The View From The Other Side

[Realistic NI EA]

Hi everyone, I have been lurking on these forums for the past 3 years and frequent them almost on a daily basis. I wanted to register so that I could give some insight into what it's like being an estate agent in NI during these times and hopefully convince you that we are not all 'scumbags' as some have stated on here.

My background: I am a partner in an estate agency in a medium sized town outside Belfast. I am in my early 30s and have been running this business for just over 5 years after I graduated from uni and spent a couple of years getting experience with one of the larger EA chains in NI. I have a wife and a baby and we do not own our own house. I decided against buying a property in 2006 when my colleagues were pressurizing me to get on the ladder before prices shot up anymore. I cant claim that I was all knowing and that they were fools (as is now apparent) but even on an above average salary a 3 bed semi was almost 8 times my single income and I didnt believe that was sensible. I decided to use my savings to become a partner in a smaller agency that had a good local reputation and did things the way I thought they should be done. I won't spout a load of idealistic nonsense about how we have higher morals that other estate agencies but I have never resorted to any of the underhand tactics that have been mentioned on these forums.

I just want to say that I am in almost total agreement with most of the comments made by bears on this forum. As you can see from my background, the vast majority of my time spent running an estate agency has been during the housing crash so I have not been sitting around for years taking advantage of the housing bubble to line my pockets. This has forced me to not only work every hour possible to make a living but it has made me one of the most realiistic EAs around. I won't entertain taking a house onto our books if the vendor has unrealistic expectations of its value and when we get an offer that is close to its true value (even if it is way under asking price) I will try to get a deal done so that the vendor can move on and buy something of equal good value elsewhere. The problem is that most of our competitors don't work like this so the market gets flooded with overpriced property and we can rarely negotiate a good deal for our vendors if they want to buy a house that is on with another agent. If every agent woke up and smelt the coffee we would all sell more houses and buyers would get a larger choice of realistically priced properties. The old boys who were making it during the boom years have equally big egos and don't think they should be told what their houses should be valued at by a rival agent so they let their vendor sit in the dark with no chance of a sale. Thankfully their savings are being eaten into as their businesses are losing money at an alarming rate (we check all sales and lettings etc).

If you have any questions then feel free to post them on this thread. I will endeavour to answer them all to the best of my knowledge and ability, cheers.

[getdoon_weebobby]

Welcome. Great to have you onboard !!

[sophia]

Hi there,

thankyou for your interesting post.

A family member of mine can't decide whether to buy or rent atm. Both her and her husband are probably earning 25k between them and they have a 10k deposit (wedding pressie).

They are looking around East Belfast or Newtownabbey.

Would you advise to buy or rent for a year?

[Realistic NI EA]

I also have a vested interest in finding a property that is at value price with a big garden. I'm not looking for anything fancy - no wow factor- whatever that means but I am finding it difficult to find a vendor who wants a realistic price for their property. I am also finding it difficult to find an EA who knows what "market value" means. It's not R.V. + 100K but that seems to be the valuation that appeals to the vendor.

What do you think is "market value" at present with restricted lending and job insecurity. You could use a few examples off your books without giving links to give you away. Just a brief description and your value against R.V..

Thanks for the welcome. I totally agree with your reasons for wanting this market to normalise and I also have a vested interest in seeing it do that, not only for my business but for my family.

Regarding 'market value', there are a few things available but invariably they will be repossessions. For example I have a 4 bed new build bungalow on 1/4 acre site in the countryside that was independently valued by the surveyor at £145,000. This is the price the bank will look to achieve as a minimum. I have a selection of other repossessions from terraces at £60,000 to nice semis in decent areas around town at £95,000. Banks tend to be the most realistic with their expectations for achieving a sale and will allow us to put a house on the market at our opinion of market value. They know there is much more stock to hit the market in the future and they need to shift some of the current stuff before it devalues further. Some of my vendors are great and they see that if they sell now while prices are falling they could sit out for 6 months and buy at a lower price in future, likely upgrading for the same price they sold their house. It may not be the right time for you to buy now as you haven't seen anything that fits the bill for the money you are prepared to pay but that is sure to change in the near future, possibly this year.

