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the end is a bit nigher

They Haven't Learned

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Had my monthly trawl around the local EAs yesterday. Much as I hate to admit it, i quite like a few of the ones I have got to know and get some good info from them as I am seen as a potential buyer with finances in place and chain free.

Anyway, at the start of the year there can be no doubt (much as it pains me to say) that a lot of sales went through very quickly and very close to (or at) asking price.

What happened next? The EAs then added 10% to the asking prices of the new stock and guess what, absolutely nothing is selling. Exactly the same stuff on the market as 4 weeks ago. All at the same price. (Actually, there is even one which was up for 'Best offers around £225k' which didn't get the desired price and is now up for £245k).

I have whinged before about the mentality whereby any sale has to be 10% more than the previous equivalent but how can any serious sort of business shoot itself in the foot so much? Did they not learn from their previous attempts at hiking prices? Why are they and their vendors so greedy?

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I have whinged before about the mentality whereby any sale has to be 10% more than the previous equivalent but how can any serious sort of business shoot itself in the foot so much? Did they not learn from their previous attempts at hiking prices? Why are they and their vendors so greedy?

They do it because it works! (until the bubble bursts)

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That's the point though - it hasn't worked. Absolutely nothing has sold (ok, a couple of properties) but I would say that at least 90% of the previous month's stock was still there.

I just don't understand why they can't be satisfied with having high turnover. I think it relates back to their view that higher prices are a good thing.

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You have to appreciate that for an EA, the real sale takes place when they take the property onto their books. As their stock dwindles, they have to do more to get new stock, which includes inflating prices quoted to vendors.

So you may see at least some of those places marked down in coming months, but don't see it as a sign of a crash, see it as a sign of things that have gone on for decades, probably even centuries.

When you hear of vendors chasing agents, willing to put their places on at any price to get it sold, then you are looking at a crash. That isn't happening now of course, I just wanted to help you to be able to see the signs if/when they appear. :)

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I think due to the slow market, sellers became more realistic and this helped shift a few.

But the EA responded to this in the only way they know how , and that was to hike prices up, which has the effect of stalling the market again, their greed will be their downfall.

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You have to appreciate that for an EA, the real sale takes place when they take the property onto their books. As their stock dwindles, they have to do more to get new stock, which includes inflating prices quoted to vendors.

That's very true. Hence Foxton's offer to sell the place for 10% more than anyone else, and guess who gets the business.

Certainly they need property on the books to begin, but even more they need sales to bring home the bacon.

I can understand why they do it, but the whole business model really does need a re-think.

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Why are they and their vendors so greedy?

Wrong question.

Right question? Why are vendors so greedy?

I love the odd vendor who is really motivated to sell and asks me to put the property on the market priced to sell. Unfortunately most vendors tell me they want to 'test the water' as they desperately do not want to put their property on the market at too low a price.

I have had plenty of instances of:

instruction on Tuesday

10 viewings on Saturday

4 offers on Monday at the asking price

Vendor sits on his hands and wants to get the price up somehow!

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Wrong question.

Right question? Why are vendors so greedy?

I love the odd vendor who is really motivated to sell and asks me to put the property on the market priced to sell. Unfortunately most vendors tell me they want to 'test the water' as they desperately do not want to put their property on the market at too low a price.

I have had plenty of instances of:

instruction on Tuesday

10 viewings on Saturday

4 offers on Monday at the asking price

Vendor sits on his hands and wants to get the price up somehow!

Fair point.

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I have had plenty of instances of:

instruction on Tuesday

10 viewings on Saturday

4 offers on Monday at the asking price

Vendor sits on his hands and wants to get the price up somehow!

ok - do u tell them to take the offers? - if we assume it's the vendor then we are back to this mentality of 'my house i nicer than yours' - a lot of this bubble seems to be down to one-upmanship

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Sounds like another bear about to throw in the towel.

<_<

if u mean me then on the contrary - firstly i have just agreed a new 6 month rental and secondly i am positively encourged by the fact that sales have stopped - we seem to have found a concrete ceiling

the purpose of the post was really to highlight how greed has broght the market to a standstill again!

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I've never sold a house - since I've never bought one <_< but when I sold my last car I did so at a price which I felt was realistic.

I remember going to a local dealer looking to trade in and saying that I thought it was worth £3K - he almost laughed me off his forecourt and offered a derisory amount for it (about £1600).

So I sold it privately, put the car on at £2,600 and sold it within a week at asking price. If I'd upped it to £3K I may well have sold the car at that price too. But when I looked at what other similar cars were selling for and in the same/similar condition, I know I was pricing at a level which would make it attractive and offered little scope for buyers to knock me down.

The bottom line is I wasn't greedy in the first instance, and I just wanted to sell the car and get it off my hands so I could concentrate on my new one.

I came away happy and contented with a smooth and hassle free transaction and the buyers were really nice people.

If only people could take the same attitude with the housing market.

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What happened next? The EAs then added 10% to the asking prices of the new stock and guess what, absolutely nothing is selling. Exactly the same stuff on the market as 4 weeks ago. All at the same price.

So, there's another thing I'd like to add to this thread.

Are Estate Agents therefore on a mission to deliberately manufacture market stagnation, in an attempt to "save face" for the property industry ?

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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