Wednesday, Mar 19, 2008
ADVICE: Sellers - Cut your prices!!!
FT: The credit crunch and the housing market: questions and answers
What should I do?
It is probably a good idea to avoid selling unless absolutely necessary. If you have to sell, market the property at about 10 per cent below its value to attract interest. This way, you may spark a bidding war.
Posted by inbreda @ 11:35 AM (1583 views) Add Comment
20 Comments
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1. inbreda said...
Bad etiquette to be the first poster I know, but i just love these lines from the article:
"First-time buyers should stay away for the time being....negotiate hard"
"Should I be worried about my other debts?
Unfortunately, yes."
"Sellers have either to withdraw the property from the market or accept a much lower price."
"If you are a first-time buyer, don’t bother trying to get a mortgage unless you have a deposit for at least 25 per cent "
Unfortunately no advice for BTLers!!
2. Letthemfall said...
"It is probably a good idea to avoid selling unless absolutely necessary"
What depth of wisdom. There must be thousands of people who sell their house when it's not absolutely necessary. We all look forward to handing over a wad of money to estate agents and solicitors; and them more to the inland revenue when we buy again.
3. Jackas said...
Market the property about 10% less than it's "value"?
Does that give you the property value then? So it must be 10% below that new level then.....
repeat to fade...
4. hpwatcher said...
Most sellers won't cut because they are just chancing it...hoping some fool will turn up and pay the full price.
House prices falling will be one HELL of a lot slower than them going up. Only those who absolutely have to sell will.
5. Is It Me ? said...
'Market the property at 10% below its value' . Do they still not understand yet that the property 'value' is the amount someone will pay for it !!
What they should say is market it at 40% below the valuation an Estate Agent puts on it if you want any chance of selling it.
6. mark wadsworth said...
When I put our house on t'market back in November 2007, the range of prices suggested by 3 estate agents was from £395k to £480k. I stuck it on for £400k and it shifted within weeks. I note gleefully from houseprices.co.uk that another house three doors up sold for £361k recently and one three doors down which was sold STC for £385k last November still hasn't completed.
7. quiet guy said...
I was amused by this bit:
"If you have to sell, market the property at about 10 per cent below its value to attract interest."
The value of the property is what you sell it for. Everything else is opinion.
8. cyril said...
All this bad housing market news hasn't made much impression on people I know. Had a conversation last night with a couple of deluded people - one has recently bought a new house and expects to get half a million for his old house - a tiny 2 up 2 down in SW London. The other is selling his flat for about £250k and is looking for a first time buyer. I can't imagine many FTBs coming up with a £50k deposit!
9. quiet guy said...
@cyril
I know what you mean. We are approaching a financial abyss yet most of my colleagues seem to think that it somehow won't affect them. I think Hpwatcher is right; it will take a long time for the horrible reality to sink in.
10. george monsoon said...
Times are hard. If the article is correct and myself as a FTB needs 25% deposit then I am truly screwed.
11. inbreda said...
It will seem slow until a tipping point in terms of the number of people who have reached the grief stage of "acceptance". Then it will go very quickly. And I don't think that point is too far off now.
12. geed said...
Cyril - £50K is 20%. Nationwide will only deal with FTBers with 25% deposit these days, thats £62.5K. There can't be many FTBers with that amount of money sitting in the bank. Those that do have that sort of cash, are probably not the types to gamble in a deflating housing market virture of the fact they have saved in the first place. I speak from experience here....I have saved and there is no chance in hell I will be entering the market.
Savers value money a great deal more than those that gorge on credit. Credit is gone, savers remain. We will not throw our hard earned cash in a hurry, we will sit and wait as long as it takes.
13. wage slave said...
If FTBs need a 25% deposit (and BTLs as well I assume) then surely the price of the avarage FTB house will have to be 4x the avarage savings of a FTB.
Anecdotally I phoned up an EA to see what the lease was on a flat they were marketing. When asked 'would I like to view it' I replied that there's no point as I would only be prepared to offer 20% under the asking price in today's market. To which I was more or less told that the vendor would accept £15,000 under the asking price. That's less than 10%, so I declined to take my interest further.
14. shipbuilder said...
Why is it a good idea to avoid selling unless necessary? Because the market will recover? Dream on.
Surely if you're going to sell, sell now and cut the price to sell ASAP, then bank the money and rent.
In a falling market, if you wait, the chances are when you do sell it will be for less than if you cut the price drastically in the first place.
It's a measure of how selfish, greedy and self-regarding we have become that people believe they have a 'right' to the random value stated by the estate agent.
Just cut your prices, people, and get over it.
15. Hopeless Ftb said...
do not think that all FTBs are willing to pay current prices.
i ahve been waiting for a crash for ages and i can buy in cash for 300k. ok i can buy and as a FTB i have nothing to sell; but as i have been waiting for so long and i do not want to buy when i am convinced that the prices will drop 40% in London.
i worked hard for saving that money, do nto want to blow it!
in the meantime? well, i rent! not a crime! and i will bid 60% of the asking price when i will look for a flat. cash there etc. i am sure i find a LOT of vendors willing to accept my offer.
still, it is too soon! all the buyers try it on! they try to get a high price and only after 6 months they will drop the price. once hte mechanism start working though it will be very different to stop!
thank god my time is arriving!!!!
16. doomwatch said...
I've noticed a lot of "To-Let" and "For Sale" combos going up round Clapham & Wandsworth over the last 3 months &
none I've noticed have been sold.
17. Landedgentry said...
Eventually they'll be running and screaming "Get me out, Get me out"! at whatever price.
It's like trading, if your not prepared to take a small loss, be prepared to take the mother of all losses.
The mortgage meter is still running folks.
18. Ben Hudson said...
sensibly priced houses have always created interest the problem has been over valuing by some agents . we are finding at the moment the market is about 5% DOWN FROM ITS PEAK and now moving well
19. happyrenterz said...
Good grief The Times has suddenly turned bearish after their weekend housing market ramping. Even Anne Ashcroft wrote "There will now be even fewer half-decent home loan deals either for overextended home buyers hoping to remortgage, or for would-be owner-occupiers not clutching a large deposit. Even the creditworthy could face refusal." http://property.timesonline.co.uk/tol/life_and_style/property/article3572373.ece
20. crash bandicoot said...
Ben Hudson, I am pleased that you find the maket moving down, where do you think that it will stop?