Father-in-law Selling House (for A Year)

[Portent]

My mothers new partner has had his house on the market for a year now. It's a little village in Essex near Clacton and there have been only four viewers in a year. He's moving it to another agent and I was discussing the price with him. I didn't put forward my views of where the market was headed but he should know them by now. What I did discuss was how he came to the price he's got it on for and the price he will put it on for with the new agent.

He's based the price on the other houses which "sold" in the area. When I asked a little further he said they were the prices in the paper. I pointed out these were not the prices for which the houses sold and were simply the prices the vendor wanted. In many cases they too may have had it on the market for some time. I suggested his price may be a little high since it's not sold yet and there have been few viewings but he countered with a report on house prices expected to rise by 6% in the area by June 2006. He wasn't able to give any more details about what the report was based on or who issued it but was adamant they would definititely rise. It seems he's read something and now believes it to be gospel. I also explained why average house prices could rise if the bottom rung collapses.

He's selling the house and not buying another (they are selling both houses and then buying abroad). So I then surprised him by working out how much interest he could have made on the house money had be reduced the price earlier and put it in a high interest account, or better still, invested it. I pointed out he'll soon have to pay council tax again which I factored into the figures too. At this point it was plain to see that had he lowered the price early then he would probably have sold the house by now and also be financially better off.

When it came to deciding a new price for the house when he changes agents he insisted he needed a margin to allow for the price being beaten down. This is true of course but people aren't stupid anymore. They will either not see the house at all or simply offer less if it's overpriced. He also insisted it was worth x and would not reduce the price by more than a few thousand. His next statement was that he had to sell to get on with life. When I asked what would happen if someone came in with a low bid his answer was that he'd have to consider it but simply wouldn't sell below x because that's what it's value was and he needed as much as possible. He didn't seem to acknowledge that a house is only worth what a buyer will pay and not what the seller wants.

He's a really nice man and is the sort of person who gives things away. He's very kind hearted. But my mother said he gets really stubborn about the price of the house and won't consider a drop - yet they both really need to sell it. It's a touchy subject with him it seems.

From this anecdotal it's clear that sellers are not yet at the stage where they will drop prices and despite having almost no viewing he still clings to the notion of it being worth what he wants or needs. The village was littered with For Sale signs.

[AteMoose]

try showing him nethouseprices.com

[Portent]

try showing him nethouseprices.com

Sadly there was no internet connection but I have suggested it.

[iLegallyBlonde]

Tell him we turned down an offer of £282k when our house was for sale at £315 in August 2004, we've just accepted £250k.

The market is going down, there is no doubt whatsoever.

[frugalista]

2 questions:

- is it a "good house" in a "good area"?

- it has been on the market for a year. Is this "holding up" their lives?

frugalista

[SarahBell]

Sadly there was no internet connection but I have suggested it.

do one and print!

[Portent]

do one and print!

He lives 2.5hrs drive from me... so I'll do one and post

[MarkG]

He's a really nice man and is the sort of person who gives things away. He's very kind hearted.

Hate to say it, but from here he sounds like a greedy idiot. Odds are he's seen the price increase by a six-figure sum in the last few years by doing nothing and now he's arguing over a few thousand? People like him will follow the market to the bottom through their own greed.

Edited December 27, 2005 by MarkG

[Levy process]

The village was littered with For Sale signs.

Well, I'm not usually one to make that much of anectodals, but I just drove through a Buckinghamshire village near High Wycombe today. It seemed like every third house had a for sale sign up outside it. It was truely bizzare. It really was like people wanted to leave because they thought an asteroid was going to land on the place or something. Weird. Crashy-crashy-crashy!

My mothers new partner has had his house on the market for a year now.

Is a house really "on the market" if it has been "on the market" for a year? A year is a very long time in my opinion to sell anything. In what sense are these things really "on the market", any more than my 5 year old Ford Focus would be "on the market" if I put a sign in the back window saying "offers over 1 million pounds"? If the price is realistic for "the market" then surely it will sell in way less than a year?

[libitina]

Well, I'm not usually one to make that much of anectodals, but I just drove through a Buckinghamshire village near High Wycombe today. It seemed like every third house had a for sale sign up outside it. It was truely bizzare. It really was like people wanted to leave because they thought an asteroid was going to land on the place or something. Weird. Crashy-crashy-crashy!

Can't say I blame them. I hated living just outside High Wycombe. *shudders*

[Converted Lurker]

The phrase "bottom rung" sounds so negative try using "firstrung", it sounds a bit more positive Interesting point re. no web access, huge educational reference point IMHO that he and millions of others fail to use to get relevant facts and informed opinion.

