Im Buying A House!

[AteMoose]

After 5 years of being in full time employment and saving i am now in a position to buy a house, and the wheels are in motion! I have noticed that larger properties are selling in smaller and smaller numbers, and over the past two years in my area the average sold price of a larger property has dropped, IMO larger properties have been crashing since 2004. I have negotiated a price 40k below the initial asking price, 60k below the peak price and only 35k above the price the current owner paid when it was built in 2000 and sold in 2001.

I looked at a number of properties in the area, and took interest in this one because the owner had already moved out (into rented). I made an offer at the 2002 price for the area, and the EA came back to me saying it was a very low offer, the owner wasnt saying no but could i raise it a bit? I waited three days when the EA came back to me, i said it was at the top end of my budget and in the end i raised the offer by £1000 ;p The EA came back to me the next day and to my supprise said the owner had accepted my (silly) offer ;p

The property has three bedrooms (with a dining room which i will use as another bedroom). It has off road parking a garage and its in a city centre, very close to a station with regular trains to london and birmingham.

I have done the sums and i am going for a 5 year fixed morgage (on my own!) to protect me from IR fluctuations. The plan is to rent out 3 other rooms, which means my living costs will be the same as my current living costs, and i will continue to save at £1000 a month. The aim is to significantly reduce my morgage over 5 years.

What do ya think? am i the greatest fool before a crash? Or have i taken the piss enough and got a low enough offer. (My boss agrees with HPC to annoyance of everyone else in the dept and thinks i should have offered even less). My offer has also upset quite a few bullish people in the offer as it shows that prices have dropped over the past two years. Personally i think bigger properties will continue to fall for a bit, i dont think mine will drop more than another 20/30k (1999,2000 prices), but if it does i have a big enough deposit to protect me.

2000/2001 there would have been no way i could have afforded this property which had sold well above the average detached price in my area, my offer is now well below the average asking price for detached properties.

I was amazed he accepted my offer especially when it was so low. If your putting in offeres , only offer well below the asking price and offer what you think it is worth... Use the sold prices websites and trend websites and offer below the average prices you see other places selling at. If the seller is in trouble he may accept a very low offer.....

Edited August 18, 2006 by moosetea

[Guest Bart of Darkness]

I have negotiated a price 40k below the initial asking price, 60k below the peak price and only 35k above the price the current owner paid when it was built in 2000 and sold in 2001.

Sounds like a good deal to me.

Good luck for the future moosetea.

[Realistbear]

West Midlands was one of the areas RICS admitted to going down in their most recent report. Next year they could be as much as 15-20% cheaper. I am waiting until they drop by around 30-40%. Another 22-32% to go.

[Firangi]

60k below the peak price

How much in percentage term?

[munimula]

I have done the sums and i am going for a 5 year fixed morgage (on my own!) to protect me from IR fluctuations. The plan is to rent out 3 other rooms, which means my living costs will be the same as my current living costs, and i will continue to save at £1000 a month. The aim is to significantly reduce my morgage over 5 years.

Well done! Doing your bit for bringing the prices down. If only more were like you. This should feed into the figures that should show prices starting to fall over the next few months.

If you're prepared to rent out the rooms and save as you say, I don't see how you can go wrong. Do that for 5 years, pay down the mortgage and in 5 years time enjoy the home for yourself

[dnd]

What do ya think? am i the greatest fool before a crash?

Your guess is as good as ours - IMO it isn't coming through IR movements - were going to need something global and sudden to crash this monster

Good luck...

Edited August 18, 2006 by dnd

[BrickingIt]

My offer at £210K (30% reduction on original) was knocked back, one party is holding out.

Good luck moosetea.

[AteMoose]

--

Edited August 18, 2006 by moosetea

[Guest X-QUORK]

Good luck Moosetea, sounds like you've got a reasonable deal there. Now, promise you won't turn into the new TTRTR .

[IamSpartacus]

My offer at £210K (30% reduction on original) was knocked back

Either this place was hugely overpriced relative to other properties in the area or you were taking the piss!

[AteMoose]

Either this place was hugely overpriced relative to other properties in the area or you were taking the piss!

other identical properties have been selling for above this price, 2004 the same properties sold for 15k more than the asking price, none of the identical properties have sold this cheaply since 2002...... I recommend taking the piss You never know when it will work

Edited August 18, 2006 by moosetea

[BrickingIt]

Iam Spartacus

The property is fairly priced at say £225K as a rough measure.