[Realistic NI EA]

Hi there,

thankyou for your interesting post.

A family member of mine can't decide whether to buy or rent atm. Both her and her husband are probably earning 25k between them and they have a 10k deposit (wedding pressie).

They are looking around East Belfast or Newtownabbey.

Would you advise to buy or rent for a year?

Not knowing the Belfast market inside out I would still think there are better deals to be had later this year when repossessions surge and interest rates go up. 25k joint income isn't alot so I don't expect their borrowing power to be great so they may be limited to some of the less desirable areas in those parts of the city. The other side of the coin is that rents seem to be staying high in Belfast due huge demand from those who want to buy a house but cant afford to right now. Most on here would probably advise them to rent for another year and build up their deposit, I wouldnt argue too much wiith that unless they can pick up a bargain now.

[Shotoflight]

Hello and welcome. I knew there must be a realistic EA somewhere in Northern Ireland so welcome aboard. It makes a change to have an upfront declaration - most of the EA's we've had on here have hidden their vested interest and that doesn't go down well with me.

I have a plain vested interest in seeing this market normalise so that young people can put down roots, have a family and not have to pay a fortune for it, If it means that some investors or speculators get burnt in the process then that is bonus.

I also have a vested interest in finding a property that is at value price with a big garden. I'm not looking for anything fancy - no wow factor- whatever that means but I am finding it difficult to find a vendor who wants a realistic price for their property. I am also finding it difficult to find an EA who knows what "market value" means. It's not R.V. + 100K but that seems to be the valuation that appeals to the vendor.

What do you think is "market value" at present with restricted lending and job insecurity. You could use a few examples off your books without giving links to give you away. Just a brief description and your value against R.V..

Thanks.

Doccyboy, I'm with you on this. We are told prices are back to 05 - we need to know what this means, for both buyers and sellers. We also need to know if it holds water - what is the evidence of sales at 05 prices? EAs can provide this - they sold houses in 05 and are selling (less) houses now. As stated before the great unwashed cannot access sold prices, then or now (unless you pay £8.50 and strike it lucky at Land Registry) When selling prices reach RV, then we have clarity and an even playing field. It is likewise equally useful to have say RV + 10% or RV -10%.

There will always be outliers to this theory/average from auctions and derelictions at one end, to positive sentiment at the other (fell in love with house/house of my dreams/next door to mammy). People can, of course, sell for as little as they want, or not at all and circumstances differ wildly. However I would suggest RV is robust - all property was (and don't forget is currently) valued using this agreed set of critera which even took into account the view from the property, and engaged local EAs as to recent sold prices in the area. Appeals were a small % (who wants to pay higher rates?) but I'm sure, for its faults, someone from LPS (was VLA) can put up a pretty good case for it (the valuers are professionals and members of RCIS - like many EAs)- either which way, it's all we have. LPS website is a good reference.

Sorry for rambling but you have hit the crux of the matter - the most useful thing realistic EA can do is bring clarity - what are houses selling for, where does this bring us back to and what relationship does each sale have to RV, as this seems to be where we are going and I have no doubt we will move below in very short order. Does realistic EA even use RVs - do EAs actually proactively "value" a property or stick it on for what the seller thinks it is worth?

Last year I was told by a local bank a rule of thumb was RV + 20% Max. Banks are stricter it would appear, less emotional, smarting from fecking things up and not in thrall to sellers but to the risk of default. Last week I asked an EA about a property he valued a week earlier (down from £300k to £250k - RV £170). Did he think my bank would lend me the asking price given the RV? He said no. The house was bought in 2004 for £150k.

So welcome realistic EA, let us know how you value property, what sells, and correlate this to RV. I don't particularly want a bargain, just to sell at market value and buy at market value (currently 05, I believe) - is that too much to ask?

PS from my research, RV seems to have a very strong relationship with the Sq M of a property - just thought I'd add.

[Realistic NI EA]

RV is one of the most important tools we use when valuing a property in this market as it gives a good basis to start from but is not the be all and end all. There are other socio-economic factors that affect house prices in different regions and we have to be clued up to what houses are selling for in our own area. I base my valuations on RV, recent sales prices for similar properties and my own experience. It's easy to value a 3 bed semi in a private development if one a few doors down which is identical sold for £125k last month then that's what someone is willing pay for one, even if the RV is only £110k. I would not be doing the vendor a favour by telling them to put theirs on at £110k now. Same goes for other house types but when there are little to no comparables we have to use RV and our own opinion of what represents market value based on experience.

