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Put A Bid On A House, Declined, Then Price Rises By 30k

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We put a bid on a house of 10k under the asking price, It was a house in a nice area, which needed gutted from top to bottom, asking price was offers over £100k but we tried our luck with £90k but were told that wouldnt buy it, so 2 days later i called back to see the lie of the land. Well he said, there have been some developments, the owner has raised the price by £30k so the price is now sitting at £130k or offers above, the house needs 40k approx to spend on it and at that stage it would be well overpriced to similiar houses beside it.

What exactly has happened here, the EA undervalueing it? Owner went crazy?

Who raises their asking price by 30k in this climate.

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On TDGTTS website there seems to be a few price rises every week across the province, many of which have been on property news for months and obviously haven't sold. You have to remember though, they are only asking prices from a deluded EA or vendor.

Check out these examples from last week and check out their history on the right hand side. You'll find many of them have been up and down like a proverbial....

Click

I fail to understand how if a house doesn't sell at £100k, they expect it to sell at £130k. I think its some kind of psychology from the EA to make people think 'oh $h1t i better buy a house now because they are jumping up again' :rolleyes:

Keep your eye on it and you'll probably find it'll drop again sooner or later.

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What exactly has happened here, the EA undervalueing it? Owner went crazy?

Who raises their asking price by 30k in this climate.

The vendor believes that we are about to return to "normal"

You can see - return to "normal" - on this graph.

manias-bubbles.jpg

Make sure you withdraw your offer. When they come back to you at the end of next year offer £70,000. It will be obvious to everyone by then that house prices only go down :lol:

Good luck,

BB

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The vendor believes that we are about to return to "normal"

You can see - return to "normal" - on this graph.

manias-bubbles.jpg

Make sure you withdraw your offer. When they come back to you at the end of next year offer £70,000. It will be obvious to everyone by then that house prices only go down :lol:

Good luck,

BB

Totally agree BB. Our addiction to making a fast buck from property will be difficult to beat - but it will be beaten. It's actions like this which will expose the true weakness of this market -he is probably doing you a favour.

On another note - just saw a fantastic piece of ramping on ITV news this evening! They interviewed one woman whose totally average semi had increased from 135000 in March to 160,000 today! She was 'delighted'. Will the general public ever get it? I doubt it.

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On another note - just saw a fantastic piece of ramping on ITV news this evening! They interviewed one woman whose totally average semi had increased from 135000 in March to 160,000 today! She was 'delighted'. Will the general public ever get it? I doubt it.

Probably "delighted" enough to buy a place in the sun , a couple of buy to lets in Leeds and a Range Rover Sport

:lol::lol:

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Same thing happened to me. I put an offer in below asking and vendor then increased the price by 25K.

I asked estate agent what that was all about and the reply was that the house was getting alot of interest at the amount I offered, but the vendor needed a certain amount (bought at peak and now downsizing) so they increased the price 25k above the amount they needed to sell at........ hoping that someone would think they were getting a bargain if they were able to knock 25k off it.

The house is still 'for sale'................ interesting times ;)

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We put a bid on a house of 10k under the asking price, It was a house in a nice area, which needed gutted from top to bottom, asking price was offers over £100k but we tried our luck with £90k but were told that wouldnt buy it, so 2 days later i called back to see the lie of the land. Well he said, there have been some developments, the owner has raised the price by £30k so the price is now sitting at £130k or offers above, the house needs 40k approx to spend on it and at that stage it would be well overpriced to similiar houses beside it.

What exactly has happened here, the EA undervalueing it? Owner went crazy?

Who raises their asking price by 30k in this climate.

I imagine there are alot of people placing bids at £20k under the asking price (as often advised to do so in here). People always assume the asking price is wrong or deluded. In many cases that may be a correct assumption. However if you placed your house on the market at the correct price (what ever that might be) you are still likely to get offers at £20k under that price. It may be a idea to raise the asking price by £20k as they may still get cheeky offers at £20k under the new asking price.

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I imagine there are alot of people placing bids at £20k under the asking price (as often advised to do so in here). People always assume the asking price is wrong or deluded. In many cases that may be a correct assumption. However if you placed your house on the market at the correct price (what ever that might be) you are still likely to get offers at £20k under that price. It may be a idea to raise the asking price by £20k as they may still get cheeky offers at £20k under the new asking price.

?? Another confusing post Belfast VI.

