Offer accepted

[BobWeaver]

So after around 20 rejected offers, I have had one accepted on a house.

Now I'm second guessing myself and asking why I'm doing it. 

Why would anyone buy in a boom? The accepted offer was 20k more expensive than any historical sale on the street. Surely this can only mean when I come to sell in five or so years that I'm likely to actually take a loss on it?

So I think I'm just going to wait it out. Prices can't realistically get any higher 

The main question is, why would anyone buy in a boom when chances are, when you come to sell you're going to lose a fair chunk 

[Pop321]

On 28/05/2021 at 19:39, BobWeaver said:

So after around 20 rejected offers, I have had one accepted on a house.

Now I'm second guessing myself and asking why I'm doing it. 

Why would anyone buy in a boom? The accepted offer was 20k more expensive than any historical sale on the street. Surely this can only mean when I come to sell in five or so years that I'm likely to actually take a loss on it?

So I think I'm just going to wait it out. Prices can't realistically get any higher 

The main question is, why would anyone buy in a boom when chances are, when you come to sell you're going to lose a fair chunk 

That’s the very nature of a bubble. Many will believe that prices can’t ever fall again and find it inconceivable that they are paying too much.

Never be certain of anything.....either falls or rises.

Lockdown has been a double edge sword for many and they find themselves with more money in the bank than usual. That is because the world is build in earnings and spending for many...and the spending tap was turned off. So now they can afford a bigger house so they are jumping in.

The market near us is mixed so some have bought in November December and avoided last summers daft prices and more recently this latest little jump. Others have paid 20% over the odds on very average homes because of multiple offers on very little available stock.....and that’s a recipe for disaster and was warning to wait.

Lets see what happens when furlough ends and normality resumes....I predict a generally economic rally and then some significant issues. But as I say, never certain of anything. 

[satsuma]

So if things were following any sort of logic Furlough ending and eviction bans ending at the same time as Brexit bites would cause mass panic and closed pocket books.  Add to that end of stamp duty holidays and an overheated market. However, logic seems to have disappeared.  

[reginekierkegaard]

This is a very difficult market. Market can go either way. 
On one hand, the money supply would remain heightened in the short to medium term. The velocity of money is likely to pick up as the lockdown restriction ease. 

On the other hand, the pandemic is far from over (especially in certain parts of the world), the act of furlough and eviction ban cloud the true economy. Without these measures, the market should have fallen but the government decided to intervene in the free market and popped up the prices with huge deficit spending and money printing. 

I think we need to prepare to both possible options. 

In the event of another price hike, are you in a position to benefit from it. In the event of a price fall, are you able to service the mortgage and had no rush to sell. You only lose out if you sells when the price is down. 

[Odysseus]

In 5 years the price may have fallen but will you have more or less equity taking account of your repayments? 

Are you mortgage payments similar to what you would be paying in rent?

 

 

[Pop321]

1 hour ago, Odysseus said:

In 5 years the price may have fallen but will you have more or less equity taking account of your repayments? 

Are you mortgage payments similar to what you would be paying in rent?

 

For me this isn’t a 5 year question....it’s whether to buy now or wait until there is a softer market. My son waited 5/6 months, bought in Dec 2020 and saved 20% on a frothy silly summer price.

There will be a softer market even if there isn’t a ‘fall’ as such. And in such a frothy market like we see today then even a gentle softening can help someone for who price is a key factor.

[Drummer]

If it's the right deal for you, go for it. Prices have edged up around 5-7% around here over the past 12 months despite the pandemic.

[HovelinHove]

We are days away from exchanging contracts on a probate property that was put on the market last November and needs a full renovation. They had it on for way too high, had 2 developers low ball them, and we came in just above those offers and got the house in March for what I regard a fair price. We are paying 2019 early 2020 price for the house, it is in a lovely street in a beautiful village surrounded by a National Park. I had a chat with the agent selling us the property, and told him if we don’t complete by end of June and avoid the SD, we will back out and wait till next January. He agreed and said that all the gains of the last year would evaporate by this time next year…an estate agent said that! 

