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

EdInvestor

Nenen wrote: »

Ed you are obviously a long-standing MSEer who has helped a great number of people (judging by your number of posts and thanks) so I'm loathe to start an argument. However, I'm perplexed as to where you are getting your 'facts' from, e.g. your statement that "40% of owner occupiers own outright with no mortgage".

Terribly sorry, I was wrong.The figure's gone up, it's now 44% who own their homes outright. obviously plenty of 'mortgage free wannabees' out there.

http://www.timesonline.co.uk/tol/news/politics/article1567419.ece

the whole Northern Rock debarcle was caused to a great extent by sub-prime lending...

No it wasn't.Most of NRK's mortgage lending is top level prime and had been securitised.The Bank ran into trouble because it was financing the rest of its lending through the money markets instead of customer deposits and found it couldn't get the money because banks stopped lending to each other, causing the credit crunch.

EdInvestor

dolce_vita wrote: »

Ed-

I have read many of your posts on the "savings & investments" board and have admired your stance against IFAs and the like and your advice is often well-informed and accurate.

Actually I don't have an anti-IFA stance.Rather I seek to correct misleading information so posters can make their own minds about investing.

I would stick to that board if I were you because, with all due respect, some of your comments on this board show that you know jack !!!!!! about the property market and I'd hate to see you lose your good reputation.

Normally I don't bother with these threads because they are usually full of boring rants by people who are jealous of others who have made money out of property, or are trying to short the market (and not of course succeeding, despite years of trying.)

However I see that there is even more incorrect information around here at present than usual, and some novice homebuyers may be confused.So when I have time I will try to input some factual information so that these inexperienced people won't be led down the garden path by people with a hidden agenda not in their best interests.

pamaris

Hello OP, I won't get into the current squabble going on with Edinvestor... Just wanted to say I am a chain free buyer and when I start looking, I will be putting in low offers. I will be looking in late summer; by then I expect that asking prices will have fallen about 7-10%. Then I will offer 80-90% of that. Wages and house prices have to meet sometime. Just hold tight and be patient.

In April, there will be a glut of flats, and 2 and 3 BR terraces as BTLs try and cash in under the new CGT rules. In Jan/ Feb there will be a glut as people who have held off marketing at Christmastime come on the market. This month, there will be a glut of flats as people put their properties on to beat the final HIPS deadline. I expect that by late spring, there is going to be a ton of supply and very little demand.

carolt

EdInvestor, I don't think telling potential FTB's to be cautious before leaping into a property market tipped to fall by up to 40% by everyone from the IMF to any national newspaper you would like to name, is really such radical advice. Not everyone can be bothered to read the financial news or understands it if they do, whilst years of property !!!!!! shows have rammed home the message that property prices only ever rise.... These are precisely the pople who would be the first and hardest hit by ANY falls in house prices.

Agreed, for those of my parents' generation who own outright, as a home not an investment, it makes little difference what prices do (except for those planning to sell up and retire/pay care home fees on the proceeds) - but these are not usually the people posting for advice on this particular board. This thread, you may (not) have noticed, was concerning what action a potential FTB (ie someone with no equity to shield them, just to state the bleeding obvious) should take. These are not people who can afford to take the risk of prices going down. Of course, it's always possible that prices will continue rising (we live in a strange world). But it's highly unlikely.

I also find your total lack of evidence for price rises in the last crash somewhat unconvincing, to put it mildly. I come from London, and remember the last crash only too well - do you? Some examples of 'prime' addresses where property could be picked up for a song in the early-mid 90's I recall - Hammersmith (1 bed flat, 40K), Camden (range of 2 bed flats, 65-70K), Belsize Park (2 bed, 80K), Kensington (2 bed flat, max 100K), Wimbledon (4 bed Victorian house, 2 mins Wimbledon Station, 150K) - need I go on? These are all real houses and real selling prices - none of them ex-council. All had been priced substantially higher a few years earlier.

The fact that these prices have quadrupled or more since then is not an argument that prices can only ever go upwards. On the contrary, as you yourself point out, London prices fell the furthest as they had gone up the most.

Also, I'm not familiar with the North East, but few can forget the sale of streets of houses for next to nothing - a few thousand? - a few years ago, as some houses up there became effectively worthless (not just worth less).

And the North West, which I know better, certainly saw substantial falls.