[eyes wide open]

welcome along, will be very interested in what you have to say

[Shotoflight]

RV is one of the most important tools we use when valuing a property in this market as it gives a good basis to start from but is not the be all and end all. There are other socio-economic factors that affect house prices in different regions and we have to be clued up to what houses are selling for in our own area. I base my valuations on RV, recent sales prices for similar properties and my own experience. It's easy to value a 3 bed semi in a private development if one a few doors down which is identical sold for £125k last month then that's what someone is willing pay for one, even if the RV is only £110k. I would not be doing the vendor a favour by telling them to put theirs on at £110k now. Same goes for other house types but when there are little to no comparables we have to use RV and our own opinion of what represents market value based on experience.

So socio-economic factors, which have presumably worsened since 05, and that nebulous concept 'experience'. Were these factors missing from the 05 reval? Also, the fact one house sells in an estate (development) is no guarantee another will fetch the same price - up or down - or even sell at all. With prices going down 16%pa, in the example above, you may indeed be doing the vendor a favour putting it on at £110k. If it's too low, it could start a bidding war! How long was the other one on the market for before selling at £125k, how many reductions did it have?

I'm not saying the RV is the current value, but even allowing for the (presumably limited) socio economic and experience factors, i.e. since 05, you are bound to be able to still work within reasonable perameters of RV as a baseline or guide (without being definitive, which is probably impossible) . At present, what are they - in your opinion? Also, what weight do you give to the sellers own 'informed' valuation?

[Malthus]

So socio-economic factors, which have presumably worsened since 05, and that nebulous concept 'experience'. Were these factors missing from the 05 reval? Also, the fact one house sells in an estate (development) is no guarantee another will fetch the same price - up or down - or even sell at all. With prices going down 16%pa, in the example above, you may indeed be doing the vendor a favour putting it on at £110k. If it's too low, it could start a bidding war! How long was the other one on the market for before selling at £125k, how many reductions did it have?

I'm not saying the RV is the current value, but even allowing for the (presumably limited) socio economic and experience factors, i.e. since 05, you are bound to be able to still work within reasonable perameters of RV as a baseline or guide (without being definitive, which is probably impossible) . At present, what are they - in your opinion? Also, what weight do you give to the sellers own 'informed' valuation?

Very much agree with you, as i've said before the whole idea of a guide price or valuation is nonsense imho.

A seller puts their house on the market, the highest offer they receive is the market price. If they think the house is worth more they keep it end of story

By the way a big welcome to our realistic EA

[Realistic NI EA]

So socio-economic factors, which have presumably worsened since 05, and that nebulous concept 'experience'. Were these factors missing from the 05 reval? Also, the fact one house sells in an estate (development) is no guarantee another will fetch the same price - up or down - or even sell at all. With prices going down 16%pa, in the example above, you may indeed be doing the vendor a favour putting it on at £110k. If it's too low, it could start a bidding war! How long was the other one on the market for before selling at £125k, how many reductions did it have?

I'm not saying the RV is the current value, but even allowing for the (presumably limited) socio economic and experience factors, i.e. since 05, you are bound to be able to still work within reasonable perameters of RV as a baseline or guide (without being definitive, which is probably impossible) . At present, what are they - in your opinion? Also, what weight do you give to the sellers own 'informed' valuation?

