Unrealistic vendors?

sw_jay

I've been doing lots of house hunting over recent months and as someone who always does my homework before looking at a house I am surprised at the amount of houses on the market that appear to be unrealistically priced.

Here's an example of just two I have seen recently:

1. 3 bed chalet bungalow on Rightmove for £279,000. House was bought for £267,000 in Nov 2006. Minor cosmetic work done to it since then.

2. 3 bed Victorian terraced on Rightmove for £229,000. Bought for £205,000 in 2007. Again, only minor cosmetic work done in that time (re-decoration etc).

House prices have gone down by around 15% (according to LR) in this area since the peak in 2007 so I don't see how vendors can justify the price increases without extending or the like. I have probably seen 5 or 6 houses like this.

I understand that sellers want to get a good price for their homes and might try their luck a little bit but some of these prices seem to have just been plucked out of thin air. It wouldn't be so bad if they were prepared to accept a lower offer but they seem to be sticking to their guns.

I have made what I believe to be reasonable offers and these are just being immediately turned down. In one case I was told that my offer was insulting ( I wouldn't consider an offer of 10% below the asking price as being insulting). Apart from not wishing to offer more than the house is worth, I am concerned that mortgage valuations are going to come in much lower than what the vendors seem to be prepared to accept and the transaction will just break down.

I am getting a bit depressed now. I am desperate to find a new home and am prepared to pay a fair price for a decent property, but for some reason vendors seem to think we are still in 2007 and won't accept prices have dropped since then! I am in a good position, mortgage ready and no house to sell but at this rate I'll still be looking in a year's time.

Anyone finding the same thing?

BitterAndTwisted

If they're turning down your offers as derisory they are either deluded or your offers really are insulting if they are finding buyers. Sooner or later the deluded vendors are going to get with the programme if they are intent on selling. I'd just sit tight and persevere.

cattie

I think the answer is in your last paragraph, basically, you are desperate to find a new home but are not happy that vendors are not willing to sell their houses at the price you would like to buy them at.

With regards to the first house you mention, it sounds perfectly reasonable that somebody would put up the house they bought 6yrs ago at £12k more than they paid. Even minor cosmetic work costs and let's say they agree a sale at somewhere between £265k-£270. Hardly trying to cash in are they? With ea costs for selling & legals for sale and further purchase, that's in the region of £5k upwards from the proceeds of the house sale to start with, so maybe they come out with £260k-£265K if they are very, very lucky.

Also, you have to bear in mind that many people need a certain amount for their house to be able to afford to move on to the next one and if they can't realise close to this figure, then the possibility of them moving on is zilch. Mortgages are not just harder for FTB's, everybody is affected by lenders tightening up their lending criteria.

Perhaps you need to be looking at cheaper houses that are priced closer to the figure you'd like to ultimately pay.

sw_jay

I have no problem with the price range I am looking at, I'm just unwilling to pay more for a house than it's worth just because I really want to find one. What I am struggling to understand is how vendors can price their house at more than it was worth 5 or 6 years ago when prices have gone down significantly since that time. The 229k for example, if bought for 205k in 2007 is worth 175k now if you take off the 15% prices have dropped. That's a huge difference. When I asked the EA to justify this he could only say that they had needed to decorate throughout. Even if I was very generous and said they had spent 25k doing the house up, is it really worth another 30k on top of that?

I do realise there are other factors involved but this does seem a bit much. Maybe I wrongly presumed this was a buyer's market at the moment and there is no such thing as a 'bargain' anymore.

playaz

Carry on with what you are doing - anyone buying a house in the 'boom' years cannot expect to get a profit when houses prices are going down practically month after month... if they wish to sell the house at 2006 prices fair play to them... but I bet the house will be on the market for a loooong time (or just forever).

I am FTB - and like yourself will not get ripped off by unrealistic sellers that seem to think the odd new cupboard here and there allows them to make thousands in profits when house prices are going down.

Stick to your guns

mandi

sw_jay wrote: »

I have no problem with the price range I am looking at, I'm just unwilling to pay more for a house than it's worth just because I really want to find one. What I am struggling to understand is how vendors can price their house at more than it was worth

Jay as a rule it isn't the vendor that sets the price but the Estate Agent based on the current market value .

At the end of the day any given property is only worth what your willing to pay for it regardless .

phill99

sw_jay wrote: »

I wouldn't consider an offer of 10% below the asking price as being insulting

Evidently, vendors do.

I think you are being a bit unrealistic.

If the shoe was on the other foot and it was YOU that bought a house for £207k in 2007 and was struggling to get your purchase price plus a modest profit in 2012, you would be very !!!!!! off if someone had offered 10% below your asking price and no doubt be highly insulted.

and this issue of 15%: isn't that just the statistical average, which includes the complete spectrum of the market from 2 up 2 downs to 15 bed mansions with swiming pools. Averaging is not necessarily good ana;lysis as it doesn't identify large and small losses as well as minor gains. So to say 'actually the house is worth £175 becasuse thats what the statistics say' is absolute madness and you need to take a reality check.

phoebe1989seb

I agree that some vendors are being totally unrealistic. When we were looking to sell and buy last Spring there were houses we saw on RM that had been on for a year or more and the price had barely dropped - if at all. One or two of these are still on the market now at the same price......

We however had bought in late 2007, spent in excess of £40k on restoring the property, yet marketed at the realistic price of £10k less than we had paid and accepted an offer £10k lower than that.....which we were content with as we needed to sell quickly to relocate closer to family.

Obviously the people not able/prepared to drop their prices to a realistic level are not serious about selling or cannot afford to do so because of financial commitments.......

nearlynew

what vendors paid for the house in 2007 is immaterial.
they may have paid over the odds and now want you to pay for their mistake.

what it is worth now is all that matters.

patience is your best weapon.

Thrugelmir

sw_jay wrote: »

I'm just unwilling to pay more for a house than it's worth

That's merely your view. Even in the worst of markets a highly desirable property will sell at a premium. If there's lots of genuine interest.

freyuk

The expectations to cash up from selling your house are still really big for the majority of people, regardless of current situation. That is inflated by the valuation made by the State Agents, currently there is a shortage of properties on the market, causing State Agents to "inflate valuations" to get the business. There is a huge shifting of properties between State Agencies at the moment (been looking at properties for 2 years now trying to buy one), instead of a reduction on price.

Keep checking everyday and when you see a property you like, move fast, don't delete your saved properties, there is lots of them changing from sold STC to available, and those are ripped for a reduced offer. If properties get sold instead of staying in the market for a long time in your area, then you have to reconsider an adjustment of that 15% fall in price.