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Posts posted by buy_hi_sell_lo

  1. I've been struggling for years to get my head around how some people just won't accept that house prices are not a one-way bet. I used to think it was because they didn't know the other side of the argument, or haven't lived through previous crashes/recessions etc. However, a conversation last night with an old friend has left me speechless. I don't know whether to laugh or cry. In a nutshell:

    Guy bought his house last year with a very large helping hand from the bank of mum & dad for just shy of £600k which set the ceiling price for the street (as well as being 100% of asking price). In my book it was a ridiculous price for what it is. However he's had both feet firmly planted in the "prices only go up in this area" camp for many years - despite my many attempts to open his mind to the possibility that this may be a fallacy.

    So in September last year an identi-kit house a few doors down comes on the market for £550k which according to my mate is an effin bargain and will get snapped up before the day's out. The reason it's cheaper than his is because the laminate isn't as good quality and there's no twigs & vases (or something along those trivial lines).

    Fast forward to today and it's down to £450k without a buyer in sight. On the phone last night he tells me it's not shifting because there's no conservatory and all the other houses have got one. My response these days is a simple hmm. However the bit that got me was "anyway mines worth £600k cos the previous owners paid £570k in 2007 so I couldn't offer them less cos they'd have no profit."

    This guy, in most other situations haggles like his life depends on it. He'll quite happily argue the toss over a few quid in Comet. But it's just dawned on me that if this way of thinking is widespread amongst the sheeple then it really is just the banks closing the mortgage tap that's saving people from themselves - I didn't realise people buy houses at a premium because the seller "deserves" a profit.

    Curious to hear if anyone else has encountered similar thinking or is my mate just an extreme case?

  2. one of my personal favourites from Tesco. I've got a few other examples on the phone. I haven't got round to sending them to their CEO yet asking whether he employs muppets to do his pricing or if he thinks his customers are the muppets.

    Another trick they regularly employ is the BOGOF. As the cheapest item is free, I always put the expensive ones through together, settle up & then get them to scan through the cheapest - otherwise you get screwed - e.g. 2 items at £10 each & 2 at £4 each all on BOGOF - put them all through together & you pay £20, put them through as I do & you pay £14. You won't believe how long it took me to get this through to 'er indoors.

    At least my 8 year old clicked straight away that "something' doesn't add up" in the picture below



  3. http://news.bbc.co.uk/1/hi/talking_point/8611961.stm

    "Money Watch, a new three part series for BBC2, wants to speak to people thinking about buying a house.

    It is the biggest single investment that most of us will make in our life. But should we make it with our investment head on? Or should we listen to our home-loving heart?

    We want to speak to a couple/family buying a house for the long term, which they hope will be their best possible financial investment. This would include first time buyers who are keen to get on to the property ladder, as well as someone moving up the property ladder to get a bigger place.

    We want to speak to people that see property, in the current financial marketplace (eg with savings rates at an all time low and the low cost of borrowing), as a good investment vehicle."

    I wonder if they'll take on anyone that has the view that you must be nuts to be buying right now? More likely to be a case of reinforcing the notion that there's nowt like bricks'n'mortar to make you rich, rich, rich...

  4. Just came across this little gem on rightmove - not the house but the headline. I'm tempted to call in the morning and ask what is was priced to do before - maybe priced to humour, or priced to take the p155, or maybe priced to fill a blind spot in the shop window - btw it's still overpriced by at least 40%. I keep hearing about the recovereh but here in south Manchester all I see is the same properties that have been on for 18 Months + with the odd token reduction every now & then moving from agent to agent. Every now & then there's a fanfare from an agent proclaiming the bargain of a lifetime - yours for only 200k over the odds rather than 210k. I'm thinking of setting up a Dragons Den stylee operation - find some like minded souls who have the will and the means to buy a home (not an investment) and have people come along with their agent & try to sell us their house. convince us you're serious about selling and let's talk turkey - having some fun at the agents expense. "so Mr estate agent, tell me again wtf possessed you to think anyone would be stupid enough to pay this price" I think it would make good tv and help educate the sheeple at the same time. Anyone interested?

