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Sunday Times: Held To Ransom


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HOLA441
“We’ve had quite a few incidents of gazundering in the past six weeks, all wanting to chip about 5% off the asking price. If it becomes endemic, it is a sure sign that the market is going down, but right now it is just a pause for reflection.”

Euphemism of the week. :)

http://property.timesonline.co.uk/tol/life...icle2636848.ece

Edited by thecrashingisles
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HOLA445

The solution would appear to be to put the house back on the market or call the 2nd highest bidder:

Peter Wetherell, director of Wetherell, a Mayfair estate agency, encountered a similar situation recently with the sale of a £700,000 Mayfair flat. “When one of our buyers tried to chip the price down, we just phoned the second in line,” he says. “That time, the buyer had to pay the penalty and lost out.

Obviously gazundering is only a useful tactic when there are no others waiting for the sale to fall through. It works in a market where sellers outnumber purchasers, so there will not be a "second in line". I do not think that Wetherall's are a particularly useful guide for the country as a whole, being the home of members of the richest 0.1%.

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HOLA446
“A two-tier market is emerging,” says Jasper Fielding, a partner at Strutt & Parker’s office in Moreton-in-Marsh, in the Cotswolds. “There are those properties that are selling and those that aren’t."

Give that man a Nobel prize.

Edited by Scunnered
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Guest DissipatedYouthIsValuable
I' assuming the second highest bidder already offered less than the higher bidder?

Now, now, we'll have no trouble here. House prices are up and they'll stay up. ;)

Strong economy. Going forward. etc..

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HOLA4411
Which is exactly what the owners of Ebrington Hill, a five-bedroom house with just under 17 acres near Chipping Campden, did when their buyer tried to reduce his offer by 10% just days before they were due to exchange. The 19th-century house in Gloucestershire was put up for sale for £3.2m in June, when the market for prime country houses was booming. The sellers, who have declined to be named, had accepted an offer closer to £3.5m. They decided that they weren’t going to be forced to accept a lower bid, and put the house back on the market a fortnight ago for its original £3.2m asking price.

So the reduced offer was 90% of £3.5m on a house which was put on the market for £3.2m. That's only 50k (1.5625%) less than the asking price, and they turned down the cash! They could get that in a savings account before the house sells!

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HOLA4412
The problem is the English house-buying system is half-baked,

and sales are only half-made until contracts are exchanged.

see this:

"He cites the example of a “very nice” house in Notting Hill he has been handling. When the property came on to the market in June, the buyer had to bid “substantially over” the £3m guide price to secure it. But the mood had changed sharply by the end of last month, when the time came to exchange. The day before, the bidder knocked more than £100,000 off his offer."

The buyer stands to lose nothing if he renegotiates.

What a crazy system- who can blame them for trying.

Nobody selling a house complains when prices are going up.

Gazumping and gazundering are morally equivalent: always have a plan B and a walk-away price.

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HOLA4413

“We’ve had quite a few incidents of gazundering in the past six weeks, all wanting to chip about 5% off the asking price. If it becomes endemic, it is a sure sign that the market is going down, but right now it is just a pause for reflection.”

Ridiculous - that's not gazundering, that's normal negotiation. The asking price for our house last year was £160k; we offered £152k (i.e. 5% less) and settled for £154k. Nothing strange about it!

This quote just shows how skewed is the mindset of some VIs, and how sensitive they are to ANY reduction at ANY stage whatsoever. Probably been so long since the last crash/slump that many of the spottier ones don't even remember!

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HOLA4414

We (potential buyers) have been held at ransom for so long now that this is exactly what is needed to speed this crash up.

Personally, I quite enjoy viewing houses and getting a feel for the area that I want to move to so; for the last few weeks I've been viewing houses there.... Very frequently I'll be the only person seeing that house (on a Saturday..!) and sometimes the only person that has seen the house for quite some time. Most of the time the houses are, realistically, about 10% more than I could possibly pay for a house... but I go see them anyway...

When I get those calls on Monday asking me how the houses were I usually just give the same answer - 'yeah, very nice but I think they are about 10 - 15% overvalued. If the seller would consider £xxx,xxx then I could be interested.... ' - this get's the usual flustered response along the lines of ' uh - no, I think they are really holding out for the asking price; I'm afraid they won't consider offers that low...'

And I say... fine, I can wait... the thing is, some of them won't be able to. Eventually I'll hit that seller who needs to sell and maybe then I'll get the house I want. If not then at least I'm letting the agents know that I consider their stock to be overvalued and that I as the buyer am just not interested until it gets a bit more reasonalbe... Most of the owners are sitting on almost 100% profits for their 4 years hard work owning the property so I don't feel I'm really causing anyone too much pain, just bringing their feet back down to the ground a little....