I can see you are trying to pick holes in our valuation methods but the simple fact is there is no exact formula for valuing a property. Qualified surveyors that the banks employ to value houses for mortgage purposes or repossessions use a limited number of criteria when valuing a property including recent sold comparables in the area. Recent comparables are IMHO the best indicator of what a particular type of house is worth right now. I know they are no guarantee that the next house will make the same price but its a fairly good guide. Time on the market is of little relevance to value. If the 3 bed semi was on for 18 months with no buyers but suddenly reduces its price to £130k and sells for £125k while all the others are on at £145k I will be using the £125k figure as my comparable, same as every other surveyor in the area. We are employed to get the best possible price for our vendor in the current market so if the facts back up a realistic sale price of £125k we will market it around that price. I know the old trick of pricing it lower than market value to generate a bidding war. That rarely happens in this market with so few buyers in a position to proceed immediately. The vendor could get one offer of £110k and nothing else. If they put it on at a fair price of £125k and are in no rush there are likely to be people who eventually move into a position to buy following their own house sale or financial situation improvement. The fact is, this isn't an exact science, hence why so many EAs have a bad rep but the best ones use as many factors as possible when valuing property whilst also injecting a sense of realism into their vendors.

[Shotoflight]

I can see you are trying to pick holes in our valuation methods but the simple fact is there is no exact formula for valuing a property. Qualified surveyors that the banks employ to value houses for mortgage purposes or repossessions use a limited number of criteria when valuing a property including recent sold comparables in the area. Recent comparables are IMHO the best indicator of what a particular type of house is worth right now. I know they are no guarantee that the next house will make the same price but its a fairly good guide. Time on the market is of little relevance to value. If the 3 bed semi was on for 18 months with no buyers but suddenly reduces its price to £130k and sells for £125k while all the others are on at £145k I will be using the £125k figure as my comparable, same as every other surveyor in the area. We are employed to get the best possible price for our vendor in the current market so if the facts back up a realistic sale price of £125k we will market it around that price. I know the old trick of pricing it lower than market value to generate a bidding war. That rarely happens in this market with so few buyers in a position to proceed immediately. The vendor could get one offer of £110k and nothing else. If they put it on at a fair price of £125k and are in no rush there are likely to be people who eventually move into a position to buy following their own house sale or financial situation improvement. The fact is, this isn't an exact science, hence why so many EAs have a bad rep but the best ones use as many factors as possible when valuing property whilst also injecting a sense of realism into their vendors.

Just trying to understand the wide variance. RVs may be unsubtle/blunt (though they seem to be comprehensive) and exempt from recent nuances, but what is needed (desirable) is clarity, fact and consistency without opinion, professional or otherwise. All the factors you mention existed in 05, I'm quite sure. I am well aware your comission based business model encourages you to get the highest price for the seller, that is after all your job.

Having said all that, surely you could give a guide of current market value based on RV and recent sales, albeit with many caveats (of your making).

A post on the main board within the last few days, possibly yesterday, linked to an EA on a trade website/blog who succinctly explained the need for correct pricing and the damage done to buyers perceptions if deluded sellers couldn't shift within 6 weeks or so. Cant find it now, it was buried in a thread. It is illuminating if someone could link - sorry.

Thanks, by the way, for your input so far.

[Realistic NI EA]

No problem, I'm here to contribute and hopefully shed a bit of light on the property market from my perspective. I can list off selling prices of various types of houses over the past 3 months that will give you an idea of value for each type but that is only a small sample size and may not be reflected in the area you wish to buy in. For example since the new year we have sale agreed 3 terrace houses in the town, all walking distance to amenities and all ex-council. (3 bed, 1 reception, ofch, dglazing). Agreed at £77k, £65k and £63k. The higher value one was a more desirable estate. Only 2 semis agreed in the last 3 months, private developments, around 15 years old, with detached garages, £128k and £123k. One detached 4 bed bungalow on edge of town but walking distance to town centre, nice private development, one of the nicest around, agreed at £177k. Nothing agreed above that level in last 3 months and last 'big' house sold for £220k, 2700 sqft 5 bed detached in countryside.

The above examples may seem overpriced at the end of the year but we need to wait and see what happens. We can only sell at todays value, not factor in what may happen in the future if rates go up and unemployment increases, although we do make vendors aware of these factors when putting forward an offer to them.

[Shotoflight]

Was it this thread shotoflight?

http://www.housepricecrash.co.uk/forum/index.php?showtopic=159898

BTW RealisticEA - we're not ganging up on you - just looking for answers. Hope you keep posting.