  5. Got sent this recently, and I really think it should be a mandatory topic in schools. The look on people's faces as the penny drops when they start to think through the answer to "Who has stolen the $3 from the country's economy?" - the $3 never existed! I really think that the powers that be don't want the sheeple to have even this level of rudimentary grasp of finance & economics.

    The following story is an analogy to a bubble economy. It was sent originally by a Professor of Finance. It was developed to help students understand the Senate testimony by Enron whistle-blower Sheron Watkins. This has been used routinely in an introductory course in financial accounting for MBA students.

    Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was $2 as there were only two 1-dollar coins in circulation. There were 3 citizens living in this island country. A owned the land while B and C each owned a dollar.

    1. B decides to purchase the land from A for $1. So, A and C now own $1 each while B owns a piece of land that is worth $1. The net asset of the country is $3.

    2. C thinks that since there is only one piece of land in the country and land is an asset that cannot be produced, its value will definitely go up. So, he borrowed a dollar from A and together with his own dollar, he bought the land from B for $2.

    A has a loan to C of 1 dollar, so his net asset is $1. B sold his land and $2, so his net asset is $2. C owns the piece of land worth 2 dollar but with his $1 debt to A, his net asset is $1. The net assets of the country are $4.

    3. A sees that the value of land he once owned has gone up. He regrets selling it. Luckily, he has a $1 loan to C. So he borrows $2 from B and acquires the land back from C for $3. The payment is made by the $2 in cash (which he borrowed) and cancellation of the $1 loan to C.

    A now owns a piece of land that is worth $3. But since he owes B $2, his net asset is $1. B loaned $2 to A, so his net asset is $2. C now has the two coins. His net asset is also $2. The net asset of the country is $5. A bubble is building up.

    4. B sees that the value of land has continued to rise. He also wants to own the land. So he buys the land from A for $4. The payment is by borrowing $2 from C and cancellation of his $2 loan to A.

    A has cleared his debt and he has the two coins. His net assets are $2. B owns a piece of land that is worth $4 but since he owes $2 to C, his net assets are $2. C loaned $2 to B, so his net assets are $2.

    The net assets of the country are $6. Keep in mind, that the country has only one piece of land and 2 dollar in circulation.

    Everybody has made money and everybody feels happy and prosperous.

    5. One day an evil wind began to blow. An evil thought came to C. "Hey, what if the land price stops going up, how could B repay my loan. There is only $2 in circulation, I think after all the land that B owns is worth at most $1." A also has the same thought.

    6. Nobody wants to buy land anymore. In the end, A owns the two 1-dollar coins; and his net assets are $2. B owes C $2. And the land, that he thought was worth $4, is now worth only $1. His net asset becomes a negative $1. C has loaned 2 dollar to B. But it is a bad debt. Although his net asset is still 2 dollar, his pulse is racing. The net assets of the country are $3 again.

    Who has stolen the $3 from the country's economy?

    Of course, before the bubble burst B thought his land was worth $4. Just before the collapse of the country's economy, the net assets of the country were $6 on paper. B's net assets are still $2, his pulse is racing.

    B has no choice but to declare bankruptcy. C has to relinquish his $2 bad debt to B but in return he acquired the land which is worth $1 now. A owns the two 1-dollar coins; his net assets are $2. B is bankrupt. C has no choice but to end up with land worth only $1; he lost one dollar. The net assets of the country are $3.

    The country's wealth has been re-distributed. A is the winner; he has gained a dollar. B is the loser; he has lost a dollar. C is lucky that he somehow managed to end up with land that is worth a dollar.

    There are some points worth noting:

    A. When a bubble is building up, the debt of individuals to one another is also building up.

    B. This story is built around a "closed system" in which there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island's own currency. Hence, there is no net loss.

