How much reduction would tempt you to buy now?

Gentle_Flo

A question for the STRs and others who are watching "the market" down - if you saw a property you liked, how much discount on peak valuation would tempt you to buy it now?

And how would you expect to get there - via a reduced or low asking price, or a realistic offer to a realistic seller?

PasturesNew

If we assume I knew I wanted to buy here (got no job and could get one anywhere within 100-120 mile radius) .... I am currently liking houses at £210k and COULD settle for one currently priced at about £150k

I'd be tempted to buy if a £210k house with everything on my tick list came up at £100k... or a £150k house came up at £85k

But I have a separate agenda. Over the next 5 years I plan to accumulate interest and savings of a further £60-70-80k ... so I have to see that "loss" realised to tempt me. So I think I'd still be nervous about the longer-term.

However, as circumstances change, I could easily adjust that. Maybe in 2 years' time I will find myself in a lovely job, in a lovely area .... and it all looks good "for life". So then on the basis I was earning good regular money, I'd tempt spending a bit more and would be happy for those two to cost £160k and £110k

Gentle_Flo

Thanks for your reply, PasturesNew. I can see someone in your position would want to factor out all the risk of ?50% over ?5 years, though I guess if one of your houses did appear on the market right now at "half price" you might have some competition - or maybe you'd just suspect it wasn't worth the estimated peak price anyway.

christh

For me 40% or 50% should cover the downside risk for the next few years. Or I'll just wait. No rush. Which seems to be the way things are looking judging by how sellers are still pricing their properties.

Snooze

Agree with Pastures and Chris - would be looking for 40% reduction at least, ideally 50% (or more). I personally think they will reach around 40% or at least close to; 50% would be fan-bloody-tastic but I don't think they'll drop that far.

Rob

Gentle_Flo

OK, so how about the second part of my question - how would you expect to get that 40% reduction? Are you looking for "price slashed" asking prices, or would you offer 40% below asking on houses that seem likely targets, or will you be looking for new listings that seem to be a lot cheaper than similar houses or are appearing as sealed bid?

PasturesNew

Gentle_Flo wrote: »

Thanks for your reply, PasturesNew. I can see someone in your position would want to factor out all the risk of ?50% over ?5 years, though I guess if one of your houses did appear on the market right now at "half price" you might have some competition - or maybe you'd just suspect it wasn't worth the estimated peak price anyway.

I might have. But as I'd be writing a cheque out for it, the competition might not look so good on paper. If they're not an STR too, the advising EA would put me at the top of the list as "can afford/no mortgage required/can move fast"

That's how you get the deals.

PasturesNew

Gentle_Flo wrote: »

OK, so how about the second part of my question - how would you expect to get that 40% reduction? Are you looking for "price slashed" asking prices, or would you offer 40% below asking on houses that seem likely targets, or will you be looking for new listings that seem to be a lot cheaper than similar houses or are appearing as sealed bid?

This is the tricky bit. It'd have to come through a friend of a friend really.

I think if somebody has such a discount "for a quick/guaranteed sale, no messing" then their EA would know and they'd call their hot prospects on their list. But I am not on any EA list (too many EAs, don't want to be mithered with cr4p all the time).

So it'd have to be a chance conversation leading to an introduction.

If I saw it on Rightmove I'd think "pfft/something wrong with it". I'd never be so cheeky as to offer 40% under, although somebody who knew what they were after might.

If I went round somebody's house this afternoon for coffee and I liked their house and it was on the market for £210k and they said "you can buy my house if you like" I'd joke and say "I'll take it off your hands for £115k". If they said they were desperate to sell as they were going bankrupt, I'd say "OK then, yes", deal done!

... do you have a house for us?

m00m00

in the area I'm looking at, prices have been flat and declining for a couple of years. I don't really expect to see much more than 25% drops from where they are over the next couple of years, but I won't be heartbroken if they drop more.

amcluesent

For an perfectly presented ready to move into house in an excellent area, 25% off the peak would be temping.

For a 'with potential' house in iffy area (or a city-centre new build chipboard flat), then 40%+

Sadly, being old enough to remember 1988-1994, the starting position was that shoddy houses were overbought to be near the price of good properties. Of course, they then fell much further and faster.

carolt

Would look for around a 40% drop - but it could be less, if the credit crunch were to end and fantastically cheap, long-term fixed mortgages became available. Basically, I'd compare my current monthly spend on rent to a mortgage - if I could buy an equivalent or nicer property than the one I now rent for less than it costs me monthly to rent, then it would make sense, financially & emotionally. But I wouldn't go through the upheaval of moving to pay more than I am at present and live in a smaller place!

It would have to be reflected in standard asking prices; from bad experiences I've had in the past, I wouldn't trust a seller further than I could throw them who offered me a unique discount not generally available. I'd feel the likelihood of being gazumped at/near completion was too great.