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trickydicky79

Refusing To Accept That House Prices Have Dropped

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A friend had his flat valued around spring 2008 (when the house price falls were starting to hit the headlines). Three local estate agents came round; two 25 year-old ‘wiseguys’ and one middle-aged EA. The last EA actually owned their own agency and had been an EA for around 25yrs (and started laying off staff, hence why they were doing the leg work!).

The two 25 year-olds (who’d obviously never known anything other than HPI’s), spent around 5-mins looking around the flat with their hands in their pockets, before coming up with valuations of 160-165k (this is for a 2-bed flat!). this was closely followed by them spouting all sorts of crap about supply & demand and how the looming HPC wasn’t to be believed.

Anyway, the other more ‘seasoned’ EA gave a valuation, priced in her opinion to sell quickly, at 145k. She was the only one to give any reasoning; flats harder to sell above this price, 2-bed houses available in the area for the 160k mark (which he would find very difficult to compete with), market sentiment, etc.

my mate was furious, saying she knew f*** all and how dare she value his place so low. I had to bite my lip to prevent me saying, “she’s the only one to give any reasoning behind their valuation, she’s been a local agent for over 25 years, runs her own business and is old enough to have seen HPC in the past, she’s clearly worried about another HPC and is pricing your place fairly in order for you to sell quickly. She’s clearly not touting for your business as she still gave her lower valuation even after you told her what the two fcukwits had valued the flat at. I know who I’d believe!â€.

Anyway, he didn’t put it on the marker in then, but has done now (first went on in June/July 09); He got just one of the agencies (that’s one of the pair that had given him the high values last time) to come around, and bunged it on at 159,950.

One month = no viewings

Dropped the asking price by 5k

To date, a few viewings = No offers.

He offered it to me for 145k, (he paid 130k around 5 years ago).

Unsurprisingly, I said no.

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A friend had his flat valued around spring 2008 (when the house price falls were starting to hit the headlines). Three local estate agents came round; two 25 year-old ‘wiseguys’ and one middle-aged EA. The last EA actually owned their own agency and had been an EA for around 25yrs (and started laying off staff, hence why they were doing the leg work!).

The two 25 year-olds (who’d obviously never known anything other than HPI’s), spent around 5-mins looking around the flat with their hands in their pockets, before coming up with valuations of 160-165k (this is for a 2-bed flat!). this was closely followed by them spouting all sorts of crap about supply & demand and how the looming HPC wasn’t to be believed.

Anyway, the other more ‘seasoned’ EA gave a valuation, priced in her opinion to sell quickly, at 145k. She was the only one to give any reasoning; flats harder to sell above this price, 2-bed houses available in the area for the 160k mark (which he would find very difficult to compete with), market sentiment, etc.

my mate was furious, saying she knew f*** all and how dare she value his place so low. I had to bite my lip to prevent me saying, “she’s the only one to give any reasoning behind their valuation, she’s been a local agent for over 25 years, runs her own business and is old enough to have seen HPC in the past, she’s clearly worried about another HPC and is pricing your place fairly in order for you to sell quickly. She’s clearly not touting for your business as she still gave her lower valuation even after you told her what the two fcukwits had valued the flat at. I know who I’d believe!â€.

Anyway, he didn’t put it on the marker in then, but has done now (first went on in June/July 09); He got just one of the agencies (that’s one of the pair that had given him the high values last time) to come around, and bunged it on at 159,950.

One month = no viewings

Dropped the asking price by 5k

To date, a few viewings = No offers.

He offered it to me for 145k, (he paid 130k around 5 years ago).

Unsurprisingly, I said no.

Where is the flat?

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Bristol area (though not city).

So would it be too far out to say it may be worth about 60k? I fear the boat has sailed on people hoping to shift houses at bubble prices. I really believe a lot of stuff in the UK will become unsellable (new-build, rough area etc.) except to councils (if they still have funding) or at rock bottom prices.

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I doubt it would go that low (it’s not a new build, is in good order, and is about a good as you can get for a flat in the area), and it would probably sell if priced correctly.

Trouble is, even at the ‘reduced’ price, you can get a 2-bed house in the area. I always considered expensive flats being the preserve of fashionable city centres or waterfronts (neither of which appeal to me). When you’re in the suburbs people expect (and want) a house, with the garden/garage etc that comes with it.

I think if he’s serious about selling he’ll have to accept breaking-even on what he paid a few years ago. Trouble is, he’s already said he’ll not drop the price further and will only settle for almost the full asking price.

He’s planning his next move already, including making offers on houses himself, and seems undeterred about not one offer in over 2 months for his place!

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. Trouble is, he’s already said he’ll not drop the price further and will only settle for almost the full asking price.

He’s planning his next move already, including making offers on houses himself, and seems undeterred about not one offer in over 2 months for his place!