    C. An "over-damped system" is assumed, meaning that the land's value did not go down below $1 when the bubble burst.

    D. When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are losers. The assets could shrink or worse, they could become bankrupt.

    E. Suppose there is another citizen D who either holds a dollar or another piece of land, but who refrained from taking part in the game. At the end of the day, he will neither win nor lose. But during the bubble, he will see the value of his money or land going up and down like a see saw.

    F. When the bubble was growing, everybody made money.

    G. If you are smart and know that you are in a growing bubble, you may make money by borrowing (like A) and taking part in the game, if and only if you change everything back to cash at the right time.

    H. You can easily substitute "land" with "stocks" in this story.

    I. The market worth of the land or stocks depends largely on market psychology.

    J. None of the transactions in the story involve any productive activity. Instead, wealth was created entirely from accounting entries and financial transactions.

  6. I was a kid in the seventies but was aware of inflation, as in retail price inflation. Before barcoding it was when they had little stickers on supermarket items, and I remember they were often stuck 3 or 4 on top of one another with a new higher price each time.

    Lol! I'm 37 & whilst I don't remember the 70's recession I recall me & my mates trying to peel off price stickers on sweets to make our pocket money go further! The old price was always less than the new price.

    Early 80's I remember my folks' business doing ok & though money was tight we weren't left wanting for much. Late 80's were good. Business was booming by now & they borrowed hard & expanded fast.

    Early 90's it all started going pear shaped. They pretty much lost everything including their home in 97. Everything they'd grafted 30 years for. That was my lesson in how debt & the banks (& some may say greed) can totally destroy people.

    So now my motto is cash is king. I've been lucky & sensible during the noughties and have a reasonable stash to buy a decent home for my family once sanity returns. I don't know if this recession is going to be any worse than the ones in the past. It's definitely going to leave a lot of people fooked for a long time.

  7. OMFG, I'm absolutely stunned, my girlfriend and I earn between us £60k (mid 20's and mid 30's). I never really understood just how bad the leding had been. On our combined salary we would only just be willing to buy a 3-4 bed in a good area for £200k but here are these absolute uneducated, below 100 IQ, financially challenged morons who the banks will led over £150k when they are on £14k-WTF!!!!!!! :angry: :angry: :angry: No wonder we can't get a place we could afford that suits our needs.

    This is where you're going wrong. As you earn 4 times as much as the Muppets you need to be looking at houses that cost 4X. Therefore you need to be looking at houses "worth" £600K. It's people like you staying out of the market that are to blame for this mess we're in - too much time getting an education has neutered your cojones - no sense of social responsibility - you gotta BUY BUY BUY.

    - that's the kind of advice I was getting from my extended family (aka circle of mistrust) over the last few years - "look at cousin Bob - has a McJob on 15K and a proud owner of a few lie-to-buy-to-let mortgages of 200K+ each - failed his GCSE's & he's a blooming millionaire - where's all your education got you? Still renting - what kind of parent are you? - don't you know need to speculate to accumulate - don't be so stubborn / risk-averse - can't lose on bricks & mortar, bish bosh - loadsamonneeeeey!"

    Seriously though- wonder how many sheeple have got themselves into huge debt as a result of this kind of pressure - I know from personal experience how much it can do your head in and strain relationships. I'm angry but not just at the lie-to-buy sheeple, the majority of which have just sleep-walked themselves & us into financial disaster - it's all the VI to$$ers who flew the flag of boom everywhere that are the real villains - people like Krusty Alslop should be publicly humiliated and forced to contribute a significant percentage of their future income to an appropriate charity (don't know who's more deserving - the homeless, or the kids of the repossessed) and banned from ever appearing on TV / writing in the media again.

  8. "We have low debt in this country" just said it on BBC interview in what looked like a bus.

    Mad. He is stark raving mad.

    GORDON BROWN was visiting a primary school and he visited one of the

    classes. They were in the middle of a discussion related to words and

    their meanings. The teacher asked Mr. BROWN if he would like to lead the

    discussion on the word 'tragedy'.

