House prices, emotions and 'pressure'

robcyb

I've been posting a lot on the forums recently due to the fact we're now in the position of buying our first house together. With years of hard graft and saving we're up to a point where we can finally put our first foot on the ladder (which seems to be getting away from us each month). Forgive me in advance if this seems like a rant, but I honestly wanted to open up the conversations to others to get a balanced opinion on the matters addressed, below.

Having spent 5 years saving, we've felt that our pot was never good enough to keep up with the rises in prices. In our local area (Stevenage, Hertfordshire) the house prices of an 'average' 3 bed terraced have rocketed from £200,000 to £300,000 within a 2 year period. As you can understand, savings simply cannot keep up with such unprecedented rises. Not that I have a sense or feeling of 'entitlement' to own a home (it's always been a distant dream since I was a child) but the whole concept of the nuclear family (2.x kids, a car, a house and a family) still resonates with me as a person; but long gone are those days! <ends on the sociological stance>

The million-dollar question for many people (including home owners, etc.) is when and indeed *if* the housing market is likely to crash again. As a potential buyer - we've been hoping for that for some time (obviously it has some impact on purchasing, as sellers will likely not sell) and at the same time, we're super keen to jump on the ladder before we jump into the bottomless fiery pit of not being able to buy (drastic, I know!).

Having put offers out on half-a-dozen or so properties over the last 3-4 months, we've been through quite the emotional roller-coaster. Many vendors have been told be estate agents that they can fetch a tidy amount for their properties, and yet data of previous sales are clearly below such numbers. When tendering an offer, we've typically started 10% below asking (which might be seen as cheeky) and clearly listed our reasons. We've then tendered improved offers that are closer to full asking and have been rejected again as the vendors have been 'promised' by the estate agents that they can fetch the inflated sum of money. As with any sale of good/services it's a game of tug-and-war between buyer and seller to find the acceptable price to agree on.

The issue I would like to have an open conversation around is where to find the 'right' stand-point as a buyer, and how the estate agents are obviously working to gain the market (as with any business!). I've had many conversations with the vendors prior to making the offers and they seemed positive - but after speaking to the estate agents the responses back were often met with frustration that a potential buyer should seek to find a better price.

I welcome all opinions - but please refrain from using colourful language .

Jack_Johnson_the_acorn

robcyb wrote: »

I've been posting a lot on the forums recently due to the fact we're now in the position of buying our first house together. With years of hard graft and saving we're up to a point where we can finally put our first foot on the ladder (which seems to be getting away from us each month). Forgive me in advance if this seems like a rant, but I honestly wanted to open up the conversations to others to get a balanced opinion on the matters addressed, below.

Having spent 5 years saving, we've felt that our pot was never good enough to keep up with the rises in prices. In our local area (Stevenage, Hertfordshire) the house prices of an 'average' 3 bed terraced have rocketed from £200,000 to £300,000 within a 2 year period. As you can understand, savings simply cannot keep up with such unprecedented rises. Not that I have a sense or feeling of 'entitlement' to own a home (it's always been a distant dream since I was a child) but the whole concept of the nuclear family (2.x kids, a car, a house and a family) still resonates with me as a person; but long gone are those days! <ends on the sociological stance>

The million-dollar question for many people (including home owners, etc.) is when and indeed *if* the housing market is likely to crash again. As a potential buyer - we've been hoping for that for some time (obviously it has some impact on purchasing, as sellers will likely not sell) and at the same time, we're super keen to jump on the ladder before we jump into the bottomless fiery pit of not being able to buy (drastic, I know!).

Having put offers out on half-a-dozen or so properties over the last 3-4 months, we've been through quite the emotional roller-coaster. Many vendors have been told be estate agents that they can fetch a tidy amount for their properties, and yet data of previous sales are clearly below such numbers. When tendering an offer, we've typically started 10% below asking (which might be seen as cheeky) and clearly listed our reasons. We've then tendered improved offers that are closer to full asking and have been rejected again as the vendors have been 'promised' by the estate agents that they can fetch the inflated sum of money. As with any sale of good/services it's a game of tug-and-war between buyer and seller to find the acceptable price to agree on.