[Crowed]

Question is do you want the house and do you like the house? If you don't have any connection to it, are haply renting and waiting 6 months to a year is no problems for you - then wait. 

 

2008 I bought the most expensive house on the street and prices fell £40k which was 20 percent. We just sat tight and the house was fine for us and we could afford the mortgage so living their wasn't an issue - was a little gutted we didn't wait but if we had not sure we would have gotten mortgage. Took about 5 years for prices to get back to what we paid, and then things go nuts again and sold it for much more but also had to pay much more for the house we are in now. 

[Si1]

3 hours ago, crow said:

Question is do you want the house and do you like the house? If you don't have any connection to it, are haply renting and waiting 6 months to a year is no problems for you - then wait. 

 

2008 I bought the most expensive house on the street and prices fell £40k which was 20 percent. We just sat tight and the house was fine for us and we could afford the mortgage so living their wasn't an issue - was a little gutted we didn't wait but if we had not sure we would have gotten mortgage. Took about 5 years for prices to get back to what we paid, and then things go nuts again and sold it for much more but also had to pay much more for the house we are in now. 

It's an interesting point. When houses are cheap historically, transactions tend to be low. So you're pretty much typical. People generally buy, repeatedly even, at peak. Not saying that's good or bad but it's what people do.

[btd1981]

For the voters Boris cares about, falling house prices represent economic failure. 

Boris doesn't like 'failure'; therefore, don't bet against him throwing the kitchen sink at the market to keep things looking rosy.  There's a massive magic money tree when it suits the agenda.

[satsuma]

 

Oh deary me, who could have predicated it 

[scepticus]

On 28/05/2021 at 19:39, BobWeaver said:

Why would anyone buy in a boom? The accepted offer was 20k more expensive than any historical sale on the street. Surely this can only mean when I come to sell in five or so years that I'm likely to actually take a loss on it?

Sounds like you should wait. If you are getting a great deal, go for it , if not, wait. You could find that possibly this will result in a fall in the asking if they have no offers, or they have one which falls though in a few weeks time.

I'm sure you have compared it to similar properties you have looked at in the price band to determine an average cost per sq m for the property types you have been looking at. If the price of the place you have offered for is not some fair way below that average, then you are not getting a good deal. 

We bought a new place end of last year, but only because it was, for various circumstantial reasons due to the sellers circumstances and ours (we were in temporary rented), a fabulous deal. And we had been looking at and comparing properties for nigh on 2 years prior, so were highly confident in our analysis.

[PeanutButter]

On 28/05/2021 at 19:39, BobWeaver said:

So I think I'm just going to wait it out. Prices can't realistically get any higher 

Honestly, and I say this bitterly, they can. But you can't predict which way they will go so if you need and want and can afford that house now, the opportunity is here. If you're happy in your current accommodation and have the time to wait, and are accruing more in savings each month than your chosen house is increasing in value, fine, stay. But don't underestimate the toll that waiting takes mentally either. Monitoring the market, searching, contacting agents - those 20 offers you had declined - it all adds up. As you wait for the market to fall (or perhaps it will only cool, and plateau) you could accumulate another 20 rejected offers. 

 

[definitelynotanagent]

 

15 minutes ago, PeanutButter said:

Honestly, and I say this bitterly, they can. But you can't predict which way they will go so if you need and want and can afford that house now, the opportunity is here. If you're happy in your current accommodation and have the time to wait, and are accruing more in savings each month than your chosen house is increasing in value, fine, stay. But don't underestimate the toll that waiting takes mentally either. Monitoring the market, searching, contacting agents - those 20 offers you had declined - it all adds up. As you wait for the market to fall (or perhaps it will only cool, and plateau) you could accumulate another 20 rejected offers. 

 

 

This is sound advice, IMO... I've kept thinking every year since 2003ish that prices were insane, yet they've only fallen a small amount (~20%?) in 2008-2010, and after that it's been up-up-and-up.

I guess the nice thing about buying, even at bubble price, is that in time general (wage) inflation will make sure the nominal price paid will be achieved again, even if you have to spend a lot of years under water.