    So the illustrious leader asked the class for an example of a 'tragedy'.

    A little boy stood up and offered: 'If my best friend, who lives on a

    farm, is playing in the field & a tractor runs over him and kills him,

    that would be a 'tragedy..'

    No, said GORDON - that would be an accident.'

    A little girl raised her hand: 'If a school bus carrying fifty children drove over a cliff, killing everyone inside, that would be a tragedy'

    I'm afraid not, explained GORDON - that's what we would call great loss'

    The room went silent. No other children volunteered. GORDON searched the

    room. 'Isn't there someone here who can give me an example of a tragedy?'

    Finally, at the back of the room, little Johnny raised his hand...

    In a quiet voice he said: 'If A plane carrying you and MR. DARLING was struck by a 'friendly fire' missile & blown to smithereens, that would be a tragedy.'

    'Fantastic!' exclaimed GORDON. 'That's right.. And can you tell me why that would be tragedy?'

    'Well,' says little Johnny 'it has to be a tragedy, because it certainly wouldn't be a great loss and it probably wouldn't be a f***ing accident either!'

  9. Britain going bust

    just landed in my spam folder - it's incredible how these con merchants have turned full-circle. These [email protected] were ramping the "become a property mogul on the back of the bank's money" schemes until a few months ago. Now they're the doom-mongers who saw the bust coming and if you just follow their advice (all for a measly few quid) you too can benefit from their infinite wisdom and become a squillionaire in no time. I find it weirdly offensive and amusing in equal measure - how many people will get sucked into these kind of schemes I wonder? I'm just amazed that there is no legislation to protect sheeple from these criminals - I guess some folks would say if they're stupid enough to fall for it then they deserve everything they get.

    Just thought you guys might find it funny / interesting.

  10. I know it's not the Monkees, but couldn't resist joining in - can't believe it took this for me to post again after lurking for so many years! By the way if anyone's interested never did buy a mortgage in the end - stayed put in rented (750pcm vs £375K asking price - a no-brainer)

    to the tune of The Drugs Don't Work by The Verve:

    All this talk of getting sold

    It's getting me down my love

    Like a cat in a bag, waiting to drown

    This price is comin' down

    And I hope you're thinking of me

    As you lay down your pride

    Now the banks don't work

    They just make it worse

    But I know they'll never see your face again

    Now the banks don't work

    They just make it worse

    But I know they'll never see your face again

    But I know I'm on a losing streak

    'Cause I passed down my old street

    And if you wanna sell, then just let me know

    And I'll sing to your EA again

    Now the banks don't work

    They just make it worse

    But I know they'll never see your face again

    'Cause baby, ooh, if the bailiff calls, I'm coming, too

    Just like you said, you leave my MEW, I'm better off rented

    All this talk of getting sold

    It's getting me down my love

    Like a cat in a bag, waiting to drown

    This price is comin' down

    Now the banks don't work

    They just make it worse

    But I know they'll never see your face again


  11. Apologies for the long-winded post - just needed to let off some steam - I just can't believe how blind people are to the fact that the whole housing market is completely screwed.

    Whilst I'm totally convinced that the crash is nigh, I'm looking to buy a home for my family for a number of reasons - stability, peace (from the nagging missus), etc. - the main thing being that whatever we buy now will be our family home for at least the next 20 years - spent long enough moving around - won't be heavily leveraged - so pretty well insulated from market movements for the next few years. I'm looking in the so-called Golden Triangle (Altrincham, Wilmslow, Alderley Edge) and have got to know the area pretty well.

    First observation is that it's hard to see the gold in the triangle - mainly sh1tty brown with the odd bit of gold. Whole areas have sprung up on brownfield sites in recent years - dodgy build quality - and I've seen bigger plots in cheesy porn movies than these so-called "Executive Homes". From what I can see - there's a handful of streets in each of the 3 towns that could be called quality location - the rest is is just plain old mutton dressed as fresh lamb. People will tell you with a straight face that their house is worth twice what they paid for it 4 years ago "because it's Wilmslow/Altrincham/etc." - but get very offended when you ask them why it's been on the market for so long if it's such a bargain.