1. There is a pronounced recession in the economy at large and the property sector is at the fulcrum. N. Ireland in particular has much further to fall to reach affordable residential housing price levels; matched against the modest local economy, salary levels etc.

2. In this environment why advertise a house at a certain (probably inflated price), receive an offer (at a probably realistic price), turn it down and add £25K to the original price?!

Insane bargaining tactics, driven by sheer greed and a totally misguided belief the the local market is going to return to previous daft and unaffordable price levels.

Sellers need to 'get real', buyers need to get educated. Property is a commodity nothing more nothing less.

Edited by blindside

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I imagine there are alot of people placing bids at £20k under the asking price (as often advised to do so in here). People always assume the asking price is wrong or deluded. In many cases that may be a correct assumption. However if you placed your house on the market at the correct price (what ever that might be) you are still likely to get offers at £20k under that price. It may be a idea to raise the asking price by £20k as they may still get cheeky offers at £20k under the new asking price.

I can imagine why the seller thinks that they might be able to get away with it, if they assume that the buyer is an idiot. Anyone buying now after having waited will likely have an idea of what they think is fair value and this tactic will make no difference. Having heard the bids that have been placed on a number of properties recently, no-one is offering near asking prices - the type of people bidding at the moment think they can get a 'bargain' and will see through this tactic straight away.

Edited by shipbuilder

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What is the point of asking prices ? other than making it look like the EA is doing something for their fee

If you want to sell advertise open to offers , if the top offer doesn't match what you want don't sell.

Why ask X for a house the market values @ Y and then cry to anyone who will listen that you " can't sell your house " .

As to the OP's experience you've come across a nut , dear knows what DIY has been done on the house :ph34r:

imo avoid like the plague , there is no shortage of properties on the market.

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What is the point of asking prices ? other than making it look like the EA is doing something for their fee

Well you ask that, but the fact is here we all are analysing the asking price and talking about why they've changed it, trying to get inside the mind of the seller and talking about making offers xx below the asking price. So obviously asking prices exert a strange hold over even experienced HPCers, never mind the general populace. They are important because they provide a psychological 'anchor'. It's just like in the supermarket, if Sainsbury's can convincingly say that the strawberries were once £4.99, then it helps to sell them at 'half price'. Even though nowadays we all suspect that the strawberries were never mean't to be sold at £4.99, it still helps the sales to have that half price sticker.

The best way to beat this anchoring of our thoughts by the VIs is to have our own anchoring in place. Some HPCers use 'peak prices' as an anchor and then go for 50% off or 40% off or whatever. Even that I think is not right because it implies that peak prices represented some sort of reality, and that something less represents some sort of bargain.

I prefer something like the multiple of average income - an anchor actually rooted in the real world. For instance if the house is a normal semi (an 'average' house), then we could say a sensible anchor is 3.5 times average income, lets say £95k. So anything we offer for an average semi should be referenced to that £95k anchor, and the asking price should be ignored. However that is not what happens in practice in 99% of cases, which is why asking prices are so influential.

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I prefer something like the multiple of average income - an anchor actually rooted in the real world. For instance if the house is a normal semi (an 'average' house), then we could say a sensible anchor is 3.5 times average income, lets say £95k. So anything we offer for an average semi should be referenced to that £95k anchor, and the asking price should be ignored. However that is not what happens in practice in 99% of cases, which is why asking prices are so influential.

Good point. Instead of looking at the peak prices we should be concentrating on the fundamentals.

Did any of you watch Property Snakes and Ladders last night?

Merryn Somerset Webb was intervieved and said - when we reach 4 times average income then we will be near the bottom. She also said that average UK income was around £25,000. So house prices still have alot further to fall.

Property Snakes and Ladders really was an excellent show. It was refressing to have a property show that stated so many facts. They talked about the fact that house prices rises were not caused by supply and demand. The rise in prices was due to the availability of credit. Sarah Beeny even mentioned the pent-up supply due to the current low interest rates B) I have set my TV box to record the entire series. :D

Edited by Belfast Boy

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?? Another confusing post Belfast VI.

1. There is a pronounced recession in the economy at large and the property sector is at the fulcrum. N. Ireland in particular has much further to fall to reach affordable residential housing price levels; matched against the modest local economy, salary levels etc.

2. In this environment why advertise a house at a certain (probably inflated price), receive an offer (at a probably realistic price), turn it down and add £25K to the original price?!

Insane bargaining tactics, driven by sheer greed and a totally misguided belief the the local market is going to return to previous daft and unaffordable price levels.

