How much below asking price is realistic now?

SerenaGoode

panichousebuyer wrote: »

I stand corrected!:rolleyes:

I didn't mean 'lose' 50k, we can't afford to reduce the asking price by 50k as we will be buying at around 200k, which means if we don't want to increase the mortgage by that amount we would have to have that in the bank to make up the difference!

I am correct now?

Kind of. Except you're still missing the point that you can reduce your offer on the place you are moving to by the same amount, since everywhere will be falling. and if you can do that you haven't lost a penny.

And of course a lot of deals won't happen because people will get stuck in their minds at the "I can't afford to lose £50K'" stage and fail to realise that nothing has changed in relative terms. So the market will be very slow until reality sinks in.

dopester

panichousebuyer wrote: »

But also what happens if you offer 75% 10 times and you get refused, then do you never buy!

That's right... we leave you alone with your fantasy world dream of your house being worth x-amount, whilst we buy one of your neighbours houses who are forced sellers due to circumstances at -30% to -50% discount to your asking price.

We've got all the cash miladdo and aren't in any hurry. You carry on struggling with the mortgage reset payments.

Cash/Liquidity beats your Bricks and Mortar/Illiquidity.

panichousebuyer

SerenaGoode wrote: »

Kind of. Except you're still missing the point that you can reduce your offer on the place you are moving to by the same amount, since everywhere will be falling. and if you can do that you haven't lost a penny.

And of course a lot of deals won't happen because people will get stuck in their minds at the "I can't afford to lose £50K'" stage and fail to realise that nothing has changed in relative terms. So the market will be very slow until reality sinks in.

I do know that that is the point, however, like you say until everybody starts dropping their price, you are stuck. I know that we can drop by x amount and offer them x amount less and we won't have lost any money, but this only works (surely) if the people you are buying from can/will lower their price etc.

I am also not saying that house prices are not coming down but, I don't think at the moment, the majority of people if their house was up for sale for 200k and somebody went in at 150k they would say ok.

How many people would take a 25% reduction if no other houses (at that time) were doing the same?

SerenaGoode

panichousebuyer wrote: »

I do know that that is the point, however, like you say until everybody starts dropping their price, you are stuck. I know that we can drop by x amount and offer them x amount less and we won't have lost any money, but this only works (surely) if the people you are buying from can/will lower their price etc.

I am also not saying that house prices are not coming down but, I don't think at the moment, the majority of people if their house was up for sale for 200k and somebody went in at 150k they would say ok.

How many people would take a 25% reduction if no other houses (at that time) were doing the same?

That's a fair point, and of course 25% would be too much to expect to be able pass on right now. Offering 25% now for a FTB might make sense though because it is self-protection - if it works, it works, if it doesn't you haven't exposed yourself to further risk.

(It's the gap between these two viewpoints that means that very few deals will be done with a FTB at the bottom of the chain).

For homeowners trading, it will be a more gradual process. Right now the only properties I see shifting around me are going at about 10-15% off initial asking. So right now, I'd say everything I said above, but putting in 10% or so as an amount you could reasonably expect to be able to get as a discount on your own purchase. So long as you can get the same discount, no harm done.

(If you are trading up, it may even be worth taking a bigger hit than you can get on your purchase - imagine you sell your house at 15% off for £170K, but manage to buy a £400K house for 10% off = £360K - you actually 'made' £10K compared to before the prices fell).

Over a period of time the general perception of market price will shift down by 10-15% but it will take time, with not many deals done meanwhile. the big question then is whether that is far enough given the credit crunch (which isn't going away any time soon). It might take another 10-15% of grinding falls from there to get the market functioning again. That's why I'd advise a FTB to offer 20-25% off or wait. but for a homeowner who isn't forced to move I'd advise only accepting an offer that is reduced by the discount you believe you can achieve elsewhere.

panichousebuyer

[/QUOTE]Over a period of time the general perception of market price will shift down by 10-15% but it will take time, with not many deals done meanwhile. the big question then is whether that is far enough given the credit crunch (which isn't going away any time soon). It might take another 10-15% of grinding falls from there to get the market functioning again. That's why I'd advise a FTB to offer 20-25% off or wait. but for a homeowner who isn't forced to move I'd advise only accepting an offer that is reduced by the discount you believe you can achieve elsewhere.[/QUOTE]

I agree with you that obviously it is the first time buyers who need the biggest reduction (25%) in the event of a 'crash', the problem is that the next person up the chain is the one who almost certainly can't afford to give it!

I, at any rate, will soon see, the house goes up for sale tomorrow!:eek:

BettiePage

I, at any rate, will soon see, the house goes up for sale tomorrow!:eek:

Good luck.

panichousebuyer

BettiePage wrote: »

Good luck.

Thank you, I know I am going to need it!!!:)

SerenaGoode

I, at any rate, will soon see, the house goes up for sale tomorrow!:eek:

Good luck, will be interesting to see how it goes.

I suppose that if you are buying and selling, it might be swings and roundabouts - harder to sell, but in a stronger position than you would have been as a buyer. property still changes hands in this kind of market, and you might even get a bargain.

panichousebuyer

SerenaGoode wrote: »

Good luck, will be interesting to see how it goes.

I suppose that if you are buying and selling, it might be swings and roundabouts - harder to sell, but in a stronger position than you would have been as a buyer. property still changes hands in this kind of market, and you might even get a bargain.

As long as I get like for like I would be happy. No mortgage increase, or only a small one to cover moving costs, here's hoping!

trulysaintly

snarffie wrote: »

Take this advice if you DON'T actually want the house.:rolleyes:

Indeed...if anyone puts an offer in on my property at 75% of asking price, they are wasting their time and mine.

Sorry but property prices are NOT dropping like a stone everywhere to justify a lower offer like that...

This malarkey is all PRESS and MEDIA LED...

Don't believe everything you read...:D