Agents' Tactics...

tcall

I was supposed to view a property last Wednesday. It is just about the cheapest property on the market in the area at £125k. It only came on to the market on Tuesday morning but I got a call from the agent on Tuesday afternoon saying they couldnt find the keys so would have to postpone the viewing.
The property then appeared in the property section of the local paper on Thursday, meaning everyone and their dog knew about it by then.
By Friday I still hadn't had a call back so I went to the agent's office and lo and behold, they are doing block viewings next Tuesday. So now I'm going from being the first person to see the property, to being one of many seeing it within a couple of hours.
Does this appear to be tactics by the agent to not let someone view the property until loads of people are interested in it and initiate a bidding war?
Has anyone else suffered this kind of problem?

theGrinch

unlucky. yes I have seen this happening with and without auction lots. sometimes usually it happens for properties in poor condition where a mortgage is doubtful. other times if the agent is situated a fair distance away so a block viewing is easier and finally if the agent expects high demand.

the one i saw recently was on market for £140k (2 bed house stratford), after about £20k of work worth £180k. agent expected it to sell for £133k. then some local guy who wanted to it for BTL offered £168k and blew competition away.

meanmachine_2

A bidding war for an overpriced flat.

Jeez.

In a few months' time they won't be able to give them away.

And if a BTL "investor" paid over the odds for it, then more fool them.

There really is one born every minute.

ManAtHome

tcall wrote:

Does this appear to be tactics by the agent to not let someone view the property until loads of people are interested in it and initiate a bidding war?

More likely to be a problem with EA doing 6 viewings in one - just as much likelyhood of a sale and a lot less work. Happenend a lot in the late eighties, by the mid 90s they'd turn out on a Sunday....

theGrinch

meanmachine, whether the BTL investor paid too much is moot as neither of us know his thinking and strategy. if he has purchased it for long term investment >10 years then more than likely he will be fine.

meanmachine_2

theGrinch wrote:

meanmachine, whether the BTL investor paid too much is moot as neither of us know his thinking and strategy. if he has purchased it for long term investment >10 years then more than likely he will be fine.

Any BTLer buying up new property today needs their head examined.

As articles on the motley fool etc keep pointing out, you're much better off putting the money in a high interest account.

Seriously, if someone has bought in the current climate, then they must be mad. Or stupid. And paying well over market value is already the first indication that this person's grasp of economics is somewhat shaky. Wouldn't you agree?

Current rental yields with voids is estimated to be around 0.8%, not forgetting all the hassle of finding and keeping tenants.

These people are speculators desperately hoping that the property will go up in value well beyond 5% y-o-y.

As we all know house prices in the last 50 years have increased annually by a staggering....2.5%.

Muppets.

deemy2004

I think it is great that the BTL fanatics are like suicide bombers buying up property at the peak ..... the greater the dash for the exit and the larger and longer the overhang of supply over the market will be leading to a much sharper and protracted decline than would otherwise have occured.

Can't wait for the BTL sob stories.....

I can see it now.... Demo's outside Westminister to help support the BTL investors who have lost money...
Gorden Brown promising tax cutting packages to BTL's to partly offset losses, so as to try and support a falling housing market - but it won't work !

meanmachine_2

Oh God yes, I can see it now - Tonight With Trevor Macdonald and the BTL scandal.

Wah wah, I was "missold" my BTL mortgage. I was told that house prices only ever go up. Oh poor me. I blame the government. It's their fault that house prices are crashing. Wah wah I need compensation or my little ones will starve.

I wonder whether Beachy Head will be renamed BTL-chy Head.

Lemoncurd

meanmachine wrote:

Oh God yes, I can see it now - Tonight With Trevor Macdonald and the BTL scandal.

Wah wah, I was "missold" my BTL mortgage. I was told that house prices only ever go up. Oh poor me. I blame the government. It's their fault that house prices are crashing. Wah wah I need compensation or my little ones will starve.

I wonder whether Beachy Head will be renamed BTL-chy Head.

We spoke to a mortgage advisor a couple of months ago and he suggested that as we had a large deposit and no problems with affordability why didnt we use half of it to buy a BTL. It turned out he wasn't joking and he really couldn't understand why I was laughing at him.

ManAtHome

theGrinch wrote:

meanmachine, whether the BTL investor paid too much is moot as neither of us know his thinking and strategy. if he has purchased it for long term investment >10 years then more than likely he will be fine.

A reasonable point - if he's doing it as a business, quite likely to worked out all the cashflow stuff. If it's a 'I've seen people doing this on the telly', may well come a cropper.

I heard a radio discussion around a year ago - one guy was still buying, but the criteria he used to value a property was to multiply the monthly rent by 100 (12% ROI). His point was that if you're only just covering normal costs, you're less likely to be able/want to keep the property up to standard for your tenants and less likely to have the cashflow to cover voids or unplanned costs.

theGrinch

meanmachine wrote:

Any BTLer buying up new property today needs their head examined.

As articles on the motley fool etc keep pointing out, you're much better off putting the money in a high interest account.

Seriously, if someone has bought in the current climate, then they must be mad. Or stupid. And paying well over market value is already the first indication that this person's grasp of economics is somewhat shaky. Wouldn't you agree?

Current rental yields with voids is estimated to be around 0.8%, not forgetting all the hassle of finding and keeping tenants.

These people are speculators desperately hoping that the property will go up in value well beyond 5% y-o-y.

As we all know house prices in the last 50 years have increased annually by a staggering....2.5%.

Muppets.

actually its 2.5% in real terms (barker report 2004), which is a better return than most investments (including the bank, stocks and shares) apart from art and wine! so historically in terms of capital growth over the medium and long term there is something in it.

no I wouldnt agree with you as each purchase has a certain set of circumstances which you would be unwise to judge. You dont know the buying price, the market value, the rental, whether or not they have tenants lined up, the local economy. you may talk in averages, but this is folly to generalise. I know I case of someone that purchased 10% BMV and is getting an 8% guaranteed rent (no fees) for the next 3 years let to a university that has just opened a department building in that town. is that person unwise?

just as there are different job markets in the uk, there are different housing markets and rental markets. the key is to know the one you wish to enter or exit.

you may take a pessimistic view, but obviously those that do undertake BTL (I am not one at present) choose to take a different view. its up to them and I really dont care either way.