Doccyboy, thats not it sorry. It was a link dug into a thread and other EA's blogged and said they would send it to their sales managers. It related to an EA type mag article and was relevant to the difference in average asking prices v average selling prices. Nothing new, really but just from an unusual source.There was a bit of buyer psychology about putting in an immediate offer to stave off others v no interest in something that has been knocking about, with or without reductions, for months/years. It was encouraging sellers and agents to get real in both pricing and accepting offers quickly.

Anyway, a link with similar sentiment http://www.bbc.co.uk/news/business-12522590 See esp Henry Pryors view.

[Shotoflight]

No problem, I'm here to contribute and hopefully shed a bit of light on the property market from my perspective. I can list off selling prices of various types of houses over the past 3 months that will give you an idea of value for each type but that is only a small sample size and may not be reflected in the area you wish to buy in. For example since the new year we have sale agreed 3 terrace houses in the town, all walking distance to amenities and all ex-council. (3 bed, 1 reception, ofch, dglazing). Agreed at £77k, £65k and £63k. The higher value one was a more desirable estate. Only 2 semis agreed in the last 3 months, private developments, around 15 years old, with detached garages, £128k and £123k. One detached 4 bed bungalow on edge of town but walking distance to town centre, nice private development, one of the nicest around, agreed at £177k. Nothing agreed above that level in last 3 months and last 'big' house sold for £220k, 2700 sqft 5 bed detached in countryside.

The above examples may seem overpriced at the end of the year but we need to wait and see what happens. We can only sell at todays value, not factor in what may happen in the future if rates go up and unemployment increases, although we do make vendors aware of these factors when putting forward an offer to them.

Thanks for the examples. What were their RVs and what % of asking price was achieved? How long were they on the market? How far are you from Belfast?

Have you no work to do

[BelfastVI]

Welcome to the forum and thankyou for being upfront about your background.

Just butting in on the discussions above about valuations. The valuation an agent places on a property is what he/she thinks it will acquire on the open market. You might think that is the same thing as the true value of the property (and it is hard to argue) However, during the boom it is easy to argue that valuers valued and people paid well over what should have been the value of the property. In the downturn some may argue that the valuations by agents are below what the true value of that product should be. It depends what you measure that 'true value' against. In the upturn the valuations bore no relation to the rental yield of the property in the down turn that can be ignored as well, this time the other way.

In my view the value of a property is controlled more by buyer sentiment and availability of credit. When people were high on property porn and the banks were throwing the money at them the values only went one way. When the credit taps were turned off and sentiment soured the values go south. Looking back to a point in time, when you personally believe property was at a 'proper level', if we call it that is a good measure. When you think that was will differ from person to person. We only have one easily obtained measure for that and that is the RV, which took place over a 2 year period and was magically back dated to Jan 2005. Whether you think Jan 2005 was a golden moment when true fair prices were achieved is a personal matter and I will not get into that. What I would say is that firstly the method of gathering this information and the number of unqualified and seperate individuals they had to do this leaves firstly the prices with perhaps no relation to that find winter morning on 1st Jan 2005 and secondly, and more importantly a wide variarty of variance both between similar properties and sometimes no scope between dramatically different properties. If you just compare your rates bill with your neighbours you will get an idea of what I mean. People with a smaller, dramatically older house could be paying quite a bit more than you. Whilst, like me you may be unable to value their house but you can see that one house should be worth dramatically more than the other.

The point I am going a long way about making is some RV may be actually well above what that house would have sold at in 2005 and some may be well below it. Which makes it rather useless as a reference point. It it is an average house, that needs a bit of work then the RV may be ok. If it is a new, well built house or an older house with a good garden and that bit of character then it may well be undervalued at the time. Remember nobody challenged an undervaluation. I didnt on mine even though I knew it was away off. Bit me in the bum when I went to re mortgage as they used it as a source. (still under 60%)

[Shotoflight]

Welcome to the forum and thankyou for being upfront about your background.

Just butting in on the discussions above about valuations. The valuation an agent places on a property is what he/she thinks it will acquire on the open market. You might think that is the same thing as the true value of the property (and it is hard to argue) However, during the boom it is easy to argue that valuers valued and people paid well over what should have been the value of the property. In the downturn some may argue that the valuations by agents are below what the true value of that product should be. It depends what you measure that 'true value' against. In the upturn the valuations bore no relation to the rental yield of the property in the down turn that can be ignored as well, this time the other way.

