Unrealistic vendors?

jamesmorgan

breadlinebetty wrote: »

It's also nonsense that the majority of vendors expect to get 8 or 10% less of their asking price. Do you seriously think someone selling their £1M property expects to sell it at a £100,000 reduction? I don't think so!

Neither would soeone selling a £100k property expect to sell it at a £10,000 reduction. Not on your nellie!!!

Regardless of what you feel should happen, the figures show quite clearly that this is what actually happens. The land registry keeps accurate figures of actual sale values. It is also quite easy to find out average asking prices. In good times, sale values are around 5% less than asking prices. In tough times they will exceed 10% (in 2009 the difference was 12%). Of course, Estate Agents take this into account when setting asking prices.

It could get worse here - in Spain currently sale prices are 23% below asking prices.

SuzieSue

sw_jay wrote: »

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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.

Prices haven't gone down everywhere. I know someone who bought a flat on a popular estate in 2003 for £168k (he paid over the odds because he really wanted it for personal reasons). Identical flats sold in 2007/8 for £220k and sold prices now are £245k.

OP, as other people have said, you only have 2 options:

1. Find a vendor who is desperate to sell because of divorce, work relocation etc
2. If you can't find someone desperate to sell, then agree a price that the vendor will sell at.

COLOURBOUNCE

Thrugelmir wrote: »

All has changed. The property market is at a pivotal point. So take those RTG's off. Those with patience may well be rewarded.

If you don't have to buy right now I would stay out of the way. Who knows where this will end up, but looking at all ths stats, I have a feeling this time will play out with alot more aggression than we saw in the 90's. That said, the real downturn has been held back by artificial methods for a few years already, and it could be many more before it really kicks in. Just a question of do you want the right house to get on with your life, or kick yourself for years to come.

Thrugelmir

COLOURBOUNCE wrote: »

If you don't have to buy right now I would stay out of the way.

No plans to move. Personally unless I saw my "dream" home for which I would pay what I needed to acquire. I won't be changing my mind.

Interest rates have some way to rise yet. This coupled with the restricted availability of mortgage funds can only squeeze prices down further.

So we may see a protracted period of stagnation (decade or so). Until the issues facing the banks in terms of deleveraging their balance sheets is complete. There's a global game in play. Which will determine the landscape significantly.

COLOURBOUNCE

That's the line really, if you want the house then pay what it takes to get it. Good luck to the OP, hope you get what you are looking for, just don't over do it in getting it.

sw_jay

Some interesting replies. We will continue looking and will no doubt find the right house at the right price. To the person who thought I live in a 'poor' area, I actually live in the South West of England so prices have seen relatively small price decreases compared to other areas of the country (South East excluded). And I am definitely looking at houses I can afford, in fact I could borrow 100k more than the houses I am looking at, I just don't want to go into the 3% stamp duty bracket. That being said, just because I can afford to pay more, doesn't mean that I am going to pay more than the house is reasonably worth, certainly not 30k more than it cost at the peak of the market without any work being done to it.

I wish that I wasn't in so much of a rush to move. Unfortunately my partner and I are falling over each other in our little house and we have no choice if we want to start a family in the next year or so.

Of course we all have different opinions and vested interests, hence what makes this forum so interesting.

Rudess

sw_jay wrote: »

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?

Combinations of greedy EA and greedy vendors. I rarely saw a property which is sold for less than the price it was bought, because people in this country do not know how to bargain and they don't check enough before making an offer.

The EA will always inflate the price by at least 10% of it's real value if not more, that's why always offer at least 10% less than the asking price. You can always raise your offer, but always better to start as low as possible. Of course don't give an insulting offer which is too low but be smart not to play into the EA and vendor's hands by offering a price that is very close to asking price or even exceeding it.

bitsandpieces

phill99 wrote: »

Evidently, vendors do.
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.

There's no reason to assume you'll always make a profit on selling property (any more than you will on things like shares). I sold my flat for a little less than I paid for it - I got the best price I could, and refused some offers and negotiated hard, but I did want it sold. The market had fallen, and if I'd have been holding out for a profit I'd probably still have an empty and unsold flat to this day. I'd have liked to have made a nice profit on the sale, but new from when I bought that this couldn't be assumed.

I don't know about the places you've been looking at - or whether 10% below asking is a fair offer. Also, some people need a certain selling price in order to clear a mortgage - so may be unable to sell cheaply. It doesn't seem sensible for people to assume that they will always make a profit on selling a property, though.

Rudess

. It doesn't seem sensible for people to assume that they will always make a profit on selling a property, though.

That's exactly the problem in this country and I wrote about it in the post above.

SuzieSue

Rudess wrote: »

That's exactly the problem in this country and I wrote about it in the post above.

But this isn't a problem confined to the property market in the UK, it is what happens in life in general all around the world.

When someone trys to sell something they own, they want to get as much as they can so why should property be any different? If they don't desperately need to sell, why should they accept a price that they aren't happy with?

If I found a property I really wanted to buy and had been looking for years, then I would pay what the seller was prepared to accept (after trying to negotiate a lower price of course). If my negotiations didn't work then it would appear that the seller was in no hurry to sell, so I would either wait a few months and try to negotiate down again (hoping that it didn't sell in the meantime), or accept defeat and pay what the seller was asking.

I don't really know what the OP is complaining about - the value of a house is not a science - it is simply what someone is prepared to pay for it.

I don't agree with the OP's notion that sellers are being unrealistic. The OP wants to buy, but isn't prepared to pay more than than he thinks the property is worth. So why should the sellers accept less than they think it is worth unless they are desperate to sell?