Advice on what to bid on 'offers over £190k' + pics!

WibbleSnarf

kaylz39 wrote: »

I wasn't aware that the house was up for £199k originally, they obviously had little interest so lowered it pretty quickly. If a house was up for £199k I would have thought the vendor would be hoping to receive around the £180-£185k mark. Only someone stupid would go in and offer the asking price without testing the water...I think?!

Hoping. You said it. That word is the absolute key.

kaylz39 wrote: »

I don't want to offend the vendor though and make them think that were trying to con them. I've some vendors after receiving offers haven't allowed buyers to increase their offer as they felt offended- in this market I think thats insane!

You're worried about offending them by not offering what they are hoping to receive?

Let me ask you a question. Why are you not offended that while house prices in the area have actually dropped a fraction since they bought it, they still hope that you mortgage yourself up to the hilt for the next 25 years to deliver them a tidy profit so that they can buy themselves a nice car, go on a few nice holidays and still have thousands left to spare?

WibbleSnarf

ukcarper wrote: »

That’s not to say you shouldn’t offer less than you think its worth but I just think 15% is a bit to much.

Eh? Why? I'm sure you've heard of indices such as the Halifax Index, Nationwide Index, Land Registry Index and the RightMove Index. Have you heard of another, coined the 'Delusion Index' by HPC posters? It tracks the disparity between asking prices (using Rightmove's index) and selling prices (using Nationwide's index).

A ratio of 1.0 would mean asking prices are, on average the same as selling prices. A ratio of 2.0 would mean asking prices are, on average, double selling prices. A ratio of 1.5 would mean asking prices are, on average, 50% higher than selling prices, etc.

Here is a picture of the most up to date graph and the main thing you should notice is that the ratio has not dropped below 1.35 since April 2008, meaning that asking prices, on average, have been more than 35% higher than selling prices since then.

ukcarper wrote: »

If that house was mine I personally wouldn’t feel insulted if you offered me £126 but I certainly wouldn’t accept the offer.

And I'd hope not too. If I was considering buying from you, made an offer that I was willing to pay and thought you had taken offence, I'd strongly consider walking away whether you accepted or not as I'd not be confident that you'd vacate the house without leaving some 'surprises' behind. This preoccupation people have with hurting feeling, insulting people and taking offence when spending tens or hundreds of thousands of pounds is a nonsense. Most people had to work very hard for many years to earn that money - if someone felt offended when you offered a big chunk of it to them, they are probably not worth dealing with.

ukcarper

WibbleSnarf wrote: »

Eh? Why? I'm sure you've heard of indices such as the Halifax Index, Nationwide Index, Land Registry Index and the RightMove Index. Have you heard of another, coined the 'Delusion Index' by HPC posters? It tracks the disparity between asking prices (using Rightmove's index) and selling prices (using Nationwide's index).

A ratio of 1.0 would mean asking prices are, on average the same as selling prices. A ratio of 2.0 would mean asking prices are, on average, double selling prices. A ratio of 1.5 would mean asking prices are, on average, 50% higher than selling prices, etc.

Here is a picture of the most up to date graph and the main thing you should notice is that the ratio has not dropped below 1.35 since April 2008, meaning that asking prices, on average, have been more than 35% higher than selling prices since then.





And I'd hope not too. If I was considering buying from you, made an offer that I was willing to pay and thought you had taken offence, I'd strongly consider walking away whether you accepted or not as I'd not be confident that you'd vacate the house without leaving some 'surprises' behind. This preoccupation people have with hurting feeling, insulting people and taking offence when spending tens or hundreds of thousands of pounds is a nonsense. Most people had to work very hard for many years to earn that money - if someone felt offended when you offered a big chunk of it to them, they are probably not worth dealing with.

Lets get one thing straight you cannot compare right move to others it uses a completely different method to the others and the difference between right move and them bears very little resemblance to what the average reduction houses sell for.

Secondly some houses our over priced but you take that into account when you work out what you think its worth so then offering 15% under that is to low.

