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

merlinthehappypig

If the price being asked is reasonable and a fair reflection of the value of the property (whatever that is in the current market) then I agree that obtaining 10-15% off is unlikely. However I think the point is that many houses, particularly ones that have been on since spring/early summer are simply on at a speculative and unreasonable price.

Therefore the 10-15% is off a price that wasn't realistic in the first place. If a house has gone up for sale more recently, and the agents have priced it according to the changed market conditions, then of course 10-15% lower is unreasonable to expect, unless the sellers are desperate (and many new build amateur BTL seller are).

All three houses I used as an illustration had been on since early this year. The asking prices were clearly unreasonable and all three fell by 20% or more before selling.

As a potential buyer, most agents I have been dealing with across a wide area (Somerset, Devon, Cornwall and Herefordshire) have told me that they expect sellers whose house has been on since June/July or earlier to have to reduce 10-15% to sell and to pitch offers on this basis.

EdInvestor

chriseast wrote: »

However I think the point is that many houses, particularly ones that have been on since spring/early summer are simply on at a speculative and unreasonable price. Therefore the 10-15% is off a price that wasn't realistic in the first place.

But prices are still rising at 7% year on year.

If a property is overpriced by comparison with its peers, of course this needs pointing out to the agent and a lower offer is quite appropriate: but that's the case whatever the state of the market.

If a house has gone up for sale more recently, and the agents have priced it according to the changed market conditions, then of course 10-15% lower is unreasonable to expect, unless the sellers are desperate (and many new build amateur BTL seller are).

You would expect a property owned by a desperate seller would be priced to sell ( ie cheap) and thus the vendor should achieve the asking price.

merlinthehappypig

EdInvestor wrote: »

But prices are still rising at 7% year on year.quote]

I'm sorry, I was prepared to give your opinions the benefit of the doubt, but that statement shows that you simply don't understand HPI at all.

Prices have risen, on average, approximately 7% between November 2006 and 2007, reducing from approximately 8% between October 2006 and October 2007. This doesn't mean that they are rising more slowly, it means that they are falling. If you take the Halifax's reported figures just published prices fell by 1.1% last month. Even the most optimistic figures show that prices have fallen for three months in a row.

In what world does that equate to 'prices are still rising at 7% year on year'?

I agree that if I bought in November 2006 and sold in November 2007 I would have made 7% (less legal costs and stamp duty etc), but if I bought now and prices continue to fall at the same rate my house would be worth 1.1% less in a months time.

And you accuse me of misleading FTB's?

boinging_2

Chriseast - You are one of the few sane voices on these message boards... I'm amazed by some of the "advice" given by others on here.

House prices are falling, I have seen houses reduced by 5-15% here in Cotswolds which has always had a rising market (due to a lot of 2nd homes) and I'm not talking about new build flats (there are very few about this area!).

Keep up your sensible posts.

Nenen

chriseast wrote: »

EdInvestor wrote: »

But prices are still rising at 7% year on year.quote]

EdInvestor wrote: »

I'm sorry, I was prepared to give your opinions the benefit of the doubt, but that statement shows that you simply don't understand HPI at all.

Prices have risen, on average, approximately 7% between November 2006 and 2007, reducing from approximately 8% between October 2006 and October 2007. This doesn't mean that they are rising more slowly, it means that they are falling. If you take the Halifax's reported figures just published prices fell by 1.1% last month. Even the most optimistic figures show that prices have fallen for three months in a row.

In what world does that equate to 'prices are still rising at 7% year on year'?

I agree that if I bought in November 2006 and sold in November 2007 I would have made 7% (less legal costs and stamp duty etc), but if I bought now and prices continue to fall at the same rate my house would be worth 1.1% less in a months time.

I couldn't agree more with Boinging re your sense Chriseast! You've given me a great deal of help and sensible advice. :beer:

The problem with statistics for many posters (inclusing edinvestor) is that they can so easily be manipulated to mislead anyone who isn't thoroughly mathematically savvy (and even some who are)! As I'm sure many people realise (but EAs and others with vested interest etc don't make clear), the annual change is unlikely to show a negative for a few months yet as the positive gains in HPI for the beginning of the year are still outweighing the last three months of price drops. I guess it will be about February next year when the annual change starts to show negative and September 2008 when we will see what a whole year of (hopefully) monthly drops will add up to!

guppy

Interesting post, Ed. But still want to hear about these properties that rose in value during the last crash...:) Any chance of humouring me?

reformedEffortMaker_2

EdInvestor wrote: »

That's simply not true.Some areas went up in price.

I too am keen to know where these 'areas' were.....

Ewarwoowar2

On a slightly different note, an estate agent told me that other EA's in the area put houses on at 10-20% above the market value. The when the house hasn't sold for a few months they advise the seller to reduce the price. He told me they do this as it allows them to claim comission at the original higher price.

Not sure if it's true.

guppy

Ewarwoowar2 wrote: »

He told me they do this as it allows them to claim comission at the original higher price.

Not sure if it's true.

I don't think that is true. Commission, is just that, a percentage of the price acheived. But it does help them suck in business from greedy vendors, if you get three agent's "valuations", few people will take the lowest.

[Deleted User]

OP don`t assume that prices are falling in all areas. Prices are static in my area but nevertheless houses are selling, albeit slowly. February will bring the buyers back as they scramble to get into the catchment area of the good local comp

I have to add that any sensible seller will have their property on the market at the lower end of valuations anyway, so of course an unrealistic offer will be rejected, especially if only marketed since october