As the nights draw in, the leaves fall, and the phone doesn't ring - he will learn, he will learn...

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I always considered expensive flats being the preserve of fashionable city centres or waterfronts (neither of which appeal to me). When you’re in the suburbs people expect (and want) a house, with the garden/garage etc that comes with it.

I think if he’s serious about selling he’ll have to accept breaking-even on what he paid a few years ago.

Here Here !!! I tought it was a bit strange when they started selling "town houses" 5 miles outside the Northampton town center for 400k !!! People put of town want gardens, space, parking easy lives, not shoe boxes miles from anywhere in terraces, no gardens and nowhere to park.

Greedy developers selling high-priced s**t to low-i.q. idiots.

Do your friend a favour and tell him straight, flats dont sell, they have halved in value (at least ) at auction, he's bought into a dream.

Any agent that values a house at the same price as last year knowing what we all know, i.e. 20% down FACT, must just be stupid, greedy or stupid and greedy.

Edited by TheCountOfNowhere

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Guest KingCharles1st

basically-Your mate is a total prat of the highest order

He has blown it though- because when the advertised price drops like a stone down a well, anyone who has been looking at this property, will now be wondering why it has dropped in price so much.. :(

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We bought a 2 bedroom new build flat in Kent as a BTL investment (boo hiss!) back in 2005, paid around 126k for it. We managed to get OK tenants on and off (couple short voids) but barely made a profit on the rent after management agent's fees.

Then we discovered this website in 2007 and whacked it onto the market pronto for 147k in autumn 2007 (agent valued it at 150 but we were aware of the impending HPC by then and wanted out). By a miracle a BTL buyer came along and offered 145k within a week - we accepted but had some hairy moments coming up to exchange of contracts in Feb 2008 as 2 of his mortgage offers were withdrawn as the banks started to fail/panic. He tried to haggle 20k off 2 days prior to exchange but we called his bluff as we guessed he had paid a mortgage fee and survey fees. Made it by the skin of our teeth and the feeling of relief was huge.

I just checked Zoopla and saw that we acheived the highest EVER sale value in the entire block of new builds. The bad news is for the investor - zoopla estimates his current value to be just 118k - so he has lost on paper a whopping 27k in 19 months! He has lost 1421 pounds per month, which is probably about the same as his Kent salary. Poor sod.

So why don't you check your mate's pad on Zoopla to get the estimated current value? It is free. Post it on here

Yours smugly

CB

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So why don't you check your mate's pad on Zoopla to get the estimated current value? It is free. Post it on here

Just bunged it on Zoopla, £139,600, which I think is probably fair (for now.....?)

Thing is, I think he's missed the boat now by pricing too high. It's unlikely to generate much more interest during the winter, and with further falls to come.....?

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Just bunged it on Zoopla, £139,600, which I think is probably fair (for now.....?)

Thing is, I think he's missed the boat now by pricing too high. It's unlikely to generate much more interest during the winter, and with further falls to come.....?

Well done. Looks like he is doomed as you say - the biggest problem with modern flats is the massive annual charges (maintenance and ground rent) which are seldom below a grand per year and often closer to 1500 or more. On top of that, the maintenance and management is rarely done well if at all and it all gets very sad and nasty. Example - in our sub 3 years of ownership of the flat the outside windows were not cleaned once (3rd floor) and the management company changed hands 3 times. We were paying well over a grand per year and window cleaning was included (along with th pretty flower beds which never arrived, sporadic hall cleaning etc). Nobody will touch flats now except the old fashioned 20 quid per year ground rent leaseholds and even then only if the lease is long.

Your mate will be lucky to get 60-80k if he can even go that low, he is chasing down the curve to oblivion - what is his equity in the property?

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Well done. Looks like he is doomed as you say - the biggest problem with modern flats is the massive annual charges (maintenance and ground rent) which are seldom below a grand per year and often closer to 1500 or more. On top of that, the maintenance and management is rarely done well if at all and it all gets very sad and nasty. Example - in our sub 3 years of ownership of the flat the outside windows were not cleaned once (3rd floor) and the management company changed hands 3 times. We were paying well over a grand per year and window cleaning was included (along with th pretty flower beds which never arrived, sporadic hall cleaning etc). Nobody will touch flats now except the old fashioned 20 quid per year ground rent leaseholds and even then only if the lease is long.

Your mate will be lucky to get 60-80k if he can even go that low, he is chasing down the curve to oblivion - what is his equity in the property?

Agree with you about BTL new build flats being a poor investment.... but this guy is an owner occupier isnt he?

So its not really doom/oblivion is it?

As long as he can pay the mortgage he's fine, he just cant move until he gets the price he can/will accept...

Might mean he's stuck there for a decade but its not as if he's losing a limb...

