Tuesday, July 10, 2007

Bought a house recently? You’re losing money

Bought a house recently? You're losing money

If you bought a house six months ago now probably isn’t the time to sell it: do so and the odds are you are going to lose quite a lot of money on the deal. Say the house cost £500,000 back in January. Add in your stamp duty, legal fees and so on and the total cost to you would have been about £525,000. So you need to get at least that to break even. But in most places house prices have barely budged in the last few months...

Posted by mary @ 11:56 AM (536 views)
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19 thoughts on “Bought a house recently? You’re losing money

  • sold 2 rent 1 says:

    I haggled my EA selling fees to 0.7% + VAT last year.

    Fixed priced fees, like autotrader, were always going to happen. Well done Tesco.

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  • what a lazy journo- he’s nicked his arguments from freakanomics!

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  • Samone
    Wherever she s nicked it from… it s the truth and kiss goodbye to the BTLers and the agents alike!!

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  • samone – journo is a she and I’m pretty sure Levitt & Durner weren’t breaking ground when they wrote the estate agency fee example in one of the most over-hyped and boring books I’ve ever read. Apart from the abortion v crime stats story the rest of the book was 6th form applied math with a story.

    I love you Merryn!

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  • Samone, Merryn is a well respected and insighful LADY with a well grounded background in finance, rather than some copy
    and paste english graduate who has chanced it as a financial times “journalist”. Suggest you do a little research before bad mouthing
    people who know what they are talking about.

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  • samone – Merryn is well respected. She’s a babe too.

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  • oh I’m sorry, I forget how impartial the posts are on this site. Let me rephrase;

    “What a well respected journo who is female, and ‘lifts’ her arguments from freakanomics.”

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  • Well at last, someone has published some truth about real property prices. Prices are actually falling in several parts of the country and the rate of growth is greatly slowing in others. It amazes me that people who are old enough to rember the last property crash still feel that ‘this time its different’. Its always different, but the same ending will materialise.

    The property market is hot topic of conversation over the country, but i have never seen such ‘DIS-INFORMATION’ as there is in the newspapers. A lot of the big nationals are having big bold headlines indicating that the market is still booming. Well I for one certainly don’t think that the market is booming. I would be ineterested to hear other peoples comments on what they think is actually happening
    with property prices.

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  • there is a lot of DIS-INFORMATION in the big national newspapers indicating property prices are still boomong. Well I for one don’t think this is the case, and in several areas of the country prices have already been falling for a couple of months. In other areas the rate of house price growth has drastically reduced and is getting smaller all the time.

    I would be interested to hear other peoples comments about what they think is happening in the market in reality, and not what appears in the press.

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  • She certainly don’t like estate agents and doesn’t mind letting us know in her article. But I think she goes a bit to far –

    ‘That’s just too much to pay for someone to do a job that is, in general, no harder than working behind the till in Waitrose.’

    Very unfair to Waitrose staff.

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  • Everyone on this forum should read two short books. Freakanomics and the Tipping Point. Insightful but not Gospel

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  • Samone, Merryn has a long history of writing articles that are quite insightful (and supportive of the views that are generally held here…so of course I think they are great). One thing that I can say for her, is that it appears from her article that she has put her money where her mouth is and STR’ed, i.e. unlike so many of the hacks that just regurgitate the easily demonstratable as idiocy Prof. Nickell publishes, she actually appears to have a position she has thought through. This is why some people on hre seem to think you are making very cheap shots.

    Perhaps it might be that Freakanomics is just a hagiographical popular economics airport paperback presenting well worn arguments as if they were somehow novel? I read it recently and it didn’t strike me as saying anything that hasn’t been common knowledge for a long, long, long time.

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  • Maddison, how about A Short History of Financial Euphoria?

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  • The Capitalist says:

    Lifted her article? Tesco have nicked my logo which is a regd trademark! I launched this site last May…www.readinghomesdirect.co.uk

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  • When would anyone really expect to profit by selling a house after only 6 months? Unless they’ve done it up or bought it at a knock down price. You should hold it for at least a couple of years to get past the costs of moving.

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  • I’ve read Freakonomics, and before it had posters all over the underground. Anyone can rehash economics textbooks with updated example case studies and slap a bling front cover on the book, which is preceisley what has been done.

    Which arguments exactly do you think she’s lifting?

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  • Samone,

    don’t think I need to read Freakanomics (I’m not a speccie analyst wanabe) to know that most estate agents are over-paid, under qualified
    shamsters, or that purchasing an over priced property with a super geared mortgage may be financially unsound. I also believe Merryn’s “aruments”
    are valid and based on observed and informed data. Suggest you stick to reading the Sunday Times, Metro, or Evening Standard to suspend any
    further dissapointing news that upset your myopic view.

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  • I imagine that Samone is referring to the section in Freakonomics on real estate agents and the argument that it is not in their best interest to get you $10k more for your house when they’ll only be making 2% (or less) of that. It’s good logic that I, for one, hadn’t thought through before reading the book.

    To accept MSW’s credentials at face value is about as short sighted as believing everything you read in the papers. The fact that she couldn’t get a better deal than 2.7% from an estate agent last year is very interesting, to say the least. Now she’s an STR and in the same “damn, I hope I’m right” class of VIs lurking around here. As for estate agents, God bless ’em (for now.) Those lying, cheating, evil people got me quite a few bob more for my sale last year than I could have through Tesco and earned every penny of their commission over a rather protracted sale.

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  • Thanks Paul

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