Sellers need to 'get real', buyers need to get educated. Property is a commodity nothing more nothing less.

I thought I was clear. I am sorry you couldn't understand. I was not in anyway defending the actions of the vendor as I have no idea about the house in question or the vendors motives. The poster asked why would someone do this. I offered a suggestion as to what the possible reason may be. Is it a good tactic? - I have no idea. I cant think of any other reason for doing it - can you? I only suggested he is trying to catch his original asking price by attracting a offer £20k under his new asking price. Good luck to him.

You say sellers need to get real. Depends on circumstances. If they need to sell at any price well they need to not only chase the market down but leap-frog it and sell. If not they then have two choices.

1. Take it off the market or

2. Leave it on at the same price and see if anyone bites.- may be waiting quite a while but that is their choice. Misguided, driven by greed? I don't know, perhaps they are just not desperate. Others are and in the future will be and will have to set their sights lower. But there is no point in labelling every vendor out there as driven by greed and misguided and idiots(term used by others). Some of them don't want and dont have to take the lower price. Personally I wish they would just take it off the market.

It costs them nothing with the estate agent or property news to do this. I wish property news charges a monthly fee as this would force alot of these 'not desperate to sell' vendors to take their property off and clear the decks.

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I prefer something like the multiple of average income - an anchor actually rooted in the real world. For instance if the house is a normal semi (an 'average' house), then we could say a sensible anchor is 3.5 times average income, lets say £95k. So anything we offer for an average semi should be referenced to that £95k anchor, and the asking price should be ignored. However that is not what happens in practice in 99% of cases, which is why asking prices are so influential.

Difficulty with that is location. There can be a vast difference in the price of a similar house built in different locations. Usually the average income of the higher priced area is reflective of this, sometimes not. Its one of the dangers with averages ie they are a blend of different prices rather than an ideal price.

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If these tyre kickers would pull out then we would be able to see who is willing to sell and stop wasting time for everyone.

I loved this sentence, not least considering when it is oft used against 'deluded' would-be-buyers.

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I agree with Belfast VI on the reasons behind why someone would do this. I search properties daily as I am a self confessed property nut, although I am not going to buy just yet. I see many wildly overpriced properties sitting on the market and when I ask the agent why this is some have been very frank with me in explaining the psyche behind some of the deluded asking prices from vendors. One agent told me that they have been trying desperately to convince some of their vendors that property prices are down and have explained the reasons behind this and why they wont go up in price for a long time but got a range of responses that bewildered them. If someone is in no rush to sell and feels their house is worth 2007 prices then they would be alot better taking it off the market so that we dont have skewed asking prices eg some 2 bed terraces on at the same price as a 3 bed detached house with garage lol.

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I agree with Belfast VI on the reasons behind why someone would do this. I search properties daily as I am a self confessed property nut, although I am not going to buy just yet. I see many wildly overpriced properties sitting on the market and when I ask the agent why this is some have been very frank with me in explaining the psyche behind some of the deluded asking prices from vendors. One agent told me that they have been trying desperately to convince some of their vendors that property prices are down and have explained the reasons behind this and why they wont go up in price for a long time but got a range of responses that bewildered them. If someone is in no rush to sell and feels their house is worth 2007 prices then they would be alot better taking it off the market so that we dont have skewed asking prices eg some 2 bed terraces on at the same price as a 3 bed detached house with garage lol.

It would be interesting to hear the details on the reasons they are giving. Is it more than Psychological anchor idea mentioned already?

The problem is most people fancy themselves as a 'hard nosed businessman' when it comes to the sale of their house. They think that being tough and simply 'demanding' more will get them more. Many people think like this and think they know sales, but I have met few that can actually do. The secret is in the preparation, if you are not in strong position when you are selling no amount of belligerence will work, unless you find one those few stupid people who have too much money(/credit) and a deflated idea of what they want.

If you are selling in a falling market you are already in a losing position, delaying will most likely see you get less money. I am very glad my offers in early 2008 were turned down, at 25% below asking I was being too generous. Those people will never see as offer as high in the next 20 years probably.

Edited by Ride_on

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I thought I was clear. I am sorry you couldn't understand. I was not in anyway defending the actions of the vendor as I have no idea about the house in question or the vendors motives. The poster asked why would someone do this. I offered a suggestion as to what the possible reason may be. Is it a good tactic? - I have no idea. I cant think of any other reason for doing it - can you? I only suggested he is trying to catch his original asking price by attracting a offer £20k under his new asking price. Good luck to him.