[Portent]

2 questions:

- is it a "good house" in a "good area"?

- it has been on the market for a year. Is this "holding up" their lives?

frugalista

Sorry I missed this earlier...

1) The house is a three bed semi in a quiet area (mostly holiday homes and retirement cottages). So being a family home could be a disadvantage. But the house is in good condition, well decorated, and the area is reasonably desirable, being by the sea.

2) Yes it is holding up their lives. Once this is sold they want to sell hers too and then buy something together (probably in France).

[right_freds_dead]

despite your descriptions of him being kind hearted ect.

i dont think he really is. he sounds like just another greedy grabber whos 'missed the free gravy boat of 04'.

too bad. he'll never get to france by the sound of it. hes too stubborn to pay for it my his own means.

classic boomer example.

[Portent]

despite your descriptions of him being kind hearted ect.

i dont think he really is. he sounds like just another greedy grabber whos 'missed the free gravy boat of 04'.

too bad. he'll never get to france by the sound of it. hes too stubborn to pay for it my his own means.

classic boomer example.

Well I do kind of agree with you. But it shows how most people feel about property: they can be as nice as pie and completely logical in most subjects but simply refuse to accept prices can't be sustained. The lesson to me from this is that (a) the falls will take longer to occur than I'd like, ( they could be hard when they do occur.

Incidentally my mother was trying to persuade him to drop the price and sell. She realises how much they bought their properties for in the first place. Oh and I just realised he's my step-father rather than father-in-law (oops).

[right_freds_dead]

its not complicated. its just plain old greed.

he doesnt want to let go of conceived wealth. hes built his future plans on this big free bounty.

if he had to rely on his price paid + regular inflation he wouldnt probably be in a position to move to france.

this is going on all over the uk right now. my mates mums the same. no pension. no savings, but has a £45k (1997) council house shes going to somehow now sell for £140k. only its been on 1.5 years with no viewings. yet they cant move on for any less -

"oh, im not giving it away" was the classic quote there.

and suprise suprise - shes a boomer !!

[frugalista]

Sorry I missed this earlier...

1) The house is a three bed semi in a quiet area (mostly holiday homes and retirement cottages). So being a family home could be a disadvantage. But the house is in good condition, well decorated, and the area is reasonably desirable, being by the sea.

I see, sounds like a nice home in an area with no jobs. Deadly unless he gets out soon.

2) Yes it is holding up their lives. Once this is sold they want to sell hers too and then buy something together (probably in France).

Hmm, so it's a choice of hanging around trying to screw money out of some poor suckers or spending a year in lovely france. Tell him life's too short, ffs!

'scuse my french.

frugalista

[Rave]

2) Yes it is holding up their lives. Once this is sold they want to sell hers too and then buy something together (probably in France).

So did I miss the news about massive property price inflation in France? Or could he sell his property for 20% less than he's currently asking and still buy an amazing place, with change left to live on?

Seriously, it interests me, because I personally have witnessed fairly stupid inflation in southern Spain on my annual holiday which I had assumed was a knock on effect of our hyperinflated market. I didn't know it had infected the rest of Europe though....

[Guest Winners and Losers]

I drove past an absolutley beautiful house last night (in Guisborough) - it has been on the market since May. Still for sale. I also have a friend who turned down an offer of 100k on a studio flat in London and is now trying to get 125k - ha, ha, ha, gufaw, gufaw....

Tell him we turned down an offer of £282k when our house was for sale at £315 in August 2004, we've just accepted £250k.

The market is going down, there is no doubt whatsoever.

[Badlad1967]

So did I miss the news about massive property price inflation in France? Or could he sell his property for 20% less than he's currently asking and still buy an amazing place, with change left to live on?

Seriously, it interests me, because I personally have witnessed fairly stupid inflation in southern Spain on my annual holiday which I had assumed was a knock on effect of our hyperinflated market. I didn't know it had infected the rest of Europe though....

There has been HPI in France. Some of it, no doubt, fueled by HPI in the UK. The second homes market has boomed (pricing out locals, and there have been news items about this) but will no doubt drie up before too long...

But there have been large rises around the Calais area (totally depressed cr@phole!) as it is a viable commute to London and the SE...

Loads of info on French HPI on French Housing Bubble

[ʎqɐqɹǝʞɐɥs]

Can't say I blame them. I hated living just outside High Wycombe. *shudders*

You should have tried living in High Wycome then. *shudders*

[laughing_goat]

Hate to say it, but from here he sounds like a greedy idiot. Odds are he's seen the price increase by a six-figure sum in the last few years by doing nothing and now he's arguing over a few thousand? People like him will follow the market to the bottom through their own greed.