    Second observation - houseowners have had their heads filled with so much [email protected] from EA's and the likes of Krusty Alsop that even a generous offer (within 90-95% of asking price) is met with contempt - "I passed on your offer to the vendor, however, he found it insulting" Not as insulting as I found his asking price. A classic example is 4 bed det on at 430K - been sitting there for at least 6 months+, EA tells me vendor may be willing to knock as much as a whopping ONE THOUSAND POUNDS off his asking price to get a sale - the market is truly buggered.

    Needless to say there's so much [email protected] just sitting on the market that when anything half decent does come up for sale it gets snapped up. This in itself is not surprising - what has shocked me is the frenzy - a couple of times I've been gazumped - and if the EA's in question are to be believed - by 10-15K. Now, I happen to believe that a person who backs out of an agreed deal doesn't deserve my money, so I won't be drawn into a counter-bid no matter how good the house is - the simple facts are that in the current climate there are no bargains to be had - just that some are better value than others.

    This leaves me gobsmacked by the sheer lunacy of people - in both cases where I got gazumped my agreed offer was 92-93% of asking price - not really a good deal but the best I could manage when dealing with nutters. The "other offers" would have taken it to 97-98% - something my best instincts tells me you only do when you come across a BARGAIN.

    Maybe I'm just being tight and too fussy - but I lived through the last boom & bust cycle - in what's considered to be the one of the best parts of S.Manchester - and OK there may not have been wholesale price cuts - but it certainly wasn't pretty. Similar market sentiment as today at the peak followed by any kind of offer being grabbed with both hands when it turned - forget insulting - just be thankful we've got an idiot interested. Reports day and night of people stuck in N.E - I remember in places like Salford EA's offering "buy 2 for 5K, get one free" deals (no joke - it really was happening) and even then they weren't shifting. The main lesson I learned is that only buy at a price you can comfortably afford over the long term - if not now, then wait - there will always come a time when you will be in that situation - people who say "if you don't jump on the gravy train now no matter what the cost, you'll never get on" are only contributing to the madness and setting themselves and anyone who listens to them up for a lot of pain and misery.

    I'm no economist, but I do know from experience that what goes up invariably comes down sooner or later - and all this stuff about it being different this time because of whatever reason is nonsense. Every time it's different - markets don't have brains, they don't make decisions for themselves - they are run by human beings and are subject to the flights of human fancy - so each time there's a boom and bust - yes it's different from the last - because we learn from our mistakes - we may not make the same mistakes again - but we compensate for this by finding new, improved ways of messing things up - and the people running the markets are only interested in numero uno - they couldn't give a flying f**k about waht's going to happen to Mr & Mrs Joe Bloggs who have just remortgaged their Executive sh1thole to 3 times it's true value and bought themselves a pair of his'n'hers X5's to travel between the portfolio of executive-squats-in-waiting that they're paying the bank for the priveledge of managing on the bank's behalf.

    Just because Tony said "Things can only get better" back in '97 doesn't mean they have.

  12. I'm a 1st time poster - although been browsing here for a year or so - just curious to know when the HPC comes - when will you know the market has hit rock bottom? When would be the right time to buy? Or do you sit and wait and wait and wait because it could go lower? Not trying to be tw*ttish - just trying to work out when to dive into the market again - sold my house a while back - made a tidy sum - currently renting but the thought of paying someone elses mortgage doesn't sit well with me. So while I can see that the market's at a virtual standstill, prices are being reduced (or as EA's say offered at "new price") - just wanna get on with my - so curious to see what folks think about a strategy that if you can get 10-15+% knocked off the asking price for a house in an area that you don't mind staying in for 10+ years if it all goes tits up - is it worth biting the bullet?

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