You say sellers need to get real. Depends on circumstances. If they need to sell at any price well they need to not only chase the market down but leap-frog it and sell. If not they then have two choices.

1. Take it off the market or

2. Leave it on at the same price and see if anyone bites.- may be waiting quite a while but that is their choice. Misguided, driven by greed? I don't know, perhaps they are just not desperate. Others are and in the future will be and will have to set their sights lower. But there is no point in labelling every vendor out there as driven by greed and misguided and idiots(term used by others). Some of them don't want and dont have to take the lower price. Personally I wish they would just take it off the market.

It costs them nothing with the estate agent or property news to do this. I wish property news charges a monthly fee as this would force alot of these 'not desperate to sell' vendors to take their property off and clear the decks.

Thanks for the reply; I now see where you are coming from.

Going back to the OP. Trying to interpret why a seller would advertise a property (costing them money) at offers over £100K and then, after receiving an offer below their asking price, slap another £30K on the price in the current market is completely irrational. They could of course be mad, deluded, ill advised by EA, time wasters, or a combination thereof. In my view it is more likely to be primarily driven by greed.

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Some1 earlier stated that roughly 4 times the average income should be essentially the price of an average home - that would equate normal, and therefore we have a bit to go yet before the market bottoms out.

I whole-heartly agree with this but what are the chances the market will bottom out at this level? Aren't a lot of EA touting of peak interest in property and vendors raising asking prices? With the government incentives, stupid sheeple, the media (my arch nemesis) surely there's a good chance the bulls will get their way and the market will "recover" prematurely?

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Some1 earlier stated that roughly 4 times the average income should be essentially the price of an average home - that would equate normal, and therefore we have a bit to go yet before the market bottoms out.

I whole-heartly agree with this but what are the chances the market will bottom out at this level? Aren't a lot of EA touting of peak interest in property and vendors raising asking prices? With the government incentives, stupid sheeple, the media (my arch nemesis) surely there's a good chance the bulls will get their way and the market will "recover" prematurely?

Hold your nerve DD , this is the return to normal .

Just wondering if you reverse your name and had a mate with an itch should HPCer's PM you for non housing advice ;)

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Some1 earlier stated that roughly 4 times the average income should be essentially the price of an average home - that would equate normal, and therefore we have a bit to go yet before the market bottoms out.

I whole-heartly agree with this but what are the chances the market will bottom out at this level? Aren't a lot of EA touting of peak interest in property and vendors raising asking prices? With the government incentives, stupid sheeple, the media (my arch nemesis) surely there's a good chance the bulls will get their way and the market will "recover" prematurely?

I think we have to get away from this idea of average price. It is a statical value, worked out in a not so clear way over a vast number of locations and using a vast range of house types from Apartments to multi million £ houses. It is a very good indicator of the way the market is going. I.e. if there is greater movement in the lower end, first time buyer market the average will fall. If, on the other hand, there is a move in the second hand market, with people moving up, then there will be more transactions at the higher end and this statical average will appear to rise. Doesn't mean houses have gotten more expensive it just means there is more movement in the upper end of the market - even if that movement in transaction level has been caused by a lowering in prices.

The price of a first time house is directly related to both that persons savings and there ability to borrow. The amount they can borrow will be affected by a number of things (ignoring credit history) Firstly the loan to value ratio of the product or another way of putting it is their savings and secondly their ability to repay which is directly linked to their income. In the second time buyer the value of the house they are buying is not directly related to their income. The amount they are borrowing will be after equity (if any) is accounted for. The average second time buyer's house (guessing) may be £220k. This in the majority of cases will have no correlation to his income. If he is selling a house for £160k and has an outstanding balance of £40k then the amount he is borrowing(£100) will have that relationship.

The point I am making is once the second hand or more importantly the movers return to the market the price level (albeit a falling price) will be at a higher ratio to their income than that of first time buyers and this will lift the average price away from the safe income multiplier. I believe this is why the Nationwide only reports on the income to average price ratio of first time buyers. I am not sure but I believe the average house price in that calculation is the universail one which confuses the relevance of the ratio for me. I hope this is not too confusing but it is a point of interest for me.

