what you 'think' it should fetch because the market will prove you right or wrong.

Of course you could hold out for your perfect figure (your side of the price discovery process) and put a reserve in, and that reserve is never met. The market has proven you wrong, just as the market will prove a ten pound offer to be wrong.

In this instance it is clear that the market is below where the vendor is. Price discovery will not happen until the price comes down to market.


thanks for the link to the acadametrics stuff by the way :cool: interesting read!
cheers
Wig

Squish_21

its really hard to say what is an acceptable offer.

From currently being a seller myself I can safely say everyone wants an absolute bargain and start the negotiations very low. they may be trying their luck or they may be very willing to negotiate further.

At the end of the day it depends how quick you want/need to sell and your personal circumstances. A lot of the offers i received wouldnt have even paid off the mortgage, with your parents this may not be the case.

HAMISH_MCTAVISH

townendwig wrote: »

This is where you are wrong.

Fairly sure I'm not.

By putting the house up for sale, the vendor has accepted they will need to find a buyer.

Not quite.

The vendor has determined they would like to find a buyer, if one can be found that is willing to pay a price the vendor will accept.

They are putting the house out to the market to decide fair price. A buyer will always exist at the right price. that is what makes a market.

Again, I disagree.

Vendors don't, as a rule, take their houses to auctions with no reserve.

They set a target price that is acceptable to them, ie, a price they are willing and able to sell at, and if it cannot be obtained they withdraw from the sale process.

The result of sufficient numbers of vendors withdrawing from the market is that supply falls, and prices rise. As we saw clearly in from late 2008 until late 2009, when falling prices caused the number of houses listed on Rightmove to fall from 1.1 million to 600,000 and prices rose rapidly.

A market comprises two parts..... Too many people focus on the buyers, without realising that in the absence of vendors willing and able to sell at lower prices, buyers must reach up to where the market is.

thanks for the link to the acadametrics stuff by the way :cool: interesting read!
cheers
Wig

No worries.

I take it you now accept there isn't a 30% gap between asking and selling prices.;)

bmar71n

justjohn wrote: »

You have to value based on Area,Sold prices, market availibility in the area and market movement.

NOT estate agent wishfull thinking/hope, Seller expectation (these 2 are irrelivent)

And as for averages , we are just about to complete on a rics valuation property of £179,000 marketed at £179,000 for £114,000

So go figure.

i would be concerned about that RICS valuation if what you say is true, unless it is a very outdated valuation there is some serious negligence there

justjohn

bmar71n wrote: »

i would be concerned about that RICS valuation if what you say is true, unless it is a very outdated valuation there is some serious negligence there

In a 50 mile radius of me only around 10% of the houses sell for any were near the RIC'S valuation. The average house stays on the market for 1-2 years.

Most sell for 5-30% below. The house we have purchased was not described/advertised in the best manner.

I am concerned about all RIC'S valuations. In my opinion there are not many that give a true value of a house. Problem is the valuer needs knowledge of the area and many do not.

The RIC'S/HOME REPORT valuation is a piece of junk. You only have too read all the disclaimers to realize that. The valuation is effected by many other factors. Just because the valuation is on paper in black and white does not mean thats its value. If you read the disclaimers it even says that. Its someone guesstimate based on SOME facts that they do not take responsibility for.

I assume that a RICS valuer can never be negligent, Provided he has followed the rules in the RED BOOK and states everything he finds needs further investigation.

However i cannot get a hold of the RICS RED BOOK to verify this.

theGrinch

how quickly they need to sell and the position of the buyers also must be factored in.

justjohn

theGrinch wrote: »

how quickly they need to sell and the position of the buyers also must be factored in.

Yup but thats the info you need just before you put the offer in lol

I always attempt to get that background info discreetly whilst viewing. By reading how the seller reacts too questions.