I remember when this happened in the early 90s and people just stayed put mainly

A few people lost their jobs and got repossesed, they were the ones who actually suffered, but their numbers were relatively small

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A friend had his flat valued around spring 2008 (when the house price falls were starting to hit the headlines). Three local estate agents came round; two 25 year-old ‘wiseguys’ and one middle-aged EA. The last EA actually owned their own agency and had been an EA for around 25yrs (and started laying off staff, hence why they were doing the leg work!).

The two 25 year-olds (who’d obviously never known anything other than HPI’s), spent around 5-mins looking around the flat with their hands in their pockets, before coming up with valuations of 160-165k (this is for a 2-bed flat!). this was closely followed by them spouting all sorts of crap about supply & demand and how the looming HPC wasn’t to be believed.

Anyway, the other more ‘seasoned’ EA gave a valuation, priced in her opinion to sell quickly, at 145k. She was the only one to give any reasoning; flats harder to sell above this price, 2-bed houses available in the area for the 160k mark (which he would find very difficult to compete with), market sentiment, etc.

my mate was furious, saying she knew f*** all and how dare she value his place so low. I had to bite my lip to prevent me saying, “she’s the only one to give any reasoning behind their valuation, she’s been a local agent for over 25 years, runs her own business and is old enough to have seen HPC in the past, she’s clearly worried about another HPC and is pricing your place fairly in order for you to sell quickly. She’s clearly not touting for your business as she still gave her lower valuation even after you told her what the two fcukwits had valued the flat at. I know who I’d believe!â€.

Anyway, he didn’t put it on the marker in then, but has done now (first went on in June/July 09); He got just one of the agencies (that’s one of the pair that had given him the high values last time) to come around, and bunged it on at 159,950.

One month = no viewings

Dropped the asking price by 5k

To date, a few viewings = No offers.

He offered it to me for 145k, (he paid 130k around 5 years ago).

Unsurprisingly, I said no.

Well the three agents came to the viewings with two different strategies probably:

- Young ones: tease the vendor with a high potential price to get them to sign up to the firm and nudge down their expectations later to get a sale

- Old one: see if the vendor will go for a price the property will easily sell for

If the EAs are acting rationally (which they should be), the price they will SAY they can get, will be driven more by their desire to have new stock to offer rather than what they think the property is actually worth...

The young agents were trying to maximise their stock, acting rationally to try to hang onto their jobs

The old agent (with her own business) just wanted to maximise her profitability by setting a price she could easily sell the property for quickly...

...the message is to stop thinking that "an estate agents valuation" isnt more driven by their own personal agendas, rather than what the actual price a property can sell for is

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Agree with you about BTL new build flats being a poor investment.... but this guy is an owner occupier isnt he?

So its not really doom/oblivion is it?

As long as he can pay the mortgage he's fine, he just cant move until he gets the price he can/will accept...

Might mean he's stuck there for a decade but its not as if he's losing a limb...

I remember when this happened in the early 90s and people just stayed put mainly

A few people lost their jobs and got repossesed, they were the ones who actually suffered, but their numbers were relatively small

That was me - bought a 2 bed flat in 88 (70k 100% mortgage) then watched it slide to 38k value but still unselleable 3-4 years later (not that I could have sold it for any amount anyway, being stuck in NE). Kept my job and was in negative equity, trapped and unable to move until the new millenium (14 years, was stir crazy when finally released from NE by the boom*).

So you are correct in that oblivion was too strong a word, instead "seething writhing hell-hole of a self-imposed financial prison" might have been a better predictive for Tricky Dicky's mate's predicament :lol:

* yes I was living proof of the short memory/blind greed of boom and bust victims - even though I had suffered 10 years of NE before, I still persuaded my wife to co-invest in the boom-time flat in 2005. Luckily this time around I escaped, but never again will we buy at peak or near peak prices. Sometimes being lucky can teach lessons as well as unlucky.

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That was me - bought a 2 bed flat in 88 (70k 100% mortgage) then watched it slide to 38k value but still unselleable 3-4 years later (not that I could have sold it for any amount anyway, being stuck in NE). Kept my job and was in negative equity, trapped and unable to move until the new millenium (14 years, was stir crazy when finally released from NE by the boom*).

So you are correct in that oblivion was too strong a word, instead "seething writhing hell-hole of a self-imposed financial prison" might have been a better predictive for Tricky Dicky's mate's predicament :lol:

* yes I was living proof of the short memory/blind greed of boom and bust victims - even though I had suffered 10 years of NE before, I still persuaded my wife to co-invest in the boom-time flat in 2005. Luckily this time around I escaped, but never again will we buy at peak or near peak prices. Sometimes being lucky can teach lessons as well as unlucky.

Yes I can quite see that situation happening to millions of new build slave box owners

Indeed, many of them are in it at the moment, but the reality of it is slowly dawning on them, just like "Tricky Dicky's mate"

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