The issue I would like to have an open conversation around is where to find the 'right' stand-point as a buyer, and how the estate agents are obviously working to gain the market (as with any business!). I've had many conversations with the vendors prior to making the offers and they seemed positive - but after speaking to the estate agents the responses back were often met with frustration that a potential buyer should seek to find a better price.

I welcome all opinions - but please refrain from using colourful language .

Regarding house prices and value, most of the country is affordable. But I recognise that in some areas, prices have rocketed.

If you where a seller would you want the most you can get for the property or would you sell for less than you've been told you can get?

Remember if you want to trade up you're likely to need as many pennies as possible to bridge the gap.

Regarding what you should offer. You should be offering what you're willing to pay and can afford. If you think the property is overpriced it is unlikely to sell. But clearly someone must disagree with you if these properties are going on to sell.

mayonnaise

robcyb wrote: »

I've been posting a lot on the forums recently due to the fact we're now in the position of buying our first house together. With years of hard graft and saving we're up to a point where we can finally put our first foot on the ladder (which seems to be getting away from us each month). Forgive me in advance if this seems like a rant, but I honestly wanted to open up the conversations to others to get a balanced opinion on the matters addressed, below.

Having spent 5 years saving, we've felt that our pot was never good enough to keep up with the rises in prices. In our local area (Stevenage, Hertfordshire) the house prices of an 'average' 3 bed terraced have rocketed from £200,000 to £300,000 within a 2 year period. As you can understand, savings simply cannot keep up with such unprecedented rises. Not that I have a sense or feeling of 'entitlement' to own a home (it's always been a distant dream since I was a child) but the whole concept of the nuclear family (2.x kids, a car, a house and a family) still resonates with me as a person; but long gone are those days! <ends on the sociological stance>

The million-dollar question for many people (including home owners, etc.) is when and indeed *if* the housing market is likely to crash again. As a potential buyer - we've been hoping for that for some time (obviously it has some impact on purchasing, as sellers will likely not sell) and at the same time, we're super keen to jump on the ladder before we jump into the bottomless fiery pit of not being able to buy (drastic, I know!).

Having put offers out on half-a-dozen or so properties over the last 3-4 months, we've been through quite the emotional roller-coaster. Many vendors have been told be estate agents that they can fetch a tidy amount for their properties, and yet data of previous sales are clearly below such numbers. When tendering an offer, we've typically started 10% below asking (which might be seen as cheeky) and clearly listed our reasons. We've then tendered improved offers that are closer to full asking and have been rejected again as the vendors have been 'promised' by the estate agents that they can fetch the inflated sum of money. As with any sale of good/services it's a game of tug-and-war between buyer and seller to find the acceptable price to agree on.

The issue I would like to have an open conversation around is where to find the 'right' stand-point as a buyer, and how the estate agents are obviously working to gain the market (as with any business!). I've had many conversations with the vendors prior to making the offers and they seemed positive - but after speaking to the estate agents the responses back were often met with frustration that a potential buyer should seek to find a better price.

I welcome all opinions - but please refrain from using colourful language .

I would hold off for a while.

“Price cuts seen in prime central London in the immediate aftermath of Brexit are now filtering through to outer boroughs,”

https://www.bloomberg.com/news/articles/2017-03-01/these-are-the-places-in-london-where-house-prices-are-falling

Central London and outer boroughs for now, but if we get a train-wreck Brexit (which is looking increasingly likely), your average 3 bedder in Stevenage will be back to 200k - or lower - before you know it.

edinburgher

My experience as a first time seller was that the EAs we spoke to offered a likely range of prices. We considered 2 seriously.

The first was ostensibly higher cost, a 'prestige' EA (you know, the sort that sell all the character properties and the expensive end of the market). They offered a range that was perhaps a little idealistic (sounds like the sort of firm advising the vendors of the houses you are looking at).

