advice needed,offers rejected, are we expecting too much?

reformedEffortMaker_2

emmamac252-i would just be a little more patient...see what happens in the new year...what's the worst that could happen?
Granted there is great debate over whether prices will drop (and by how much), however one thing everyone is in agreement over, is that we certainly are not going to see a rise!...so what have you got to loose by waiting a little?

guppy

reformedEffortMaker wrote: »

I'm not being funny, but have you got any examples?

I'd love to see some examples too, Ed, I've seen thousands of sales over this period, but never seen evidence of properties rising in value.

How does that work in crash?

mr.broderick

EdInvestor wrote: »

That's simply not true.Some areas went up in price.The entire market didn't drop as much as 30% over 10 years.

I feel very sorry for novice FTBs being misled by people trying to talk the market down in this way.They will simply waste their time and get nowhere. Very few sellers are forced to move, so if they can't get what they want for their property, they will just stay put.

The max reduction you should expect is a few thousand pounds.

You obviously dont live in greater manchester ed.
House i was interested in reduced from £229000 to £189000 in 12 weeks?

EdInvestor

reformedEffortMaker wrote: »

I'm not being funny, but have you got any examples?

The better areas of central London for a start.Quality property in good areas generally maintained its value.

There will always be some types of property in some areas which will fall dramatically because of oversupply, poor construction etc in a downturn : the candidates this time seem to be new build apartments in the centre of provincial cities.The other area will be the lower end properties which go to buyers who need sub-prime mortgages.These loans have currently become unavailable. However, since other buyers will not be interested in these places, they probably won't sell even if the prices are cut or only at auction to developers: or the building companies will hide the price falls with their usual methods.

The whole market won't plummet.All property markets are local, all over the world.Don't be distracted by national figures, check what's happening in your local area. Quite a few areas have seen very little growth in prices since around 2004-05 anyway, so no reason to expect any falls in prices in those areas for a start.

Much of the growth in recent years has been in London, NI and Scotland.As long as City bonuses hold up, it's unlikely there will be a London crash and NI is still coming up from many years of undervalued property during the Troubles.Scotland prices are still growing.

Now that interest rates have clearly peaked, silly offers are likely to get even more short thrift as buyers will wait until rates are cut again and the sub prime mortgage scenario eases, rather than panic and sell at a cut price.They can't rely on their own vendor doing the same thing after all, so they could easily get squeezed in the middle if they sold too low..

guppy

EdInvestor wrote: »

The better areas of central London for a start.Quality property in good areas generally maintained its value.

I'm not talking about maintaining value, or falling at different rates...did any areas actually go up?

I can only assume you are talking about incredibly prime markets, maybe a handful of areas nationally? I've looked at evidence of all kinds of properties from the late 1980s onwards, from mansions to studios, and have never seen anything actually rise between 1989 and 1994.

Not doubting you, just interested to hear more

terrierlady

doing lots of part exchanges at the moment bears out the market as homes not selling as quickly as vendors wishing. the strange thing is most have been on the market and had no offers yet when we come in at a sensible price vendors always expect full price, when we try to explain that the average purchaser would make them an offer anyway they believe we are trying to steal their property....
developers are reducing their prices in line with market conditions (now is a good time to buy) and vendors should reduce, plus being a ftbyr you are walking gold dust.KEEP SEARCHING there is a home out their old or new with your name on it.;)

Ewarwoowar2

emmamc252 wrote: »

just wanted to say thanks to everyone for all of your replies. we do want a house to live in, not to sell on in a couple of years but we would also like to think we were getting value for money! i guess we just have to keep plodding on and trying, guess its just frustrating!!!! we have put the offers in very nicely and have explained our position is as good as anyone is going to get. guess its just a case of wait and see. the main one we like, the owners will be moving into their new home on the 13th that is ages away from the town we liv ein now so the house will be empty. houses that are empty never tend to sell as well, certinly not for a s high a price round our way so we are just keeping our fingers crossed that they might change their mind once they move away and they have the overheads of having two homes, one of which they aren't going to live in or even see!!! wish me luck!!!! sure i'll have more questions to ask soon enough!!!!

I'm in the same boat as you. If you're not desperate to move right away, I don't think there's anything wrong with putting in low offers. Someone said you need to justify your offer. I think that's nonsense. You offer what you can afford to pay or what you think the property is worth. An estate agent friend of mine told me to put in offers as low as 30% under the asking proce because nothing is shifting. Everyone knows that the market is on the way down, so there's a risk for people like us buying now.

When I put in a low offer, I make sure that offer is put to the person selling the house. I make sure they know it's what I'm willing to pay. Then it's up to the owner whether to accept the offer. It's no skin off my nose if they reject. House prices are falling, so is the interest rate and lots of new houses will come on the market in January.

I was in an estate agents last week. A couple came in to put their house on the market. The estate agent told them to wait until the new year because nothing was selling and they already had too much on their books.

seraphina

Please be patient! :j I know a few people who have put in low offers on houses recently to be told by the EAs to get lost. A few weeks later the EA has phoned them and asked whether they were still interested in proceeding with their original offers!

