Friday, May 16, 2008
Time to grasp fundamentals: Property is overpriced and EAs too weak to tell Vendors. Result: Collapse on the cards.
The TImes: Humberts shares suspended over financial fears
"In February the group reported a £17 million post-tax loss and gave the first warning about its future. At the time Humberts blamed the slowing property market for its financial woes and said that it was in urgent talks to raise cash without which there was a “material uncertainty” about its future."
If estate agents can tell their customers (the vendors) to price realistically, then people will be able to afford the mortgages and comission can come in. Come on EAs - stop the lunacy. Bramptons in Beaconsfield are an example of some crazy pricing. A house valued at about £475k off-plan (it was being gutted, extended and rebuilt) in April 2007 goes on the market for £675k. Apparently the buyer didn't go with EA advice. Sure. Property taken on anyway. Craziness like this causes woe.
12 Comments
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1. growler said...
add to the above the selling of Rightmove by HBOS (http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article3944831.ece) and you can see the smart money move away from property based turnover.
2. Rental John said...
Vincent Tchenguiz...erm - thinks.... I remember that name from somewhere...
see www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/27/ccprof27.xml & www.consensusbusiness.com/about/chairman.html
3. str 2007 said...
Growler
Do you know if the house you mentioned sold at £675k, I had a look on Rightmove when you mentioned it a few weeks ago but couldn't see it.
A friend of mine bought the bottom half of a council house back garden in Beaconsfield about 3 years ago, built a 3 bed house and sold it for £500k.
I doubt he could do that now but shows the madness.
I would have thought Rightmove to still be a good business as it seems to have established itself as market leader and whether houses are selling or not people are still paying to advertise them.
If they have 90% of houses being sold on their books as they claim, the amount of estate agents seems irrelevant to me, providing they pay upfront for the advertising or Rightmove have the accounts insured.
Therefore is it HBOS desperately trying to raise money anyway they can ?
4. growler said...
It's on the Bramptons website for £675k. It's not exactly in Beaconsfield, but not far. It's a chalet bungalow. When it was being worked on I popped through the door as I was interested. The owner was talking he'd had an agent value the plans at £475. We exchanged numbers and it It never went for sale due to unfinished work. The owner took almost a year longer to finish the property than he'd told me. Now it's on for £200k more whilst houses in the same road are falling in price about £70k in the same period - and are still unsold. If I were an EA and I had a house that came on for such a crazy over-price, I'd refuse the business as this seriously undermines the agent. What this little anecdote tells me is that speculation is rife and agents desparate for business - thinking "instructions" mean income. I'm afraid "sales" is income, and anything Bramptons advertise now is met with the greatest of suspicion. I can't be alone, and as such I can see more agents get into difficulty unless they start to educate "it can only go up" pie-in-the-sky vendors.
5. justwatching said...
The possibility of Humberts going under? Where has all of the mock laughter gone?
6. Rental John said...
It's only funny for so long...then you just want to cry - from laughing so much!
7. denzil said...
Humberts bought a local and fairly large chain of EA around my area just last year at top dollar. One of the senior partners of local agent chain who drinks in my local was laughing his head off at what he viewed as complete stupidity of Humberts.
8. malct said...
would it help to take some pressure off this evolving website if admin created at system whereby posters could communicate one 2 one but still annon?
just a thought.
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