　

　

　

WibbleSnarf

ukcarper wrote: »

Lets get one thing straight you cannot compare right move to others it uses a completely different method to the others and the difference between right move and them bears very little resemblance to what the average reduction houses sell for.

Eh? How about *you* get something straight? The RightMove index is a monthly average of asking prices according to the biggest property listings website in the country. The Nationwide index is a monthly average of selling prices according to a lender which has a third of the mortgage market. The reason they bear little resemblance is that vendors are asking for, on average, more than 35% more than houses are selling for.

ukcarper wrote: »

Secondly some houses our over priced but you take that into account when you work out what you think its worth so then offering 15% under that is to low.

How is it too low? Is it too low if the vendor accepts it?

WibbleSnarf

Take this place in the same BB2 postcode district that the OP is looking in. It was first listed in April 2012 for Offers In Excess Of £279,950. It's now listed for Offers In Excess Of £215,000.

That's already a reduction of more than 23%.

As for the "Offers In Excess Of" bit, if they really couldn't accept offers below the price they are advertising at, what's with the >23% reduction?

15% is just a number you've made up, as is the price that a lot of vendors decide to market their houses at, in hope of finding a gullible buyer who is willing to pay the price they are asking. I don't blame the vendors - good on them for trying. But don't try to suggest that there is somehow something wrong offering any amount you please - there simply isn't.

DRP

WibbleSnarf wrote: »

Where do you get the figure ~+14% from?

The house was bought in November 2005.

In November 2005, the national average price according to the Land Registry was £158,519.

Than national average price today, according to the same index is £161,777.

That's an increase of ~+2.1%.

So, apply that to the £145,000 paid in 2005 and you get a figure of £148,045 today. So, it turns out, if you use the national average, I was actually doing the vendor a favour.

Better still for our prospective buyer, if you use the averages for the district "Blackburn and Darwen", the average price in November 2005 was £78,591 and today it is *down* to £78,304.

So, I'm genuinely not being rude, but where are you getting your data from?

we're all here to debate, We all should be happy to be corrected/edumucated. I know you're not being rude. :cool:

I used the CLG mix-adj from http://www.houseprices.uk.net/graphs

in my colour-blindness I had mixed up those figures with the LR data!

WibbleSnarf wrote: »

Moving onto the next section of your post, where are you get the idea that "most vendors are looking to get about 90%+ of their asking [price]" from? I am looking to get a brand new Aston Martin - doesn't mean I'm going to get it. Get yourself onto Property Bee and then ask yourself how you came to your conclusion. It matters not one jot what a vendor is looking for. All that matters is what a buyer agrees to pay.

I can only go by my experience here - i use rightmove and property bee extensively and from my experience in the local market, i know that offer of 90-95% are being rejected left, right and centre - the market in my city is low numbers but booming prices.

WibbleSnarf wrote: »

In short, OP, unless there has been some significant money spent to improve (not just maintain) this house since 2004, pay more than £150,000 and you are paying too much.

No such thing. Average prices are an almost totally meaningless statistic as they include all prices including extremely high or low. To buy a house you don't need to satisfy some arbitrary average value, you have to agree a satisfactory deal for the vendor. Mean prices may have not risen much , but if the vendor isn't desperate or stupid he will fleece you for as much as possible. If the buyer is desperate or loves the house he will pay more than 'average'

WibbleSnarf wrote: »

You could take the advice of those saying things like "make an offer of £174,950 and 'test the water'" but it's not their money you'd be throwing away, it's yours.

Look at it another way. Imagine what that £24,950 you'd be wasting could buy you. Then consider that this £24,950 would be borrowed money and that you would therefore have to pay back the interest on it. It becomes approximately £40,000. Think what *that* would buy you!

Be bold. Pay your money. Take your choice.

it is always worth going in low, but you need to realise that to actually secure the deal you may need to match the vendors expectations :money:

WibbleSnarf

DRP wrote: »

we're all here to debate, We all should be happy to be corrected/edumucated. I know you're not being rude. :cool:

I used the CLG mix-adj from http://www.houseprices.uk.net/graphs

in my colour-blindness I had mixed up those figures with the LR data!