Mark,

I have seen perfectly reasonable people turn into monsters when selling their homes.

I recently wrote in a post that my mother-in-law laughed at an offer £10,000 below the asking price for her house, the EA responded to the buyer in such an offensive manor that he never contacted either the EA or Mrs Goat snr again. The house sold 5 months later for £22,000 below the asking price.

Again, my mother-in-law is a nice, reasonable woman, but faced with selling a house, she turned into a money driven monster.

I think this behaviour is caused by a house being the biggest asset that most of us will ever own and getting ripped off one way or another (selling too low or buying too high) can have a drastic effect on your standard of living. Also, many are 'needing' their equity to either pay off debts or provide a retirement fund (rightly or wrongly, personnally, I don't want to pay for someone elses mistakes, their house is more than enough).

I think this is why it brings out the monster in so many seemingly normal people.

LG

[ajh]

Well I do kind of agree with you. But it shows how most people feel about property: they can be as nice as pie and completely logical in most subjects but simply refuse to accept prices can't be sustained. The lesson to me from this is that (a) the falls will take longer to occur than I'd like, ( they could be hard when they do occur.

Incidentally my mother was trying to persuade him to drop the price and sell. She realises how much they bought their properties for in the first place. Oh and I just realised he's my step-father rather than father-in-law (oops).

Has your mother put her house on the market yet? If not maybe she should, because if she gets her sale through it would put some pressure on your stepfather to get on with it.

[Andrew McP]

I think this behaviour is caused by a house being the biggest asset that most of us will ever own

You probably also have to factor in the mindset of many older people brought up in times when money really meant something (ok, it always means *something*, but we undoubtedly live in a more affluent society no matter what trauma high house prices cause).

To those of us with 20+ years of work ahead of us it's easy to see a 20k price drop as nothing significant compared to the amount of notional "profit" made from buying a long time ago (ignoring the fact most people have to buy somewhere else in the same uncertain market). But if you're at/towards the end of your working life and this is your one and only asset (the case with many people with little or no private pension), then waving goodbye to even 10k is very hard to do.

Rationally we can sit here and dismiss such attitudes as foolish. But given the uncertainties of old age I can't blame people for hanging on for every thousand their EA and the surrounding marketplace *seems* to imply is rightfully theirs.

This is just one of the factors which make house price corrections such a slow and messy business.

Andrew McP

PS I suppose I should say that my OAP mother is in a similar position. No assets apart from a house which we had to do lots of work on fifteen years ago before she could even get a small mortgage for it (dry rot, rising damp, roof a write-off, re-wiring, you name a problem, she had it in the wreck of a house she'd rented for 25+ years).

Anyway, she had it on the market for most of last year with only one low offer which wouldn't have allowed her to buy any of the smaller properties she had in mind. I've tried to help as much as possible, but the fact that small properties have been pushed to such ridiculous prices by BTL, second homers, and downsizers like my mother makes life very hard, especially for someone who was trying to have a little money left over to boost their basic pension for a while. She's given up on that now and will be "happy" to just move to a smaller house in an equivalent area with -- hopefully -- smaller running costs.

Messy business. It's the first time in my life I've ever wished I earned a lot more than I do. Then I could fund the necessary price drop for her to just get out and get on with her life.

[frugalista]

To those of us with 20+ years of work ahead of us it's easy to see a 20k price drop as nothing significant compared to the amount of notional "profit" made from buying a long time ago (ignoring the fact most people have to buy somewhere else in the same uncertain market). But if you're at/towards the end of your working life and this is your one and only asset (the case with many people with little or no private pension), then waving goodbye to even 10k is very hard to do.

Rationally we can sit here and dismiss such attitudes as foolish. But given the uncertainties of old age I can't blame people for hanging on for every thousand their EA and the surrounding marketplace *seems* to imply is rightfully theirs.

Good point well made. There is a truly tragic image of some poor 75-year-old couple in 10 or 15 years time saying "yes, we had plans to sell the old place in Little Cackton and move to the Dordogne, but in the end couldn't find a buyer so we just kind of decided to stay. It's not so bad really -- I've heard there's a new Tesco opening in nearby Barfchester, so that'll really put us on the map".

frugalista

[Zen-Master]

My father did the exact opposite - turned down a higher offer of £30,000.

When I asked him why, he replied that he had already agreed the earlier offer with the other prospective purchaser and also that "..he did not like the look of the other guy."

Perhaps he was correct to do so, who knows?