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Paying Too Much...

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A thought just occurred to me about the psychology of house purchasing. I am sure every buyer wants to secure the best possible deal when they agree to pay a certain amount for a house. However, if a person is buying in the current climate, is it not reasonable to suppose they have become only partially convinced that the bubble will continue growing and prices will continue rising. Therefore, when somebody agrees to buy a place for around the ridiculous asking price, is their act of buying part of their own rationalisation process as to why it is a good idea?

i.e. "I am really scared that the market will crash, but on the other hand I just bought at a stupid price, therefore other people behind me will also be stupid and buy it off me in a few years for even more"

"If we all keep acting stupid, everything will be alright"

And when someone challenges the stupidity:

"This persons rational view is dangerous....shut up will you? We all know there is an elephant in the corner of the room, but you don't have to mention it"

Buying a house now is an act of submission to the bubble, an act of faith...

"please oh great bubble, I surrender myself up to you: take me into your fold and release me from the burden of having to work for a living"

Edited by marko

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One of my local friends just had the EA-suggested ridiculous asking price accepted by a buyer.

She is fully aware that the price is insane, but simply wants to transfer the cash to the purchase of another similarly-overpriced property in the same area.

At the end of the day she just wants a bigger house, and accepts whatever insanity the market imposes as an externally imposed condition.

She is utterly uninterested in graphs, interest-rates, economic forecasts - she just wants to move house and unpack.

I guess I can see her point.

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  • 301 Brexit, House prices and Summer 2020

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