The second started out at about the same cost, but offered a more pessimistic/balanced opinion on what we would achieve for the flat. We soured on them as they were very motivated/pushy and because they started 'lowering' their fee structure but wanting a bump if they achieved £x, a price that looked pretty realistic (i.e. pretending to do us a favour).

We went with the first. It wasn't solely because they seemed to think that we would get more, but we did like their positivity. There is a lot of emotion when you're selling as well as buying and you want to achieve the best possible price that you can as a seller.

Granted, a slightly different story as we had always thought that we would go to a closing date and just picked the best offer on the day.

We achieved in the upper half of the range that was indicated by the EA and were able to pick from several offers.

I can see how you'd get into difficulty if you're routinely offering 10% below what is being asked, regardless of your list of reasons (my parents have tried this particular trick since time immemorial and it never made any sense to me, the valuation should reflect, well, the value!) I appreciate that there are some houses where it might work, we offered under on the flat by about 4%, but it had been languishing on the market for a year and was 'offers around', so an invitation to haggle.

robcyb

mayonnaise wrote: »

I would hold off for a while.



https://www.bloomberg.com/news/articles/2017-03-01/these-are-the-places-in-london-where-house-prices-are-falling

Central London and outer boroughs for now, but if we get a train-wreck Brexit (which is looking increasingly likely), your average 3 bedder in Stevenage will be back to 200k - or lower - before you know it.

We have been told be EAs that Stevenage is now 'sought after' by Londoners as the properties are 'cheap' in comparison - which would explain to an extent what you've mentioned. Our concern however is that this trend continues - even post-brexit. It's a catch-22 situation really. If house prices drop significantly enough, sellers are likely to not sell because of potential of negative equity - unless of course they are forced to (interest rate rises, etc.)

I guess the question is more along the lines of 'how long is a piece of string'.

robcyb

edinburgher wrote: »

My experience as a first time seller was that the EAs we spoke to offered a likely range of prices. We considered 2 seriously.

The first was ostensibly higher cost, a 'prestige' EA (you know, the sort that sell all the character properties and the expensive end of the market). They offered a range that was perhaps a little idealistic (sounds like the sort of firm advising the vendors of the houses you are looking at).

The second started out at about the same cost, but offered a more pessimistic/balanced opinion on what we would achieve for the flat. We soured on them as they were very motivated/pushy and because they started 'lowering' their fee structure but wanting a bump if they achieved £x, a price that looked pretty realistic (i.e. pretending to do us a favour).

We went with the first. It wasn't solely because they seemed to think that we would get more, but we did like their positivity. There is a lot of emotion when you're selling as well as buying and you want to achieve the best possible price that you can as a seller.

Granted, a slightly different story as we had always thought that we would go to a closing date and just picked the best offer on the day.

We achieved in the upper half of the range that was indicated by the EA and were able to pick from several offers.

I can see how you'd get into difficulty if you're routinely offering 10% below what is being asked, regardless of your list of reasons (my parents have tried this particular trick since time immemorial and it never made any sense to me, the valuation should reflect, well, the value!) I appreciate that there are some houses where it might work, we offered under on the flat by about 4%, but it had been languishing on the market for a year and was 'offers around', so an invitation to haggle.

It's great to hear views from 'the other side'. As you quite rightly stated, as a home owner you have a vested interest to get as much as you possibly can. After all, you've put yourself at a potential risk (in terms of investment) to buy, do-up and what have you with your property.

The issue we have however, is that in most cases we've looked into the historical data of sales (up until December 2016) and are aware that most of the properties have been marketed for 3+ months now. So do we:

• Wait, and risk prices rising?
• Put in our best offer and leave it on the table
• If we truly 'love' the property and see it as a house to life and not an investment - go all in?

