House Price Rise Discussion Thread

Romani_Ite_Domum

MissMoneypenny wrote: »

What someone is prepared to pay for it:rotfl:

Damn you missmoneypenny you're right :rotfl:

Guy_Montag

Romani_Ite_Domum wrote: »

This is also debateable. It could be worth what someone is willing pay for it at the point of sale. After that it's only worth what someone else is prepared to pay for it.

E.g a house for sale and after 3 months goes to sealed bids. 10 people put in offers, 9 offer £100K and one offers £150K. Sale completes at £150K. How much is the house now worth?

Yes, interesting. So when the new owner dies in a bizarre gardening accident three days after completion, & the house is sold again by closed bids there are now 9 people who all bid £100k the last time, but saw that it sold for £150k. Do they use that as their yardstick or bid what they bid the last time. This is, of course, especially pertinent in Scotland.

IveSeenTheLight

Guy_Montag wrote: »

Yes, interesting. So when the new owner dies in a bizarre gardening accident three days after completion, & the house is sold again by closed bids there are now 9 people who all bid £100k the last time, but saw that it sold for £150k. Do they use that as their yardstick or bid what they bid the last time. This is, of course, especially pertinent in Scotland.

Generally, in Scotland, they would use the last sale price as a yard stick, however you should also take into account the time since the last house sale, the condition of the property (as usually it will be a different property you are bidding on), what the houseing market is currently and any other information which is significant

Romani_Ite_Domum

Guy_Montag wrote: »

Yes, interesting. So when the new owner dies in a bizarre gardening accident three days after completion, & the house is sold again by closed bids there are now 9 people who all bid £100k the last time, but saw that it sold for £150k. Do they use that as their yardstick or bid what they bid the last time. This is, of course, especially pertinent in Scotland.

Gardens can be dangerous places when you're unfamiliar with them!

This is the EAs philosophy? A property sold for x therefore a similar property is worth x so we will market at x+. Buyers also get anchored that a property must be worth x as they see it sold.

Of course it does come down to afforabilty if the 9 who bid last time, only had a budget of £100K then you must not only be willing but also be able.

franklee

MissMoneypenny wrote: »

What someone is prepared to pay for it:rotfl:

I find that strange. Surely it is possible for a buyer to get carried away and pay too much Just because one buyer is prepared to pay that much doesn't actually mean the house is worth that much.

Conversely it's also possible to get a bargain if the seller is in a hurry to sell he may let it go at a discount. In this case the house is arguably worth more.

So I don't think the house is now worth what someone is prepared to pay for it as that would require all buyers to be knowledgeable, rational and without different demands for speed of sale. Who knows the buyer may be a fool and his lender irresponsible.

SquatNow

Guy_Montag wrote: »

Yes, interesting. So when the new owner dies in a bizarre gardening accident three days after completion, & the house is sold again by closed bids there are now 9 people who all bid £100k the last time, but saw that it sold for £150k. Do they use that as their yardstick or bid what they bid the last time. This is, of course, especially pertinent in Scotland.

They will bid whatever the house is worth to them. To some of the bidders it maye be worth £100k, to others £120k. Some muppet may even believe it is worth £150k.

Essentially a large part of the value/worth of a property is due to it's utility... essentially, how much money you can make using the property either by living in it, working in it, or renting it out. (Or from appreciation.... HPI)

Thus a 3 bed semi may be £400k in london, and £40k in Hull. The house could be identical, on an identical plot with identical decoaration. But in London wages are higher, so you can make more money by living in that house than the house in Hull, where everyone is on the dole. :rotfl:

Incidently, the concept of sealed bids is basically a scam to make people overpay on properties... it should be an public bidding contest with details of all bids visible online. TBH if you did this you could do away with estate agents all together... essentially all you need is a central property auction with reserve prices set by the sellers, and people to write the descriptions. The internet made Estate Agents obselete.

HugoSP

I know that one does not make a trend but when was there last a post about Gazumping on here?

http://forums.moneysavingexpert.com/showthread.html?t=579673

I'm not saying that just because of this house prices are on the increase again - I for one don't think they are, even though I'd like to believe differently. but my view is that one post on here about any subject may represent hundreds if not thousands of people affected country wide.

Having said that we were gazumped in 1994. Soon after house prices were on the increase. So why did this happen to the poster?

We know that from the thread, 2 people were in a position to, and wanted to, buy the house, and fully intended to proceed with the purchase.

Either the house was well priced, below others of the same type or the market was healthy in that area. In my experience those sellers who encourage gazumping don't tend to want to discount their houses, they are normally greedy individuals who will change alleagances over an extra few grand.

Our experience was a little different. The seller had signed a sole agency agreement with their agent and hadn't read the small print carefully. The would be sale to us was private, the sellers were bullied into dealing with a buyer introduced by the agent. Having said that gazumping was pretty unusual of in 94 but was on the increase nevertheless. The basic rule was met, in that 2 people wanted the house.

So what does this mean? Is this a one off, a feature of houses being more reasonably priced, steady interest rates or longer term optimism?

m00m00

for every thread we have on gazumping, we have more than 10 on 'why can't I sell my house', with the usual obvious answer.

HugoSP

m00m00 wrote: »

for every thread we have on gazumping, we have more than 10 on 'why can't I sell my house', with the usual obvious answer.

and that answer is that it's overpriced.

But why is it overpriced?

Houseprice fall?
Over optimistic agent?
Poorly presented house?
Lazy agent won't push it?
Sale keeps snagging on rights of way etc?
etc etc etc

There are always people who cant sell their house in ANY market. Some of the above will apply to them

Doozergirl

Guy_Montag wrote: »

Yes, interesting. So when the new owner dies in a bizarre gardening accident three days after completion, & the house is sold again by closed bids there are now 9 people who all bid £100k the last time, but saw that it sold for £150k. Do they use that as their yardstick or bid what they bid the last time. This is, of course, especially pertinent in Scotland.

That's easy. You just keep bidding £100k until the last bit of competition dies in yet another unfortunate gardening accident.