So I say - get out there and do similar in your areas. You might think all this is a bit sad and a waste of your Saturday time but it's only when the EA's continue to get this as constant feedback and that the buyers start to get these offers that are 5%, 10%, 15% lower than what they want that the prices will actually start to fall.

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HOLA4415
We (potential buyers) have been held at ransom for so long now that this is exactly what is needed to speed this crash up.

Personally, I quite enjoy viewing houses and getting a feel for the area that I want to move to so; for the last few weeks I've been viewing houses there.... Very frequently I'll be the only person seeing that house (on a Saturday..!) and sometimes the only person that has seen the house for quite some time. Most of the time the houses are, realistically, about 10% more than I could possibly pay for a house... but I go see them anyway...

When I get those calls on Monday asking me how the houses were I usually just give the same answer - 'yeah, very nice but I think they are about 10 - 15% overvalued. If the seller would consider £xxx,xxx then I could be interested.... ' - this get's the usual flustered response along the lines of ' uh - no, I think they are really holding out for the asking price; I'm afraid they won't consider offers that low...'

And I say... fine, I can wait... the thing is, some of them won't be able to. Eventually I'll hit that seller who needs to sell and maybe then I'll get the house I want. If not then at least I'm letting the agents know that I consider their stock to be overvalued and that I as the buyer am just not interested until it gets a bit more reasonalbe... Most of the owners are sitting on almost 100% profits for their 4 years hard work owning the property so I don't feel I'm really causing anyone too much pain, just bringing their feet back down to the ground a little....

So I say - get out there and do similar in your areas. You might think all this is a bit sad and a waste of your Saturday time but it's only when the EA's continue to get this as constant feedback and that the buyers start to get these offers that are 5%, 10%, 15% lower than what they want that the prices will actually start to fall.

Good for you. Rather than just yacking away on this forum you're taking some positive action to move a HPC that little bit closer.

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HOLA4416
We (potential buyers) have been held at ransom for so long now that this is exactly what is needed to speed this crash up.

Personally, I quite enjoy viewing houses and getting a feel for the area that I want to move to so; for the last few weeks I've been viewing houses there.... Very frequently I'll be the only person seeing that house (on a Saturday..!) and sometimes the only person that has seen the house for quite some time. Most of the time the houses are, realistically, about 10% more than I could possibly pay for a house... but I go see them anyway...

When I get those calls on Monday asking me how the houses were I usually just give the same answer - 'yeah, very nice but I think they are about 10 - 15% overvalued. If the seller would consider £xxx,xxx then I could be interested.... ' - this get's the usual flustered response along the lines of ' uh - no, I think they are really holding out for the asking price; I'm afraid they won't consider offers that low...'

And I say... fine, I can wait... the thing is, some of them won't be able to. Eventually I'll hit that seller who needs to sell and maybe then I'll get the house I want. If not then at least I'm letting the agents know that I consider their stock to be overvalued and that I as the buyer am just not interested until it gets a bit more reasonalbe... Most of the owners are sitting on almost 100% profits for their 4 years hard work owning the property so I don't feel I'm really causing anyone too much pain, just bringing their feet back down to the ground a little....

So I say - get out there and do similar in your areas. You might think all this is a bit sad and a waste of your Saturday time but it's only when the EA's continue to get this as constant feedback and that the buyers start to get these offers that are 5%, 10%, 15% lower than what they want that the prices will actually start to fall.

I popped into the estate agents this saturday. I chatted to the EA, i purposely tried to sound naive to try and see what they would say. Must admit thought, the EA was well fit, she was wearing a tight little top and her tits were nearly popping out and she only looked about 21. I might go and view a house next week, hopefully, she will show me round. I certainly wont be buying anything at these prices though.

Edited by Bearback
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HOLA4417
I popped into the estate agents this saturday. I chatted to the EA, i purposely tried to sound naive to try and see what they would say. Must admit thought, the EA was well fit, she was wearing a tight little top and her tits were nearly popping out and she only looked about 21. I might go and view a house next week, hopefully, she will show me round. I certainly wont be buying anything at these prices though.

See - what further encouragement could anyone need. Whole offices full of 20 somethings just waiting to spend time with you on a Saturday afternoon.... oh, and the chance of perhaps speeding up a crash in property prices.

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HOLA4418
Gazumping and gazundering are morally equivalent: always have a plan B and a walk-away price.

Excellent advice. If you get an offer of say 250k when the bare minimum you would have accepted is 240k, then any reduction of less than 10k still leaves you in the black. This puts you in a healthier psychological place, and also gives you a pre-determined 'line in the sand' that you won't cross.

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