I guess the same list of questions are going through sellers minds, as they also are seeking to purchase somewhere to move to?

robcyb

edinburgher wrote: »

I can see how you'd get into difficulty if you're routinely offering 10% below what is being asked, regardless of your list of reasons (my parents have tried this particular trick since time immemorial and it never made any sense to me, the valuation should reflect, well, the value!) I appreciate that there are some houses where it might work, we offered under on the flat by about 4%, but it had been languishing on the market for a year and was 'offers around', so an invitation to haggle.

Sorry - must have missed this. I agree with the sentiment behind this, however I would argue (to an extent) that the value of an object is almost certainly judged on its merits? Value can be a loose term, and is quite often dictated by trends (backed by real data) and with 'gut feel' of what someone feels is what that given thing is worth, or indeed what someone might be prepared to pay. I appreciate that EAs have been doing this for quite some time, but again the condition of many properties and the many variables that affect it's 'value' are quite varying and are sometimes not truly reflective.

We went with the 10% under not necessarily as a hard-and-fast rule, but because this was the normalised value that previous properties in the area had sold for (based on land registry data). We then subsequently improved offers up to 4% under asking, only to then be told no full asking only. With the properties having been on the market for 3+ months and having been told by the EAs that no offers were received to date that this was more or less an invitation to test the waters.

always_sunny

edinburgher wrote: »

I can see how you'd get into difficulty if you're routinely offering 10% below what is being asked, regardless of your list of reasons (my parents have tried this particular trick since time immemorial and it never made any sense to me, the valuation should reflect, well, the value!) I appreciate that there are some houses where it might work, we offered under on the flat by about 4%, but it had been languishing on the market for a year and was 'offers around', so an invitation to haggle.

That's the funny thing about house prices though, sellers seem to always think the price is fair whilst buyers believe it's inflated.

padington

mayonnaise wrote: »

I would hold off for a while.



https://www.bloomberg.com/news/articles/2017-03-01/these-are-the-places-in-london-where-house-prices-are-falling

Central London and outer boroughs for now, but if we get a train-wreck Brexit (which is looking increasingly likely), your average 3 bedder in Stevenage will be back to 200k - or lower - before you know it.

If Brexit goes hard, they will have to slash taxes and benefits and aim for a Singapore economy. If so family house prices in nice areas will boom but yeah before that happens there will be downward pressure. End of 2018 would be my time to look for a bargain but I wouldn't leave it much longer.

If on the other hand they try to go hard brexit and keep NHS and welfare state and European taxes, we're all doomed and 2017 might be a decade long top and beginning of terrible decline.

Soon people will be saying, apart from increased equity, paying for an NHS and welfare state, loyalty and security from 27 other countries and a liberal stabilising force, what did Europe ever do for us?

Conrad

robcyb wrote: »

I've been posting a lot on the forums recently due to the fact we're now in the position of buying our first house together. With years of hard graft and saving we're up to a point where we can finally put our first foot on the ladder (which seems to be getting away from us each month). Forgive me in advance if this seems like a rant, but I honestly wanted to open up the conversations to others to get a balanced opinion on the matters addressed, below.

Having spent 5 years saving, we've felt that our pot was never good enough to keep up with the rises in prices. In our local area (Stevenage, Hertfordshire) the house prices of an 'average' 3 bed terraced have rocketed from £200,000 to £300,000 within a 2 year period. As you can understand, savings simply cannot keep up with such unprecedented rises. Not that I have a sense or feeling of 'entitlement' to own a home (it's always been a distant dream since I was a child) but the whole concept of the nuclear family (2.x kids, a car, a house and a family) still resonates with me as a person; but long gone are those days! <ends on the sociological stance>

The million-dollar question for many people (including home owners, etc.) is when and indeed *if* the housing market is likely to crash again. As a potential buyer - we've been hoping for that for some time (obviously it has some impact on purchasing, as sellers will likely not sell) and at the same time, we're super keen to jump on the ladder before we jump into the bottomless fiery pit of not being able to buy (drastic, I know!).

