Shakes Head At Estate Agents Comments

[Converted Lurker]

Local agent has house for sale. We have been watching this house crumble for years as it`s been left vacant. We`ve often talked re. buying it should it become available. Anyhow finally comes onto the market at offers above 300K...300K! A similar style one, although not decrepit, failed to sell at 330K this year, vendors eventually took it of the market. So talking to agent re. offers he informs me that builders have put in offers, but he cannot see any value in it for them, "if they buy it for 275K and spend 50K on it they probably won`t see a profit" Eh? "So if I buy it I would have to pay a builder perhaps 65K `cos he`ll want a profit, so where is my upside?"

"Well you get to do it up over a period of time to your taste and it`s your house"

"No, currently it`s not habitable so to occupy it I`d have to get the work done asap, but surely if you employ perhaps 325K in an investment you `d like to see a return, perhaps 10% for all the effort, so on that basis I should be paying 235K..235K+65K x 10% = 330K"

"Our vendor requires offers circa 300K"

"Ignorance and greed is a very dangerous combination"

Just leaves me stunned, what do I want? The opportunity to upgrade to a bigger house, bigger mortgage, one more bedroom, but am prepared to slave at it to make it work, but cannot get a deal.

Rant over :angry:

[IMD]

I looked at something similar - priced @300k, needed about 70k to make it habitable. Market price on the street stands at about 400k... however I had no faith in this long term. Once the market corrects I think houses in the street will be worth 280k. So i'd not pay more than 200k for the place. EA wouldn't even consider the thought that the price was going to come down longer term.

People are still thinking in terms of peak prices, and will do until you get "CRASH" headlines, which are still a little distant. Only time will tell if they are right or horribly, horribly wrong. But seeing as it's cheaper, even long term, to rent, screw it. Wait. You buy now, you lose. You never buy as it's a 'new paradigm' - you still don't lose.

Alternatively, move to Sydney and take advantage of their crash

Edited September 9, 2005 by IMD

[eek]

Is it mortgagable? If its not in a state where a bank will lend anyone the money for the property as it is then £100,000 would be a hard sell let alone £300,000

[Converted Lurker]

Is it mortgagable? If its not in a state where a bank will lend anyone the money for the property as it is then £100,000 would be a hard sell let alone £300,000

<{POST_SNAPBACK}>

Good point how will it value, you`re right, there will be all sorts of retentions, we`d always hoped that it would be a figure close to 200K, 9 years ago bought this little place, ransacked, but not uninhabitable, restored it, it`d be a wrench selling but with three kids, one an about to be teenage daughter, would like more space. There will be bargains to be had, maybe just sit things out. Agents really don`t do themselves any favours though eh?

As for Sydney

[Nomadd]

"Well you get to do it up over a period of time to your taste and it`s your house"

Yep, that's exactly the response I got many, many years ago when I looked at a property close to where I rent. The place was a dump, and required thousands spending on it. I took a guess at how much it would cost - and the EA doubled that estimate! I then asked why someone would pay such a stupid amount and then spend all that extra time and money on top: answer was the same as you got - "at least it would be to your taste" Mind you, the property market then collapsed for the next 5 years...

Nomadd

[Converted Lurker]

Yep, that's exactly the response I got many, many years ago when I looked at a property close to where I rent. The place was a dump, and required thousands spending on it. I took a guess at how much it would cost - and the EA doubled that estimate! I then asked why someone would pay such a stupid amount and then spend all that extra time and money on top: answer was the same as you got - "at least it would be to your taste" Mind you, the property market then collapsed for the next 5 years... 

Nomadd

<{POST_SNAPBACK}>

Both me and the wife feel a bit trapped, not uncommon particularly on HPC. We`ve been lucky having found our place 9 years ago when the market was flat. Now we want something bigger, just one more bedroom albeit detached, the premium is 100-150K plus. Even selling ours as the market falls further puzzles us as to whether we`ll be any further on.

[fatfreddie]

I looked at something similar - priced @300k, needed about 70k to make it habitable. Market price on the street stands at about 400k... however I had no faith in this long term. Once the market corrects I think houses in the street will be worth 280k. So i'd not pay more than 200k for the place. EA wouldn't even consider the thought that the price was going to come down longer term.

People are still thinking in terms of peak prices, and will do until you get "CRASH" headlines, which are still a little distant. Only time will tell if they are right or horribly, horribly wrong. But seeing as it's cheaper, even long term, to rent, screw it. Wait. You buy now, you lose. You never buy as it's a 'new paradigm' - you still don't lose.

Alternatively, move to Sydney and take advantage of their crash 

<{POST_SNAPBACK}>

In reference to Sydney. The word "MORTGAGEE REPOSSIONS" was aired tonight in reference to West Sydney. The main problems people over strected themselves first on buying and any increase they did get they used the house like a bank, e.g spent the equity. Thus struggling with overheads and bill a high number of people are unable to see the houses for more than they actually owe now and these are being repossesed. Its quite sad.

But main problems are without any major interest rate increases

1) Bought a house for more than they can afford

2) Any increase on the house value thay have borrowed the increased equity and spent it on living expenses with the belief the house will continue up and they are cushioned.

3) Due to high numbers of houses on the market, unable to sell for more than they now owe the bank.

Real estate said they were no Mortgagee Sales during the boom. They are now on the increase.

This is the main killer is that it is has been alot easy to remortgage your house and alot of people have used the equity thus increasing their loans and leaving them no margin for any downfall.

[Elizabeth]

Which part of West Sydney prey tell. Everywhere between Bankstown and Penrith??? This problem is likely to follow the same pattern in Britain once the fall starts - the western suburbs are a bit like 40 kilometres sqr of Leeds but without Leeds level of public transport, urban services, cultural development or life expectations. It is these areas that will be hit first and hardest. Ex-Council will once again become the pariah of the property portfolio.