Secondly what is an average house? To me it is a 3 bed 1,000sq foot semi. I haven't looked at the detail of the latest UUJ report but they do give a break down of house type. You might find that the average house was a 850sq foot 2/3 bed townhouse. That was probably where the majority of sales were in the last quarter. The average house two or three years ago may have been closer to what I consider average (1,000sq foot semi). So are we comparing like with like? I remember a few years ago been surprised that apartment prices in Belfast were reported to be falling by 10-20% when everything else was rising. I looked into it and found that the size of apartments had changed. Gone were the 1,000 sq foot pads and in were the 650 sq foot, what people refer to as shoe boxes. The price per sq foot had went through the roof but in the two quarters the average price of apartments was reported to be falling. Always need to be sure you are comparing like with like as averages don't tell the whole story.

Thirdly, where would you find this average house. Lisburn or Bangor?-No they have always lead the tables and been selling above the NI average. Parts of Belfast yes, but which parts? Forget Stranmillis, never been close to average NI prices, even when the NI price was at a decent multiplier. Strabane-no always have been trading below average, same for most places west of the Bann. So we wont find an average house over there. How about Antrim anyone, it always appeared mid table. Perhaps we can find an average house there. Now what type of house are we looking for?

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... what is an average house? To me it is a 3 bed 1,000sq foot semi.

...that's is what I bought new in 1993 for 3 times my below average income. And my brother bought the same new in 2002 for 4 times his below average income. Then the credit bubble started. Now the credit bubble is being crunched and many people who bought, and are still buying, are going to be trapped in negitive equity for many years to come. That will further constrict market activity in the future.

House prices were at those income levels several times in the past. They will be again in the future. It is all part of the economic cycle. I know, I know... you think it will be different this time. :P

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I think we have to get away from this idea of average price. It is a statical value, worked out in a not so clear way over a vast number of locations and using a vast range of house types from Apartments to multi million £ houses. It is a very good indicator of the way the market is going. I.e. if there is greater movement in the lower end, first time buyer market the average will fall. If, on the other hand, there is a move in the second hand market, with people moving up, then there will be more transactions at the higher end and this statical average will appear to rise. Doesn't mean houses have gotten more expensive it just means there is more movement in the upper end of the market - even if that movement in transaction level has been caused by a lowering in prices.

The price of a first time house is directly related to both that persons savings and there ability to borrow. The amount they can borrow will be affected by a number of things (ignoring credit history) Firstly the loan to value ratio of the product or another way of putting it is their savings and secondly their ability to repay which is directly linked to their income. In the second time buyer the value of the house they are buying is not directly related to their income. The amount they are borrowing will be after equity (if any) is accounted for. The average second time buyer's house (guessing) may be £220k. This in the majority of cases will have no correlation to his income. If he is selling a house for £160k and has an outstanding balance of £40k then the amount he is borrowing(£100) will have that relationship.

The point I am making is once the second hand or more importantly the movers return to the market the price level (albeit a falling price) will be at a higher ratio to their income than that of first time buyers and this will lift the average price away from the safe income multiplier. I believe this is why the Nationwide only reports on the income to average price ratio of first time buyers. I am not sure but I believe the average house price in that calculation is the universail one which confuses the relevance of the ratio for me. I hope this is not too confusing but it is a point of interest for me.

Secondly what is an average house? To me it is a 3 bed 1,000sq foot semi. I haven't looked at the detail of the latest UUJ report but they do give a break down of house type. You might find that the average house was a 850sq foot 2/3 bed townhouse. That was probably where the majority of sales were in the last quarter. The average house two or three years ago may have been closer to what I consider average (1,000sq foot semi). So are we comparing like with like? I remember a few years ago been surprised that apartment prices in Belfast were reported to be falling by 10-20% when everything else was rising. I looked into it and found that the size of apartments had changed. Gone were the 1,000 sq foot pads and in were the 650 sq foot, what people refer to as shoe boxes. The price per sq foot had went through the roof but in the two quarters the average price of apartments was reported to be falling. Always need to be sure you are comparing like with like as averages don't tell the whole story.

Thirdly, where would you find this average house. Lisburn or Bangor?-No they have always lead the tables and been selling above the NI average. Parts of Belfast yes, but which parts? Forget Stranmillis, never been close to average NI prices, even when the NI price was at a decent multiplier. Strabane-no always have been trading below average, same for most places west of the Bann. So we wont find an average house over there. How about Antrim anyone, it always appeared mid table. Perhaps we can find an average house there. Now what type of house are we looking for?

good post mate ;)

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