First time buyers setting sights too high?

Beachview_2

I just don't understand why first time buyers book a viewing for a house, then stand there and say they can only afford to buy a property at £10,000. Well I do, I know everyone likes a bargain, and a bit of negotiation, but I think this is taking it a bit too far. Its not as if the house needs any work doing to it, its not a project.

The price was already reduced so it is about £10,000 below ratable value as is normal in the area. The house is in line with the other similar properties in the area.

So I was thinking, are first time buyers looking at houses that are a bit too dear for them, setting their sights too high, when they should really be looking at a cheaper property, like a terraced house or a flat that would actually be more affordable, instead of the 'must have' 3 bed semi.

SerialRenter

Perhaps,

But maybe there's no such thing as an affordable house for your average first time buyer in certain areas.

browneyedbazzi

Beachview wrote: »

I just don't understand why first time buyers book a viewing for a house, then stand there and say they can only afford to buy a property at £10,000. Well I do, I know everyone likes a bargain, and a bit of negotiation, but I think this is taking it a bit too far. Its not as if the house needs any work doing to it, its not a project.

The price was already reduced so it is about £10,000 below ratable value as is normal in the area. The house is in line with the other similar properties in the area.

So I was thinking, are first time buyers looking at houses that are a bit too dear for them, setting their sights too high, when they should really be looking at a cheaper property, like a terraced house or a flat that would actually be more affordable, instead of the 'must have' 3 bed semi.

I don't think you can make fair generalisations about first time buyers any more than you can about any other group of people. There may well be some FTBs that set their sights high and view places that are outside what they can realistically afford, but there are also others that do the opposite - my partner and I are buying our first home and it is the typical 3 bed semi, but we're borrowing less than half what the bank was prepared to lend.

eddddy

Beachview wrote: »

I just don't understand why first time buyers book a viewing for a house, then stand there and say they can only afford to buy a property at £10,000.
....

Hi Beachview

Don't necessarily blame the FTBs for this, it may be the EAs 'playing games'.

I've come across EAs who talk gullible FTBs into viewing properties they can't afford, because:

1. They hope the FTBs will 'fall in love' with the place, and then try to raise extra funds from mum and dad etc

2. It makes the EAs stats look good (X viewings in Y days) - even though most of the viewers were unsuitable.

3. To convince the seller that they need to reduce the price, because it is above the budget of everyone that's interested in it.


Regarding point 1 -
Many sellers would say 'Only let people who can definitely afford the house have a viewing'.

But many salespeople (or EAs) would say 'Show the property to as many people as possible - even if they claim it is not the type of house they are looking for, or they can't afford it. It may be the most unexpected person that ends up buying.'

ruggedtoast

This matter can only be resolved, with a rightmove link.

Beachview_2

eddddy wrote: »

Hi Beachview

Don't necessarily blame the FTBs for this, it may be the EAs 'playing games'.

I've come across EAs who talk gullible FTBs into viewing properties they can't afford, because:

1. They hope the FTBs will 'fall in love' with the place, and then try to raise extra funds from mum and dad etc

Yes I'd say that sounds likely.

moneyistooshorttomention

Or the other possible scenario is over-optimistic EA's deliberately sending viewers off to look at houses they cant afford hoping to beat the vendor down to a price that is less than the house is worth. Thus making many EA's "eternal optimists" with entirely unreal hopes and expectations in the eyes of most vendors...as these FTB'ers take EA's word as gospel and assume they can beat the vendor down more in price than they actually really have a hope in heck of doing...

lessonlearned

When I was a new build sales negotiator first time buyers seemed to be my speciality. My "strike rate" was usually the highest in the region.

The reason for this was not because I am a "super salesperson" or because I pushed unsuitable properties that they could not afford and encouraged them to over-extend themselves but because I took the time to actually sit down and talk to them.

I would discuss their finances, their hopes and dreams, their future plans etc. I would also encourage young first time buyers to bring their parents/family/friends etc to the site.

I've lost count of the little "tea parties" that I held whilst we discussed the issues involved and thrashed out a workable solution.

A classic case ........

A young couple visited my showhouse and fell in love with it but sadly it was way out of their price range. Unlike a lot of EA's or other developers I didn't dismiss this young couple out of hand because they had a miniscule budget and a wish list as long as their arm.:rotfl:

I afforded them the courtesy that their visit demanded and sat them down to discuss their requirements, budget etc . I asked them where they were living and how much rent they were currently shelling out. They were astonished when I explained that they could afford a mortgage that would cost them considerably less than they were paying in rent. OK not for my showhouse but something just as nice, albeit smaller.

