Unrealistic asking price?

AnotherJoe

MortgageDonkey wrote: »

Hi All,

Currently looking for a new house and we've found one we are interested in, but some of the numbers don't seem to be stacking up. Would be good to get any thoughts.

Previously on market for - never sold
13th Jun 2009: £285,000!-!5 bed detached house - Bramleys
20th Nov 2010: £268,000!-!5 bed property -!iSold
9th Nov 2011: £268,000!-!5 bed property - unknown agent
current listing: £325,000 guide price - Purple Bricks

The house hasn't had any major changes, just seem to be cosmetic decoration. The numbers suggest they have an unrealistic asking price and we are considering a substantially lower offer
They dont suggest anything of the sort. All that counts is what similar houses are selling for right now
By all means, if similar houses are selling for £268k, offer in that region. If they are selling for (say) £320k then an offer of (say) £270k will be laughed at.


Am I correct in thinking house prices are currently similar to 2011
The house is in West Yorkshire

Thanks for reading

Why go back only to 20011? Why not 1959 and offer em £500 and a hobnob?
Its worth what similar houses in the area are selling for, its previous prices are irrelevant.

System

verybigchris wrote: »

IME every house listed through Purplebricks is somewhat over-priced. PB get paid whether the house sells or not, so they overvalue to get the business and then don't care if the house sits there unsold.

You mean PB over-values its listings even more than over-valuations made by regular estate agents? A PB over-valuation is more than 'somewhat' over-valued then.

PasturesNew

The trouble at the moment is if an agent says "We sold your neighbour's house for £300k 3 years ago", people will automatically bung a bit more on and ask £350k, just because 3 years have passed.

If the agent says "It might make £300k now" the seller will often still say "let's try £350k, eh".... and the agent doesn't want to turn the business down because their competitor might just sign them up instead.

As an agent, you don't need to be selling all the houses you've got on your books, you also need to prevent other local agents from having houses on their books.

The agent that didn't sign them up at £350k would be told off by their Manager "I know they won't get £350k, but we don't want Bob's Gaffs down the road signing them up".....

When you buy, it's not like a shop, there's a lot of inter-agency fighting to get the sign ups.

If you can sign up every house in the town at £350k and put your competitor out of business as they have 0 houses to sell .... that's a win.

The trouble is, once any agent has agreed a daft price... it's what the seller then expects/believes is genuinely achievable for their 'palace' (that's the grotty/dated/damp/squalid hole you can see in the photos).

System

PasturesNew wrote: »

The trouble at the moment is if an agent says "We sold your neighbour's house for £300k 3 years ago", people will automatically bung a bit more on and ask £350k, just because 3 years have passed.

If the agent says "It might make £300k now" the seller will often still say "let's try £350k, eh".... and the agent doesn't want to turn the business down because their competitor might just sign them up instead.

As an agent, you don't need to be selling all the houses you've got on your books, you also need to prevent other local agents from having houses on their books.

The agent that didn't sign them up at £350k would be told off by their Manager "I know they won't get £350k, but we don't want Bob's Gaffs down the road signing them up".....

When you buy, it's not like a shop, there's a lot of inter-agency fighting to get the sign ups.

If you can sign up every house in the town at £350k and put your competitor out of business as they have 0 houses to sell .... that's a win.

The trouble is, once any agent has agreed a daft price... it's what the seller then expects/believes is genuinely achievable for their 'palace' (that's the grotty/dated/damp/squalid hole you can see in the photos).

+1 I absolutely agree.

westernpromise

Diocletian_II wrote: »

I have read that historically these situations usually result in general price falls, rather than the opposite.

I haven't read that, but it figures.

Among sellers, there will be some who needn't sell; and among buyers likewise some who needn't buy. There will however be some sellers who absolutely do have to sell: divorce, probate, repossession. It's hard to think of equivalent circumstances that create buyers who absolutely have to buy.

So the sellers and buyers who needn't transact don't, cancelling each other out. This leaves the sellers who have to sell talking to buyers who needn't buy. The one who has to give ground is clearly going to be the seller.

System

westernpromise wrote: »

I haven't read that, but it figures.

I read it is a recognised economic phenomenon, and has even been given a name by some housing economist. I am pretty sure this stage of the cycle is called a ‘sellers strike’, where sellers refuse to accept a fall in values, and often withdraw properties from the market ‘until things pick up’. It results in a 'buyers strike', which is accompanied by a fall in prices.

AdrianC

AnotherJoe wrote: »

Why go back only to 20011? Why not 1959 and offer em £500 and a hobnob?

Because hobnobs weren't around in 1959.

julicorn

2011 is hardly an ideal comparison point. Our flat went up in value from £165k (2011) to £270k (2017). Hard to argue then that it's worth less just because it was sold for less in 2011, when everything comparable in 2017 went for £270k or even more.

MobileSaver

Diocletian_II wrote: »

It is therefore a big risk whether you would make you money back if you bought that house but then had to sell it again for some unexpected reason.

If you spend your life worrying about what might happen tomorrow then you're going to have a very unhappy life. Just look at Crashy Time who has spent the last 15 to 20 years paying off his landlords' mortgages instead of his own because he was convinced house prices were about to crash; he could have owned his own home outright by now instead of living in a bedsit in an undesirable part of Edinburgh.

As people typically spend over 20 years in a property the number who buy and then have to sell immediately must be absolutely tiny. Basing your purchasing decision on such a tiny risk would be foolish.

Diocletian_II wrote: »

often withdraw properties from the market ‘until things pick up’. It results in a 'buyers strike', which is accompanied by a fall in prices.

Which doesn't bother the sellers in the slightest as by your own admission they've removed their properties from the market "until things pick up." And all this time buyers/renters are left with the choice of either buying just the dregs still available or continuing to pay their landlord's mortgage until a decent house becomes available.

As ever trying to time the market is a mug's game and, for the vast majority of people, buying when you need to is historically the right decision and 20 years on when you want to move you'll wonder what all the fuss was 20 years earlier.

Thrugelmir

MortgageDonkey wrote: »

we are considering a substantially lower offer

Then don't be surprised if your offer is rejected.