[Dorkins]

5 minutes ago, definitelynotanagent said:

I guess the nice thing about buying, even at bubble price, is that in time general (wage) inflation will make sure the nominal price paid will be achieved again, even if you have to spend a lot of years under water.

How do you know there will be nominal wage inflation? Wages in Japan are about where they were in the 1990s in nominal terms.

[Si1]

43 minutes ago, definitelynotanagent said:

 

 

 

I guess the nice thing about buying, even at bubble price, is that in time general (wage) inflation will make sure the nominal price paid will be achieved again, even if you have to spend a lot of years under water.

wtf? do you not understand inflation at all?

[Badhairday]

2 minutes ago, Si1 said:

wtf? do you not understand inflation at all?

I'm confused. Isn't he right? Why don't you explain your point of view instead of trying to be condescending...

Why is everyone comparing to Japan, which has been going through deflation and a population decline for decades...

[Badhairday]

1 hour ago, PeanutButter said:

Honestly, and I say this bitterly, they can. But you can't predict which way they will go so if you need and want and can afford that house now, the opportunity is here. If you're happy in your current accommodation and have the time to wait, and are accruing more in savings each month than your chosen house is increasing in value, fine, stay. But don't underestimate the toll that waiting takes mentally either. Monitoring the market, searching, contacting agents - those 20 offers you had declined - it all adds up. As you wait for the market to fall (or perhaps it will only cool, and plateau) you could accumulate another 20 rejected offers. 

 

So true. I guess wether 20k is a lot or not depends on wether you are talking about a 100k property or a 700k property. Also, house prices will go down if interest rates creep up, but if you are buying with a mortgage then you need to sit down and work out wether or not it's in your favour to wait.

 

[TheCountOfNowhere]

On 28/05/2021 at 19:39, BobWeaver said:

So after around 20 rejected offers, I have had one accepted on a house.

Now I'm second guessing myself and asking why I'm doing it. 

Why would anyone buy in a boom? The accepted offer was 20k more expensive than any historical sale on the street. Surely this can only mean when I come to sell in five or so years that I'm likely to actually take a loss on it?

So I think I'm just going to wait it out. Prices can't realistically get any higher 

The main question is, why would anyone buy in a boom when chances are, when you come to sell you're going to lose a fair chunk 

1's post 

       

 

[TheCountOfNowhere]

House price can go as high as they want

 

Money can go to 0

 

 

 

[Twenty Something]

2 hours ago, Badhairday said:

I'm confused. Isn't he right? Why don't you explain your point of view instead of trying to be condescending...

Why is everyone comparing to Japan, which has been going through deflation and a population decline for decades...

I think he’s completely right, and demonstrably so throughout the past however many decades. Unfortunately for many of the obsessive posters on this site, they are incapable of making a point without also needing to insinuate that everyone barring themselves doesn’t get it and is an idiot. Meanwhile, prediction after prediction fails to come to pass, and there is a continued lack of lightbulb moment…

[definitelynotanagent]

2 hours ago, Si1 said:

wtf? do you not understand inflation at all?

Which bit did I get wrong?

[Gigantic Purple Slug]

On 28/05/2021 at 19:39, BobWeaver said:

So after around 20 rejected offers, I have had one accepted on a house.

Now I'm second guessing myself and asking why I'm doing it. 

Why would anyone buy in a boom? The accepted offer was 20k more expensive than any historical sale on the street. Surely this can only mean when I come to sell in five or so years that I'm likely to actually take a loss on it?

So I think I'm just going to wait it out. Prices can't realistically get any higher 

The main question is, why would anyone buy in a boom when chances are, when you come to sell you're going to lose a fair chunk 

I bought 1.5 years ago. Probably overpaid by 10k or so. Saved probably the best part of £15K in rent though since then and a pile of money on transport, so I don't really regret it.

Depends on your personal situation really.

 

 

[Si1]

30 minutes ago, definitelynotanagent said:

Which bit did I get wrong?

The bit about assets.