Understood. So you got your numbers wrong. You were happy to use the LR figures when you said "based on national land registry figures, the house would arguably be 'worth' about 165k now (~+14%)" but now that it's been pointed out to you that you got your numbers wrong, average prices are almost totally meaningless? Hmmmmm.

DRP wrote: »

I can only go by my experience here - i use rightmove and property bee extensively and from my experience in the local market, i know that offer of 90-95% are being rejected left, right and centre - the market in my city is low numbers but booming prices.

I'm not saying that all offers at an appropriate price will be accepted. Many vendors across the country are in financial dire straits and cannot afford to drop to a sensible price as they've released equity and spanked it on swanky holidays, cars, lifestyles and they are hoping that some mug will come along, pay their asking price and clear their debt for them. I don't blame them for trying but any buyer who is happy subsidising someone else's extravagance is a fool to themselves in my opinion. The paradigm has shifted. The credit boom is over. You're always going to get vendors with delusional ideas that their houses are somehow different, somehow worth more - there are plenty like that in my area. In the main, they sit on RightMove and until someone rich and foolish comes along (these people are few and far between nowadays) the house will sit on RightMove forever more.

DRP wrote: »

No such thing.

No such thing as paying too much? Ha ha ha ha ha ha:rotfl:

£300,000 too much for that house? £500,000 too much? Where would you like me to stop? Of course there's such thing as too much. The definition of too much is a very simple one. It's 1p more than the prospective buyer decides that the house is worth. What the vendor is asking for is irrelevant. If the vendor refuses to accept what the prospective buyer thinks the house is worth, the vendor should take their money elsewhere.

DRP wrote: »

Average prices are an almost totally meaningless statistic as they include all prices including extremely high or low.

That doesn't make them meaningless!?! It simply makes them the average! There is an issue with indices such as the Nationwide one which is that they don't show cash buyers who, owing to their bargaining position, would probably pay less than a mortgagor. Likewise, the Land Registry doesn't show 'distressed sales' such as auction sales as they have this weird view that they aren't sold at 'market rates', even though auctions are, erm, markets! So, yes, the indices aren't without their issues but they are better indicators that the view of a vendor with vested interests, (possibly) debts to clear and an emotional connection clouding their objectiveness.

DRP wrote: »

To buy a house you don't need to satisfy some arbitrary average value, you have to agree a satisfactory deal for the vendor. Mean prices may have not risen much , but if the vendor isn't desperate or stupid he will fleece you for as much as possible.

Haaaaaallelujah! Therein lies the point. The vendor "will fleece you for as much as possible." You counter that by offering what you believe the house to be worth and not a penny more. Anything more than that and you're being fleeced.

DRP wrote: »

If the buyer is desperate or loves the house he will pay more than 'average'.

Not necessarily. Simply leave the offer on the table for a few months - let the vendor know that the offer will remain until you find something else. The vendor may decided that it makes sense not to lose the sale.

DRP wrote: »

it is always worth going in low, but you need to realise that to actually secure the deal you may need to match the vendors expectations :money:

It is always worth going in lower than your maximum valuation of the house but that maximum valuation can still be 20-30-40%, however much you please, below the asking price. To secure the deal, the vendor may have to match the buyer's valuation. :money:

kaylz39

Can anyone who can access property bee give me more info on 5 Brotherston Drive, Blackburn?

This house is also for sale for £199,950 but I would like to know how long it has been for sale for for/if it's been lowered etc. may give me some ammunition when negotiating on this one

Thank you!

kaylz39

Just to let you know my Hubby called the EA yesterday just to test the water. He said we know what they're looking for but domt think its worth that & we can't afford that (we can go to £190k max). The EA said to offer what we think the house is worth as 'you never know'. This instilled a bit of confidence as its now obvious people who look for 'offers in the excess of' don't always get them, was expecting the EA to say they won't consider anything below.

sinbad182

Does WibbleSnarf suffer from some kind of mental defect?