Having put offers out on half-a-dozen or so properties over the last 3-4 months, we've been through quite the emotional roller-coaster. Many vendors have been told be estate agents that they can fetch a tidy amount for their properties, and yet data of previous sales are clearly below such numbers. When tendering an offer, we've typically started 10% below asking (which might be seen as cheeky) and clearly listed our reasons. We've then tendered improved offers that are closer to full asking and have been rejected again as the vendors have been 'promised' by the estate agents that they can fetch the inflated sum of money. As with any sale of good/services it's a game of tug-and-war between buyer and seller to find the acceptable price to agree on.

The issue I would like to have an open conversation around is where to find the 'right' stand-point as a buyer, and how the estate agents are obviously working to gain the market (as with any business!). I've had many conversations with the vendors prior to making the offers and they seemed positive - but after speaking to the estate agents the responses back were often met with frustration that a potential buyer should seek to find a better price.

I welcome all opinions - but please refrain from using colourful language .

So I've been helping people buy properties of all shape and size for over 2 decades and contributed to acres of forum comment, to include much on the housepricecrash forum between about 2004-2008.


One of my fave subjects is home buyer / seller psychology. (I'll deal with the crash topic in a further post)


Now I wont beat around the bush as it wont help you, so lets come to the point here; Estate Agents (I am not one) detest what they deem to be wasters / tyre kickers / messers. Nobody earns a penny from buyers that 'cannot perform' as we say in the business, and this non performance is often due to their dithering mind set.


There are plenty of straight forwards clients out there, the can-do positive, no quibbling, no messing, no pratting about with 'spread sheet' types.


These are clients for the 'hot box', those they want to call first and do deals with.


There is nothing worst than a' Malcolm' - the type that agonises over 'petty' things, that seems to know the square root of a tomato and come armed with spread sheets and past price Zoopla charts.


Put yourself in their position - they just want the easiest life possible, and thus not expending energy on time vampires and people that are clearly jumpy / anxious / fraught and uncertain as this buyer profile type is more likely to cause grief at some point. For example; If their no doubt extensive valuation mentions a few NORMAL issues such as lose roof tiles, this can send the Malcom's into meltdown, whereas other buyers just are less troubled by things and take them in their stride


You have to be eager and lo-maintenance, ready to pay full price (who cares about £10k in the context of a house of £300k which will be worth £600k in 10 years - you may care about every penny but others are more practical and sanguine and pay whatever it requires, so why waste time with a tyre kicker offer monkey putting in bids).

So I'm not saying don't put in an offer, but don't push it too far (unless its a buyers market - no chance of that in Hertfordshire ), but make your dealing process fast and keep it friendly.


Act like the typical Poles I meet - just be practical and brave, stop analysing everything and put down the past price comparison sheets THEY ARE UTTERLY IRRELEVANT - if someone is prepared to pay more than all the past price stats in the world make no difference

Conrad

WILL THERE BE A CRASH? >> highly unlikely.

I've written about the property market for years and years. This is because a British property price crash is usually accompanied by and shocking input such as the 1991 sudden huge hike in interest rates thanks to John Major (chief Remoaner) persuading the Govt to join the European Exchange Rate mechanism.


Or the 2007/8 credit crunch, predicted on the housepricecrash site well before - where the shocking input was the overnight ceasing up of the credit markets due to a massive failure in the way mortgages were sold and then sold onto investors.


I can see no such shocks on the horizon, and Brexit will if anything see prosperity accelerate.


BUT EVEN IF IT CRASHES, SO WHAT?
You need to understand most people do not lose their homes, less than 1% in fact over decades.


Who cares what the TEMPORARY value is?


Take a sanguine long term view and don't make money your God. Enjoy the property it isn't all about trying to market timing and profit




WARNING - I've been around the block and seen it all in terms of property. The more you delay then the more likely you delay your long term journey into prosperity.


You today feel you are facing a mountain but 20 years from now you will be well on your way property wise if you wish to be.


I found it very hard to buy in 1991 and when finally I did, interest rates shot up. I survived!