Debate House Prices


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an EA now calling the shots.

friends of my OH put their property on the market at the start of the year via a well-known EA chain, with a price tag of £170k.

no buyer interest.

the EA explained the state of the market and suggested a £6k drop.

still no interest.

the a £5k drop.

nothing.

last week the EA called for a further £6k fall, bringing the asking price to £152,995.

the vendors (here we go again) refused point blank.

the EA has since told them to drop or take their business elsewhere!

I wonder what is going on here: is the EA simply trying to get the HP fall message across or simply chasing an HO target?

this is the first time I've come across an EA prepared to to turn business down - not that I pay much attention.

maybe an isolated case. or maybe not.

I'd be interested to know.
miladdo
«1

Comments

  • flaura
    flaura Posts: 242 Forumite
    Debt-free and Proud!
    I suspect he's desperate to sell something and hopes he will be forcing people to under price. purely my own personal opinion....
    Lightbulb Moment - March 2004 :cry:
    Highest Debt: £16,896.00 :mad:
    :rotfl: Debt Free Date 25th July 2007 !!
    :j and still DEBT FREE
  • WTF?_2
    WTF?_2 Posts: 4,592 Forumite
    EAs are finally starting to catch on that their business depends on volume, not margin. Even the dumb ones. The experienced, well established ones who know the market caught themselves on to this fact quite a while back.

    In the past decade or so they've had both volume and really comfortable margins.

    Now they have to make sales. Better to sell five houses at a 10% discount than one or even no houses at full price.

    They will pretty soon be exerting a strong downward pressure on prices, simply to save their own necks.
    --
    Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
  • WTF?_2
    WTF?_2 Posts: 4,592 Forumite
    flaura wrote: »
    I suspect he's desperate to sell something and hopes he will be forcing people to under price. purely my own personal opinion....

    'under price' :rotfl:

    If the property is not shifting, then the market is telling you that it's overpriced.
    --
    Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.
  • dopester
    dopester Posts: 4,890 Forumite
    the EA has since told them to drop or take their business elsewhere!

    It costs EAs money to have property on their books which they have no realistic chance of selling. If sellers aren't being realistic then they are wasting the EAs time and resources.

    Miles Shipside, commercial director of RightMove
    "Some estate agents are now turning away new instructions if they are similar to the properties they already have on their books and cannot sell," concluded Mr Shipside.

    "This is a major cultural change for most estate agents, but those with experience of previous downturns recognise there are big costs in burdening yourself with even more over-priced stock."
  • tradetime
    tradetime Posts: 3,200 Forumite
    Just sounds like good business to me, nothing more nothing less. Imagine you owned a shop ans suppliers lined up to offer you stock, would you accept stock from a supplier who insisted you price it at a level you knew would not sell to your customers, or would you give your shelf space to those suppliers that offered products at a price you felt your customers would buy.
    As EA's are on commission you pretty much know that getting a good price is in there interest also, but it's a balance like everything else no good having supply if you price out the demand.
    Hope for the best.....Plan for the worst!

    "Never in the history of the world has there been a situation so bad that the government can't make it worse." Unknown
  • Jorgan_2
    Jorgan_2 Posts: 2,270 Forumite
    I've been turning down overpriced properties for years, the majority of good agents do it. Nothing surprising, as tradetime says, good business sense.
  • jamescredmond
    jamescredmond Posts: 1,061 Forumite
    Jorgan wrote: »
    I've been turning down overpriced properties for years, the majority of good agents do it. Nothing surprising, as tradetime says, good business sense.
    ooh err: my OP speaks volumes about my lack of experience re present practises.

    I have the humility to accept that I don't always post informatively here.

    or ask the more pertinent questions.

    unlike others I could mention........
    miladdo
  • phil_b_2
    phil_b_2 Posts: 995 Forumite
    I can understand an EA turning away business if it wont sell. they will be sending their employees out to accompany viewings etc racking up costs for nothing.
    It does seem a bit tight though considering they told them to put it on the market at 170k in the first place. They will have got their hopes up with that and should perhaps be a little more lenient.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    phil_b wrote: »
    I can understand an EA turning away business if it wont sell. they will be sending their employees out to accompany viewings etc racking up costs for nothing.
    It does seem a bit tight though considering they told them to put it on the market at 170k in the first place. They will have got their hopes up with that and should perhaps be a little more lenient.

    EAs are in business, they're not out to do anyone a favour. If they won't market your place for more than £x then find someone that will. If nobody will then market it yourself.

    What's leniency got to do with anything?

    To give a frinstance. Let's say you want to buy a 3 bed semi on Accacia Ave. There are 4 identical places up for sale and prices are falling by a couple of percent a month. Do you buy the place that the EA valued at £200k a year ago for £200k or the place valued last week for £150k? If you wouldn't buy the more expensive one perhaps you can see why the EA isn't interested in marketing it given that a few sq inches in the local paper for advertising will cost the same for each place.
  • bo_drinker
    bo_drinker Posts: 3,924 Forumite
    Six of one half a dozen of the other. I can see a lot of agents doing this soon. Yes it is a bit tight but times are changing and some agents are waking up to it. The pretty girl on the front desk who has been filing her nails and handing out leaflets for a few years better watch her back, she's next to go...
    I came in to this world with nothing and I've still got most of it left. :rolleyes:
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