In my view the value of a property is controlled more by buyer sentiment and availability of credit. When people were high on property porn and the banks were throwing the money at them the values only went one way. When the credit taps were turned off and sentiment soured the values go south. Looking back to a point in time, when you personally believe property was at a 'proper level', if we call it that is a good measure. When you think that was will differ from person to person. We only have one easily obtained measure for that and that is the RV, which took place over a 2 year period and was magically back dated to Jan 2005. Whether you think Jan 2005 was a golden moment when true fair prices were achieved is a personal matter and I will not get into that. What I would say is that firstly the method of gathering this information and the number of unqualified and seperate individuals they had to do this leaves firstly the prices with perhaps no relation to that find winter morning on 1st Jan 2005 and secondly, and more importantly a wide variarty of variance both between similar properties and sometimes no scope between dramatically different properties. If you just compare your rates bill with your neighbours you will get an idea of what I mean. People with a smaller, dramatically older house could be paying quite a bit more than you. Whilst, like me you may be unable to value their house but you can see that one house should be worth dramatically more than the other.

The point I am going a long way about making is some RV may be actually well above what that house would have sold at in 2005 and some may be well below it. Which makes it rather useless as a reference point. It it is an average house, that needs a bit of work then the RV may be ok. If it is a new, well built house or an older house with a good garden and that bit of character then it may well be undervalued at the time. Remember nobody challenged an undervaluation. I didnt on mine even though I knew it was away off. Bit me in the bum when I went to re mortgage as they used it as a source. (still under 60%)

Agree on all the above. Govt. don't always get things right and can tend to do things on the cheap. I'm sure lots of properties were valued "from the office" or by drive by. Sentiment is hard to value though it is certainly different now, in a negative way. Available credit plays a massive (the biggest?) role and again this has contracted. RV is not the be all and end all, neither is 2005 but it is out there and is all we've got and 05 is where reports say we are.. Desirability may also be out of kilter ie bungalows come into or go out of "fashion" or apartments/flats though recent valuations should capture this.

RV's are not even a disputable average, they are a baseline, a snapshot, supposedly using consistent methodology for all domestic properties. It would be impossible to cover all variables.

EA's know what RVs are, they know what sold at what price in 2005 and what sells now & the price. It should be easy to correlate. Not perfect, not always right but a guide, nothing more, nothing less.

And pigs will fly. Because emotion and aspiration, more than logic, is where people and their money (or that of banks) can be parted for profit.

[Realistic NI EA]

Thanks for the examples. What were their RVs and what % of asking price was achieved? How long were they on the market? How far are you from Belfast?

Have you no work to do

I dont know exactly but the prices achieved were all within 5% under asking price and very close to the RV, that shows you when an EA values a property accurately in this market it will achieve close to asking price. As mentioned by Belfast VI above RVs are not always the best thing to base a valuation on as one property I recently valued at 85k had a RV of 115k and I've seen this a few times before.

PS I actually had alot of work on today as I managed to agree 2 sales but there are often lulls during the day when you have a spare 15 minutes to chat with fellow HPCers. I wish I was so busy that I couldnt stop but those days are far away for every EA and im content with my work load now (It's busier than most). I wont go into exact details of the sales achieved today but they follow the trend mentioned above, close to RV but still over it and on one occasion full asking price was achieved.

Right, im off to get the baby to bed lol.

[NuBrit]

I wanted to register so that I could give some insight into what it's like being an estate agent in NI during these times and hopefully convince you that we are not all 'scumbags' as some have stated on here.

Fair play for coming on. I wholeheartedly agree that estate agents are often unfairly tarred with the same brush. Most are genuine and hard-working people who are trying to do the best for their clients (really!).

[NuBrit]

EA's know what RVs are, they know what sold at what price in 2005 and what sells now & the price. It should be easy to correlate. Not perfect, not always right but a guide, nothing more, nothing less.

People talk about RV, but it's important to remember that we have had 6 years of CPI inflation since 2005. If we compound the inflation from then we're looking at about ~25-30%. That means the "real" rateable value of a £100k house is more like £125-130k today. If RV is the selling price today, in real terms, we're probably back to 2002-2003 prices.