The property is somewhat unique but not great, but the area is excellent. Its difficult to price it up. One party accepted the other didn't.

[IamSpartacus]

other identical properties have been selling for above this price, 2004 the same properties sold for 15k more than the asking price, none of the identical properties have sold this cheaply since 2002...... I recommend taking the piss You never know when it will work

Agreed - but you got a price 40K below asking price, presumably around a 10%-20% discount. I was referring to the offer 30% below asking price...

Iam Spartacus

The property is fairly priced at say £225K as a rough measure.

The property is somewhat unique but not great, but the area is excellent. Its difficult to price it up. One party accepted the other didn't.

Then you won't get it for £210K unless they're desperate to sell. You do have an advantage if its a unique property I admit, as they may struggle to find a fair comparison price other than that suggested by the EA.

[BrickingIt]

IamSpartacus

The owners dont talk to each other - I think they are getting pretty close to desperate.

They are chasing the market down aswell. I've been growing the nose.

[Guest DisposableHeroes]

www.houseprices.co.uk

I't will make you happy or make you sad...

[BrickingIt]

Been there got the t-shirt.

This is the essential problem.

[iangilb]

Seems to say one of three things:

1) The seller is desperate for some specific reason not related to the market. If so, good for you but should we feel sorry for them? (I expect NO is the answer from the board).

2) HPC is here and the seller is wise enough to know it. In which case it is hard to see if this is a good deal or not.

3) The market is sustainable and you are proving it by underpinning it, albeit at a reduced level. If not, why not wait for a bigger reduction as RB suggests?

[BrickingIt]

iangilb

1. The Seller probably overpaid, had problems, and now is ignoring all else in expectation of a return (at least non negative equity) on the initial price although its a difficult property/area to price. What does this say - prob. 18 months on the market although just gone through a reduction 3 months ago.

2. HPC is here in my area, the extent is difficult to judge because of overpricing by EA's and it principally applies to the top of the market.

3. The waiting game is fine if your a first time buyer a bit more difficult if you are moving up the ladder. I have a bit of a chain problem at mo already. In relation to underpinning thats a difficult question to answer. The mortgage advance would be around 3x of just my earnings hence ok.

[Golden Shower]

Good luck, moosetea. I'm still betting on a more or less flat market over the coming years, the question I had to ask myself was, "Will staying out of the market for x years (already having done that) be worth it?". The conclusion was probably not.

Edited August 18, 2006 by Golden Shower

[Cuckoo]

I bought a £200k flat last year on a property originally marketed at £245k.

Watched, waited, did my homework, found lucky combination of v keen sellers ( family getting too large for flat and ready to negotiate) and pre-christmas completion deadlines and hammered down the deal in 4 1/2 weeks from inspection to completion.

You can create your own "crash". You just need to be savvy.

[Guest boredwaiting]

I bought a £200k flat last year on a property originally marketed at £245k.

Watched, waited, did my homework, found lucky combination of v keen sellers ( family getting too large for flat and ready to negotiate) and pre-christmas completion deadlines and hammered down the deal in 4 1/2 weeks from inspection to completion.

You can create your own "crash". You just need to be savvy.

That sounds great - If you find a house you feel happy buying then you should definately go with it regardless...

[Ian Worthington]

Moose --

May I ask where this is? I'm guessing its somewhere around the Worcester area you say you're currently living in, which is where I've just started looking -- as I work from home I can live anywhere I can get broadband.

Fel free to PM your reply if you prefer: (In fact I tried to PM you but was told I'm not permitted to use the PM facility. Any idea what gives?)

ian

...

[Garry AKA Pod]

Best of luck with it.

[Bucephalus]

How much in percentage term?

The big question: how much in % terms Moose?

[winkie]

If you're prepared to rent out the rooms and save as you say, I don't see how you can go wrong. Do that for 5 years, pay down the mortgage and in 5 years time enjoy the home for yourself

That's exactly what I did when I was young free and single, rented out to friends at a reasonable rate, we shared cooking and cleaning even the boyfriends helped with the decorating and odd jobs we all had a great laugh and have many happy memories.