So evidence please.....

emmamc252

didn't mean to cause such a fuss!!! oh dear!!! we went round the house in question again yestaday with my boyfriends grandfather who used to be a surveyor and as such he pointed out about ten different things that we hadn't noticed including a big old crack on the outside wall. he said he thinks 210 is a very fair offer and that if he had seen it with us first he would have said 208 as a limit. we went round with a view of putting in a higher offer, i'm just waiting for the agents to phone and i'm going to tell them we think 210 is a very fair offer, and if the vendors aren't willing to accept that within 24hours then we will be putting in offers elsewhere, and we genuinley will be. i know they have sold before and obviously someone was willing to pay more, but for us and for right now we think that we have given them a good offer, if they don't like it thats fine, but i hope they don't live to regret it. its a 9ish percent drop in a market thats suppose to drop by 10percent anyway, and this is with a first time buyer. at first i was so wanting to get the house, now i still really like it but i'm so not willing to overpay, we are the ones in the good position, theres lots more houses but will they get lots more potential buyers? feel loads better and a lot stronger and more empowered!!!! thanks again to everyone, i'm really shocked that i got so many responses!!!

Nicki

Whilst you are in a good position, in that you are not in a chain, don't let this blind you into thinking that you will be the only potential purchasers in this position, or that you are in the strongest position possible (which is a 100% cash buyer)

We sold our house recently, and just about everyone who walked through the door said they were not in a chain, either because they had sold already and were currently renting, or because they were going to let out the property they were currently living in (and this was a £600k house not a typical FTB property). This meant that the apparent strength of their positions did not in fact give any of those interested the commercial advantage they thought.

There is another thread around at the moment, asking those who have recently bought and sold what percentage of asking price they paid. Obviously its not a scientific exercise, but very few of the respondents have bought or sold for less than 90% of the original asking price.

You need to offer what you think is a fair price for the property you want to buy IMHO and not get too hung up on how strong your negotiating position is. At the end of the day its only a strong position if you can actually persuade someone to accept an offer that you want to make. If you constantly pitch your offers too low and never get one accepted, the fact that you are a wannabe FTB has not done you much good!

Magentasue

I agree with Nicki on this. I'd rather have a cash buyer than a FTB.

emmamc252

i agree with what you are saying, in my case we took round my partners grandfather who is a surveyor and he said that in his opinion the offer of 210 was about right for any buyer to be putting in, he felt that the property had been slightly over valued, and that given our situation he didn't think that we needed to be overpaying for a house. as a lot of people have said, sellers are less willing to negotiate if the property is already priced well, however in the same train of thought, if sellers are expecting a higher value for their property then i think it is only right that as buyers we expect them to be realistic about what price they can eventually achieve. if i thought the house was worth more i would probably put in a higher offer, but after advice that i trust saying its worth about 210, i'm not going to anymore.

EdInvestor

...its a 9ish percent drop in a market thats suppose to drop by 10percent anyway...!!/quote]

This is the kind of nonsense that misleads FTBs.Housing markets take YEARS to drop by a double digit amount.Currently the market is rising by around 7%, not dropping.

During the last crash, the total fall from peak to trough was only 17% and that took more than three years.The property market is not like the stockmarket.It moves very slowly indeed - prices have still not gone into negative territory yet in the US for instance.As for people who talk about falls of 30 or 40% , this is complete and utter rubbish.

boinging_2

EdInvestor wrote: »

...its a 9ish percent drop in a market thats suppose to drop by 10percent anyway...!!/quote]

This is the kind of nonsense that misleads FTBs.Housing markets take YEARS to drop by a double digit amount.Currently the market is rising by around 7%, not dropping.

During the last crash, the total fall from peak to trough was only 17% and that took more than three years.The property market is not like the stockmarket.It moves very slowly indeed - prices have still not gone into negative territory yet in the US for instance.As for people who talk about falls of 30 or 40% , this is complete and utter rubbish.

Talk about misleading LOL! The property market is not rising by 7%, it's falling at roughly 1% per month. You are looking at the YoY position, which is actually of no concern for someone looking to buy today (as the OP is).

If a house goes on the market today, at current trends it will be worth 1% less next month - how is that a 7% rise?

Are you the holder of a crystal ball? How can you say what % house will fall? If they are going down 1% per month at the start of a downward turn (with still plenty more credit crunching to come), it would only take 12 months at 2% decrease for over a 20% fall YoY (which as I've already said is not the best way to look at things...)