They came back the next day with both sets of parents. We discussed budgets, household management and, being something of an amateur interior designer, I was able to let them into a few designer tips and secrets to show them how to decorate and furnish a house on a shoestring. They ended up buying one of my smaller, less glamourous properties - one that was well within their budget.

Afterwards their parents thanked me profusely for my time and efforts. They told me that of all the agents and developers they had spoken to I was the only who had taken an interest in the young couple and who had guided them through the house buying maze.

Everyone else had written them off as unrealistic dreamers who were overreaching themselves.

The point is many FTB's may initially be a tad unrealistic in their expections - I certainly was when I bought my first home:rotfl:

None of us are born knowing this stuff - we've all had to learn or needed someone who knows the ropes to guide us.

TV programmes such as Location, Location with their "ooh just offer 10% less than the asking price mantra" have a lot to answer for. They paint a picture where everyone gets a huge discount just by making a "cheeky offer".

What people tend to forget is that this is just TV and bears little relation to the real world.

We old hands all know that it is market forces which determine prices.....

If the market is slow then you might get a discount, if it's hot then you won't - in fact you may well need to pay above the asking price to secure your purchase.

Re EA's sending people to view houses that are not within budget.

I once failed to pass on property details to a would be purchaser because the property was priced at more than the top end of the budget they had given me. They were furious.

They said "Oh but if it's the right house then we will go over our initial budget"........

So........I'm supposed to know that:rotfl::rotfl:

I may have many skills but unfortunately mind reading isn't one of them;).

Needless to say I didn't make that mistake again. From then I did indeed send out details for properties that were higher than the "stated" budgets.

If the purchaser wasn't interested they could just bin them.

Who'd be an EA - damned if they do, damned if they don't.:rotfl::rotfl:

moneyistooshorttomention

Difficult situation re the "top of budget" figure EA's have been given. My suspicion is that (when I was buying starter home and certainly my current one) that I got sent ones over my stated budget both times.

Provided they weren't being too "over stated budget" then I tended to think it was worth seeing details of ones just a LITTLE bit over the top figure...just in case I decided to "stretch like mad" to get to it. In the event...for my starter house I "stretched" until every "string in body" was as "tight" as it could go. As I recall, I knew I could just about manage c. £28,000 for starter house back when and I s...t...r...e..tched to nearly £33,000 in the event.

This time round, I bought under budget (though I do rather suspect I'm steadily making up for it now with all the work on the place...:cool:)

lessonlearned

moneyistooshorttomention wrote: »

This time round, I bought under budget (though I do rather suspect I'm steadily making up for it now with all the work on the place...:cool:)

Oh dear, hope you haven't bought a "Money Pit". (I love that film, especially the "set piece" where the house practically falls down around their ears.:rotfl:).

My DS1 appears to have bought his very own "Money Pit" - the survey did not make easy bedtime reading:eek: He has certainly bitten off a bit more than he can chew so I have taken pity and am helping to project manage the renovations, using all my penny pinching ways to keep costs down.

We'll get there but yes it will take longer and cost more than we had originally hoped.

Then again renovation projects usually do;)

Good luck - just take it one step at a time and try not to panic.

Remember the elephant - one bite at a time.....

moneyistooshorttomention

Oh yes...I know that phrase well these days and often quote it to myself re the elephant.:rotfl:...and then I run off and start arranging the next task...:cool:

A workmans eyebrows shot up when I told him earlier today just how much I have done to date:rotfl:...but he refrained from the comment I'm often getting at the moment of "Rome wasn't built in a day"...whilst he was probably thinking "Well this one certainly intends to build it in a week if she possibly can....:rotfl:".

I don't think I've bought a Money Pit...just a house that's rather old-fashioned in style and with a couple of bodges to sort out. Its not major major work in my book (no damp, no dry rot, no wet rot, no subsidence and it has most of its doubleglazing). Actually, there is noticeably less work to do on this one than on my last one...and I managed to get about 95% of the asking price on my last one (albeit an AP that took into account work needing doing).

I'm not panicing...just gritting the teeth a bit harder and working out and re-working out best way to deal with this. I do feel rather like a Project Manager and the house probably feels rather like a Swiss Cuckoo Clock (ie one workman out one door...whilst another one comes in the other one).

Sorry to hear your sons house is working out to be rather more than anticipated....