Property ‘undervalued’ by 15k... is it fair to ask to meet in the middle?

Crashy_Time

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

Mickey666

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

Crashy_Time

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

Getting_greyer

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

Genuine question, where do you see these rises in mortgage rates.  I know they're higher compared to this 12-15 month ago but now?  

Mickey666

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

I'm not so sure.  I've had mortgages with interest rates up to 15% (briefly), though mostly in the 8-12% region.  I didn't notice it stifling the housing market then and I'm not convinced it would do so again.

Sure, higher interest rates will mean higher mortgage payments but they do nothing to stem the demand for houses because people will still need somewhere to live.  So all that will happen is that people will have to spend more on their mortgage (or rent) and be forced to cut back on other spending that is not so essential.

jimbog

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

Sure, higher interest rates will mean higher mortgage payments 

Lenders have 'stress tested' borrowers to cover that eventuality

Crashy_Time

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

I'm not so sure.  I've had mortgages with interest rates up to 15% (briefly), though mostly in the 8-12% region.  I didn't notice it stifling the housing market then and I'm not convinced it would do so again.

Sure, higher interest rates will mean higher mortgage payments but they do nothing to stem the demand for houses because people will still need somewhere to live.  So all that will happen is that people will have to spend more on their mortgage (or rent) and be forced to cut back on other spending that is not so essential.

Which just means the economy collapses (again) and more people can`t pay their (higher) mortgage. Would you class the late 80`s property price collapse and resulting negative equity nightmare as a "stifled" market? It will only take small rises to mortgage rates now to put a lot of people in trouble IMO, the best bet all round for society is very cheap property for ordinary working people.

Mickey666

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Crashy_Time said:

Mickey666 said:

Agreed.

Though the interesting thing is that as far as market statistics are concerned, if there is no sale as a result of this down valuation then it remains invisible to the market. 

As far as the vendor is concerned, the house is still worth their asking price and they are likely to simply keep it on the market until someone can offer that price AND complete . . . at which point the house IS worth that price and THAT is what the market stats will reflect. 

In effect, there is NO down-valuation at all, only a number of discontented potential buyers who didn't offer enough.

That is the definition of "delusional kite flyer", but in reality they will struggle to get their asking price after a devaluation from the bank.

Only in the short term.
'Waiting for the market to come to you' is a well known selling tactic for owners who want a certain price and are prepared to wait for it.  Happens all the time.  And it works.

Won`t work at this point in time IMO, we are at basically a watershed moment for monetary policy/public health, and I would argue that at any time the time frames involved make dropping the price an easier option for people who just want to sell and move on with their lives.

It's nothing to do with 'this point in time'.   There are always different motivations for different sellers.

For those sellers who "just want to sell and move on with their lives" then dropping their asking price for  quick sale obviously makes sense.

For those sellers who are in no rush to sell and want to get the maximum possible price for their property then pitching their asking price above the prevailing market price (whatever that really means) and just waiting until someone offers that price also makes perfect sense.

Both strategies will work at any time, regardless of the prevailing market conditions and state of the economy.

Prevailing market price is what you are realistically in with a shot of achieving for your property, pitching above that at this stage of a property bubble just means you don`t really want to sell IMO.

You're a keen advocate of making very low offers because you believe house prices are too high, which most people would regard as being cheeky and shows you're not serious about buying.  But there's always a chance that a cheeky low offer would be accepted, perhaps because of all manner of reasons in the seller's life that you don't know about.  In which case you win, and win big.  Nothing wrong in that.

But the converse is also true.  A seller might believe their house is so special that they put it on the market at a very cheeky high price.  Like you, most people would probably think this shows they are not serious about selling.  But there's always a chance that someone will offer that high price, perhaps because of all manner of reasons in the buyer's life that you don't know about.  In which case the seller wins, and wins big.  Nothing wrong with that either

All true, but if mortgage rates rise there will be less chance of the second one happening as much IMO.

I'm not so sure.  I've had mortgages with interest rates up to 15% (briefly), though mostly in the 8-12% region.  I didn't notice it stifling the housing market then and I'm not convinced it would do so again.

Sure, higher interest rates will mean higher mortgage payments but they do nothing to stem the demand for houses because people will still need somewhere to live.  So all that will happen is that people will have to spend more on their mortgage (or rent) and be forced to cut back on other spending that is not so essential.

Which just means the economy collapses (again) and more people can`t pay their (higher) mortgage. Would you class the late 80`s property price collapse and resulting negative equity nightmare as a "stifled" market? It will only take small rises to mortgage rates now to put a lot of people in trouble IMO, the best bet all round for society is very cheap property for ordinary working people.

I think 'collapse' is a bit dramatic.  The economy is always moving up and down but there has been no real 'collapse' since the 1920s depression.  Not even covid-19, with it's government-enforced lockdowns has caused 'economic collapse'.  A slowdown, yes, but not a collapse.   Much of the negative equity 'nightmare' was a result of the, frankly, stupidity of people borrowing 110% mortgages and relying on rising prices to save them . . . which actually they eventually did, if they could hold on long enough. 

But yes, short term it was a nightmare for those people - but whose fault was it really?  I'm guessing you'd blame the banks, but it takes two to tango.  Irresponsible lending needs an irresponsible borrower.  You can defend such a borrower as not being financially literate, but we're not talking here about someone falling into negative equity because house prices dropped a little, we're talking about people who borrowed themselves into negative equity on day one!

The whole sub-prime lending fiasco could be characterised as borrowing being made so easy that people were not responsible or financially literate enough to see the risks of over-extending themselves or their exposure to markets risks. 

But regardless of who was really to blame, the inevitable response has been the tightening up of borrowing criteria such that in a time of historically low interest rates when it has never been cheaper to have a mortgage, it is now very difficult/impossible to get high LTV mortgages, with all the implications for needing larger deposits, which as we all know affects FTBs the most.

AdrianC

Mickey666 said:

I think 'collapse' is a bit dramatic.  The economy is always moving up and down but there has been no real 'collapse' since the 1920s depression.  Not even covid-19, with it's government-enforced lockdowns has caused 'economic collapse'.  A slowdown, yes, but not a collapse.

Slowdown might be a tad underplayed.

...but I agree "collapse" is equally overselling it. The bounceback from those depths has been quick so far.


...and if we put it into long-term perspective...

1920s, post-war, and 2008 clearly visible, but predates Covid.

Mickey666

The bounceback from lockdown has been quick because the economy didn't collapse, it was deliberately turned down, ie there were no fundamental underlying problems.

I wouldn't be surprised to see record growth over the coming few quarters because there will be a pent-up demand from  the majority of people exiting lockdown with money to spend, saved up over the past year because they've not been able to go out or on holidays.  Indeed, perhaps many people are already putting those savings towards house deposits, which along with the SDLP holiday, is helping to push up house prices? 

That's why I'd say covid is more of a slowdown than a collapse.  We can debate the degree of either descriptions, but I think we'd agree it's just a 'blip' in the grand scheme of things . . . assuming the vaccine roll-out helps the world get back to normal.