Keep saving during the meantime - that way you'll have a bigger deposit when you do come to buy - which should insulate you a little against any price rises, and if prices fall then you're quids in! The way the market sentiment (and lenders' borrowing criteria) are going, waiting a few weeks/months could save you thousands.

I read someplace that houseprices are only a matter of opinion - but the mortgage debt is real.
Good luck!

merlinthehappypig

EdInvestor wrote: »

That's simply not true.Some areas went up in price.The entire market didn't drop as much as 30% over 10 years.

I feel very sorry for novice FTBs being misled by people trying to talk the market down in this way.They will simply waste their time and get nowhere. Very few sellers are forced to move, so if they can't get what they want for their property, they will just stay put.

The max reduction you should expect is a few thousand pounds.

Sorry, I have to take issue with some of this.

Firstly, I have never purposely misled anyone in any of my posts. I try to give advice based on my own experience - I've bought and sold 7 houses in England and Scotland - and always try to show both sides of any argument, especially if it's a novice buyer asking. I can't always get it right, no-one can.

In this instance I simply don't agree with your conclusions and, like other posters since, would like to see some evidence to support what you say.

I based my post, and others, on evidence.

I have sales details and solicitors sales/purchase accounts showing that the house I sold in 1990 for £55000 was originally on at £85000, and that the house I bought for £70000 had been on at £125000 originally. This was in Worcester and Norfolk and equate to drops of just under 36% and 44%. I can't vouch for the rest of the country, but had lots of friends and colleagues who were in negative equity for years, particularly on new-builds where the price had been inflated to help with deposits and furniture.

Secondly, I have been looking at buying again for the last five months or so. Again I have evidence showing one house reducing from £649950 to £520000 and another from £649950 to £499950. That one has just sold and I won't know the final price until it goes through, but I doubt it was the full £499950. Another house we have viewed was on at £540000 and sold for £430000.

Equally, which is where the balanced bit comes in, I have posted details of other houses where the owners will only reduce £20000 on an asking price of £560000 and another reduced only £30000 from £495000.

As I have repeatedly said, there is no hard and fast rule for a reduction anyone can expect. It depends on how aggressively the house is priced and the owner's circumstances ie. do they have to sell.

Your suggestion that the most any FTB can expect to get off a house is a few thousand pounds is a sweeping generalisation and just as misleading IMO as anything you accuse others of.

The right advice for any FTB at the moment is to make absolutely certain that you can afford any commitment that you take on, allowing for changes in circumstances and allow for rises in interest rates. I got seriously ill within months of taking on a new mortgage and had to take medical retirement, not something that I had budgeted for, obviously, but I do now. Just because the BOE rate appears to have peaked doesn't mean that mortgage rates will neccessarily reduce across the board with the credit squeeze.

Equally FTB's should shop around. I'm not advocating silly offers, but 10-15% below asking price is not a silly offer. Yes, some sellers, perhaps most, will not accept this in the first instance, but you might get lucky. We have had three sellers refuse our initial offer and give us the lowest price that they will take, yet come back to us within a week or two with a reduced price. In one instance they kept reducing the price so much that the eventual selling price was actually £45000 below our original offer, which we made before the Northern Rock problems and the negative media reporting.

Equally if a FTB finds a house that they consider to be a reasonable price which they can comfortably afford then go for it. A house is supposed to be a home anyway, not an investment.

EdInvestor

chriseast wrote: »

Equally FTB's should shop around. I'm not advocating silly offers, but 10-15% below asking price is not a silly offer.

I would suggest it is a silly offer. Take the last crash in the early 90s. In the country as a whole the market peaked at the end of 1989 and bottomed out at the end of 1992.Prices fell by an average of 17% over the whole three year period..So a price fall of 15% would account for the entire fall of the last crash overnight.

Sorry, in most cases, that's silly.

To be sure this average masked very wide differences between regions and types of property.For instance in the Northwest, last time, the market peaked in late 1991 and bottomed out four years later with an average drop of 12% over the whole period. I would suggest that most people in those parts would barely have noticed any change in the value of their property over the period.3% a year is just noise and many would have seen prices rise in such conditions.

In London, the market peaked early in 1989, and bottomed out more nearly 4 years later with an overall price fall of 32% - almost double the national average ( you may feel that given the media, being London based, might tend to exaggerate a little based on its own experience which is not however typical.) .But even with this large fall there were some (better) areas where prices rose over the period - and also some where the fall was considerably more than 34%

All property markets are local

http://www.nationwide.co.uk/hpi/?source=nationwide&campaign=homepage&execution=hpi_lhs_29102007

The figures are here: click on Data download.

Do be aware that your area may have changed character over the past 20 years - new build flats in an area of oversupply, areas that are recently gentrified but not yet really upmarket, with poor local salaries, along with poorer quality property will tend to fall more in crash conditions.

That's assuming there is a crash. IMHO we will just have a temporary pause in growth, much like 2004-05, mainly to enable a fall in interest rates and some salary increases to restore affordability at the bottom end.

.