Want to buy but being scared by negative equity comments!!

dander

I have to agree with the other posters that when there's a house price dip, then you have to take a cut on your own property as well as beat the price down on the one you're buying. I also think 20% under an asking price is not realistic at the moment. House prices have dropped, but not many have dropped that far. It's certainly a good place to start with your offers, but you can't assume you'll be accepted at that level. Plus, I'm afraid, when house prices falls are calculated, it's the difference in completion prices that are calculated - asking prices are irrelevant, so yes, a house price fall would affect you.

Also 4 years in property terms is not long at all. If you think about the cycles we've recently been through - when was the big property crash? Late 80s wasn't it? - I bought my first place in 1993 - so I guess about 4 years after the "crash" started. At that point property prices were still right at the bottom and the market was full of reposessions, and I would say it was a further 3 or 4 years before I saw any real movement upwards in property prices. It probably took around 9 years for that flat to get back up to its pre-crash valuation.

So don't count on time doing you any favours! If, of course, it's a lovely place, you can afford the mortgage, even if interest rates go up, and you'd be happy to stay there for many years and call it your home, then negative equity might happen, but might not actually be a major problem.

Kez100

If you have the right property the loss on each won't necessarily be the same. Our FTB house had lost money - and we were in negative equity BUT it was the best house on the street and a FTB buy. So, we had to drop 10% from our purchase date to sell in the last crash but it sold when others were not. There were very few buyers and the key was to appeal to one and do a deal, otherwise there would be no alternative but to stay.

However, that then put us in the enviable position of being a valid buyer. We looked for desparate sellers and then made bids on homes we liked. We secured a drop on that one of 37.5% of asking price (20% lower than our surveyors valuation).

I agree the OP is counting chickens at the moment. She needs a buyer before she can even think about making a deal elsewhere. It's the pulling together of everything that's the difficult bit.