[Shotoflight]

I dont know exactly but the prices achieved were all within 5% under asking price and very close to the RV, that shows you when an EA values a property accurately in this market it will achieve close to asking price. As mentioned by Belfast VI above RVs are not always the best thing to base a valuation on as one property I recently valued at 85k had a RV of 115k and I've seen this a few times before.

PS I actually had alot of work on today as I managed to agree 2 sales but there are often lulls during the day when you have a spare 15 minutes to chat with fellow HPCers. I wish I was so busy that I couldnt stop but those days are far away for every EA and im content with my work load now (It's busier than most). I wont go into exact details of the sales achieved today but they follow the trend mentioned above, close to RV but still over it and on one occasion full asking price was achieved.

Right, im off to get the baby to bed lol.

Thanks for the detail and taking the time to contribute. It appears your sales are for realistically priced houses close to, but still slightly above, RV. Good on you and with this realistic approach, i hope your success continues.

Moving away from values and prices, I'm sure you have much else to contribute. What about sentiment - from customers and within the industry ie EAs, banks, Govt. Your views on Nama, interest rates,etc. Property as an investment? Your strategy, going forward in terms of achieving sales. What makes your work easy/difficult. What circumstances would you need before you bought, if any. What other tricks does the trade use?

And finally, what is the opposite of "priced to sell"?

[Shotoflight]

People talk about RV, but it's important to remember that we have had 6 years of CPI inflation since 2005. If we compound the inflation from then we're looking at about ~25-30%. That means the "real" rateable value of a £100k house is more like £125-130k today. If RV is the selling price today, in real terms, we're probably back to 2002-2003 prices.

True and a good point.

It was easier to get your hands on a couple of hundred grand for a house then though. We're starting to get back to real money again, ie hard earned and verified.

Many think 05 was mid bubble as well, vastly overpriced as a multiple of average NI wages. I believe it's back to 02 prices in the Republic and still moving backwards. Where will we end up?

Edited February 22, 2011 by Shotoflight

[NuBrit]

I think we've gone from the crazy bubble stage, to where prices are just reasonably overpriced. I think fair(ish) value should be something like (discounting a few areas that almost command a premium) ...

£50-70k - 2-3 bedroom house in remote/less salubrious area

£70-90k - 3 bedroom semi in average area

£90-110k - small 3 bed detached in average area

If credit continues to dry up though, we could see prices undershoot what I consider fair(ish) value. Perhaps prices will stand still for 5 years, meanwhile, we could have 3-5% of inflation reducing houses prices in real terms every year.

[Realistic NI EA]

Thanks for the detail and taking the time to contribute. It appears your sales are for realistically priced houses close to, but still slightly above, RV. Good on you and with this realistic approach, i hope your success continues.

Moving away from values and prices, I'm sure you have much else to contribute. What about sentiment - from customers and within the industry ie EAs, banks, Govt. Your views on Nama, interest rates,etc. Property as an investment? Your strategy, going forward in terms of achieving sales. What makes your work easy/difficult. What circumstances would you need before you bought, if any. What other tricks does the trade use?

And finally, what is the opposite of "priced to sell"?

Good morning, I will quickly reply to your points before I go off to my first valuation today.

Sentiment, now I could write a book about the varying opinions from the public who come into my office and from my vendors. As you can imagine sentiment from potential buyers is that the world is about to end tomorrow so they are not prepared to pay the prices being asked for. I get quoted articles from newspapers and online forums about how bad the economy is and interest rates, job losses etc. I know all this and more but I do enjoy chatting with the more informed ones. Sentiment from my sellers is beginning to turn towards the stark reality of where we are in the economy, hence our ability to get some deals done at close to RV. There will always be some who think their little semi is better than the one up the road that sold for 30k less than theirs in on the market for but thankfully we are eradicating these from our books after a frank conversation. It makes no sense as a business to have unsellable stock on our books as it wastes time and money carrying out viewings that may generate a fair offer but the vendor is in cloud cuckoo land about what they think it's worth.

Sentiment from other EAs seems to range from we are in a desperate situation but there's nothing we can do about it (sit and wait till it comes good because we have a load of money to back us up) to the other end where they are being very brash with vendors, telling them to reduce prices or take the house off the market. We handled it in a more controlled manner, gradually having conversations with all our vendors about the state of the market and providing them with examples of recently sold properties as a comparable. Now thats done, we can control the asking prices of any new stock that comes onto our books which is good for buyers and good for business. I really dont know too much about sentiment from banks and the government as we dont get much help from either.

I dont think Nama will have the impact on residential property that some people think as most of the loans held are for large land banks that wont be built on for years, if ever, not portfolios of property. Repossessions will have a much larger impact on house prices across the province.

I'll talk about our strategy in more detail another time but its a simple case of pricing properties right, always keeping vendors informed about the state of the market and trying entice more people to use us as opposed to our competitors who will value their property at a higher price. We can try to be the white knights of the property market but if someone is gullible enough to accept the highest valuation then we can often do little about that. Their property will sit idle until the EA tells them it's too expensive and asks for a reduction. I knew of one agent who would tell the vendor what they wanted to hear just so they could get the instruction, then wait 3 months after no viewings to tell them the market had dropped dramatically and get them to reduce it to a more sellable price.

My work is always challenging but I have to say I really enjoy it. I see so many different people, most of which are very friendly and trusting and need my help. They place a huge amont of trust in the agent and it's scandalous that some agents sit back and do very little once the the property comes on the market. How do you ever expect to get paid??! Don't get me started about crap brochures and online listings lol.

If it's not priced to sell then it's priced to sit on the market until they take it off, reduce it or the bank turns the screw.

[pajd]

Good morning, I will quickly reply to your points before I go off to my first valuation today.

Sentiment, now I could write a book about the varying opinions from the public who come into my office and from my vendors. As you can imagine sentiment from potential buyers is that the world is about to end tomorrow so they are not prepared to pay the prices being asked for. I get quoted articles from newspapers and online forums about how bad the economy is and interest rates, job losses etc. I know all this and more but I do enjoy chatting with the more informed ones. Sentiment from my sellers is beginning to turn towards the stark reality of where we are in the economy, hence our ability to get some deals done at close to RV. There will always be some who think their little semi is better than the one up the road that sold for 30k less than theirs in on the market for but thankfully we are eradicating these from our books after a frank conversation. It makes no sense as a business to have unsellable stock on our books as it wastes time and money carrying out viewings that may generate a fair offer but the vendor is in cloud cuckoo land about what they think it's worth.

Sentiment from other EAs seems to range from we are in a desperate situation but there's nothing we can do about it (sit and wait till it comes good because we have a load of money to back us up) to the other end where they are being very brash with vendors, telling them to reduce prices or take the house off the market. We handled it in a more controlled manner, gradually having conversations with all our vendors about the state of the market and providing them with examples of recently sold properties as a comparable. Now thats done, we can control the asking prices of any new stock that comes onto our books which is good for buyers and good for business. I really dont know too much about sentiment from banks and the government as we dont get much help from either.

I dont think Nama will have the impact on residential property that some people think as most of the loans held are for large land banks that wont be built on for years, if ever, not portfolios of property. Repossessions will have a much larger impact on house prices across the province.

I'll talk about our strategy in more detail another time but its a simple case of pricing properties right, always keeping vendors informed about the state of the market and trying entice more people to use us as opposed to our competitors who will value their property at a higher price. We can try to be the white knights of the property market but if someone is gullible enough to accept the highest valuation then we can often do little about that. Their property will sit idle until the EA tells them it's too expensive and asks for a reduction. I knew of one agent who would tell the vendor what they wanted to hear just so they could get the instruction, then wait 3 months after no viewings to tell them the market had dropped dramatically and get them to reduce it to a more sellable price.

My work is always challenging but I have to say I really enjoy it. I see so many different people, most of which are very friendly and trusting and need my help. They place a huge amont of trust in the agent and it's scandalous that some agents sit back and do very little once the the property comes on the market. How do you ever expect to get paid??! Don't get me started about crap brochures and online listings lol.

If it's not priced to sell then it's priced to sit on the market until they take it off, reduce it or the bank turns the screw.

What a breath of fresh air. Good post