Aibu to think homeowners are being unreasonable about prices?

[Justawonderer2018]

I live in London so maybe this is very niche but I'm a first time buyer and am shocked at some of the prices people are demanding for their flats.

Im looking at 1 bed flats and it's clear some of them are way over priced and that they're not selling plus the market is falling yet owners are holding out for more.

One flat I saw last year was on for 600k. Way over priced for what it was even though it was a lovely flat. It dropped to 585 earlier this year and is now on for 565. Even still it's probably not worth more than 499k but apparently the seller won't entertain anything less than the current valuation even though he's been waiting over a year to sell. He bought it for a lot less so it's not like he is losing money.

Similarly saw another flat on top of a shop - nice but very small. The owner wants 475k. I would say it's worth about 400k. She bought it almost 20 years ago and it's a rental property for her.

The estate agent told me people are just stubborn but it seems to me to be pure greed. At the same time it's clear that these sellers can and will simply wait till someone comes along who can afford their vastly inflated prices.

Im slightly baffled and irritated

Most people are selling in the market in which they have to buy (if you know what I mean). If you're lovely and reasonable when setting a price for your own property, you'll be left without enough to buy elsewhere.

It’s sounds like your issue is with the market value of property in London. Unfortunately it’s an international city and centre for finance. So it is full of rich people who can afford the prices being quoted. It has been like that for generations now. Slight downward readjustments happen but overall the demand is high and supply is low. City wages ensure that some people find it affordable. If that’s your argument then state it. If you are really rehashing the debate on how some owners got lucky with price increases in past 20-30 years and should now take a haircut, just say it. Or reread the many many threads here and elsewhere on the issue. Why not try for a new goody issue.

The examples you reference maybe unrealistic sellers. But why are you looking at property in the range of £475k to £600k. That’s doesn’t sound like serious buying. The estate agents will be telling you whatever they think you need to here to trust them. That includes agreeing with your opinions on pricing. They need you to think they actually know the value of the property. They probably don’t agree with you and will get bored showing you property you have no interest in buying, for ideological reasons.

In a failing market in takes time for it to get through that that that is all the money you are going to get for your property.

When people have been used to property prices going up and up and there being silly money around, it takes time for the penny to drop.

Most sellers are also buying so unles you're exclusively looking at buying up stock being offloaded by landlords or probate sales I imagine your 'sellers' are having the same problem the other side too.
Also, estate agents lie! Of course they're telling you they think you should be able to get a better price but it's the seller being unreasonable. Exactly as another poster said they inflate the price to you when selling to encourage you to use them then try and knock you down quickly to make the sale. Ours tried exactly this, we were planning to price drop on the day we received an almost asking price offer which we accepted straight away. But I would put money on it that they told our buyers that we were insisting on the higher amounts anyway.

If you can't afford London prices, can you move further out. I'm an hour on the train from London. Essex coastal town. And a flat is £200k, a house £350k. Still a small fortune, but nothing on the cost of London.

Yeah I notice this too. It is a vicious cycle of sellers being advised to be a bit cheeky and see what they can get and buyers there being a bit cheeky in return and seeing how much they can slash off. So prices get higher and %off is getting higher and it is all now getting a bit ridiculous.

all the londoners moving to towns an hour away though is pricing locals out of their own towns though. Council houses that were sold off for £40k 20 years ago are now 300k plus here. Just turning all the towns an hour each side of london into bloody dormitories for commuters.

I know people do what they do to survive and thrive but its a problem. Its fucking over the young

I follow a certain SW London area, 2 bed flats. Prices have definitely come down in the past year, but some vendors still seem to be deluded.
It's usually pretty obvious when properties are overpriced - they hang around for ages, on with different agents, hoping that will make a difference (no), and eventually there are eductions in grudging little nibbles, chasing the market down. It's not uncommon to see 5 or 6 'nibbles' in as many months - after several months already on the market.

Some people convince themselves that their property is 'worth' £Xk, because a similar property sold for that 2 years ago.
But that was then.

A lot of the blame for the slow London market/falling prices is blamed on Brexit, and I dare say that's a factor, but IMO in London it's also down to prices having soared into the realms of the ridiculous - and unaffordable for so many. In the non fashionable SW area I watch most closely, prices of nothing-special 2 bed flats virtually doubled between about 2010 and 2016 - from roughly £250k to £500k.
This sort of madness is just not sustainable - something was bound to give eventually.

Arguably op, on the flip side, people could say you're the greedy one. You wish more property for your money than the market allows or you can afford.

Greedy or unrealistic people exist on either side of the chain.

I live in an up and come bit of London. Pre-Brexit things were selling at open days, at asking price plus 20/30%. Even, frankly, properties that were really poor. I think some vendors are still in that mindset.

In a failing market in takes time for it to get through that that that is all the money you are going to get for your property.

When people have been used to property prices going up and up and there being silly money around, it takes time for the penny to drop.

Agree. I live just inside the M25. We had several years of extremely rapid price growth here. Houses were selling almost as soon as they went on the market for a long time. People got used to this but it is obvious now that houses are hanging around for ages. I live in a small village and there are also least 15 houses that have had For Sale boards outside for months.

It can be hard to accept that in the current market, your house might not fetch as much as your neighbour's did two years ago, regardless of how nicely you've decorated it etc.

YABU

Anything is worth what someone will pay for it.
If you paid £400k for a house you wouldn't sell it for £350K (and by the way do what exactly to pay off the extra £50k you now owe the bank?) just so no-one would think you were greedy.

And you want a flat all to yourself?? For "cheap"? Some people might call that greedy.
Best not to use emotive language to describe a basic business transaction: (Are you greedy when you buy a new coat if you already have a perfectly decent one in the wardrobe? Are you greedy if you go to work and get paid more than you need to buy the week's groceries? Can you see where this is going?)
And pity all those who might find themselves in negative equity - because it is awful.

It's not 'greedy' if what they are doing is selling to buy another property. They never see the money, but they need it to leverage to a new property.

What is greedy is people who inherit a house in a terrible condition and who put it on the market at the top of the price range. They make me cross.

It can be hard to accept that in the current market, your house might not fetch as much as your neighbour's did two years ago, regardless of how nicely you've decorated it etc

Sure. It can also be hard for folks to accept that in a stagnant market that their budget still doesn't buy what they want. There is always two sides to every story.

It sounds as if you have a poor understanding of the market. If your expectations were reasonable for the current market, you would not be having trouble buying - you would have a choice of similar properties, similarly priced.

As it is, sellers may be unrealistic, but so are you. After the 2007 crash, everyone expected property prices to fall, but instead sellers chose to sit tight, the market stagnated for a few years with incredibly few sales, and then took off like a rocket when the economy stabilised. There were lots of disgruntled buyers in 2008 and 2009 complaining that sellers were delusional, but the market is never wrong. If Brexit does indeed provoke a crash, prices may fall substantially. But will you be so keen to buy then? As of now, if you can't find anything at a price you consider fair, then you just can't afford current prices.

Many of these people are probably quite happy where they are, and have decided that it’s only worth moving if they get £x amount that will allow them to move into a property they really want, not a compromise that’s £100k less.

That’s fine. That’s their choice. Selling homes is not a public service; they’re perfectly entitled to set their price at a level that they might be unlikely to achieve but if they do it will fund the next place they want.

You are perfectly entitled not to pay that price.

By describing them as ‘greedy’ you are implying that they are making a binary choice to set price higher or lower. You are completely ignoring the third option - not to sell at all. London seems likely to end up like 2008, where the crash was short-lived and had limited impact because many potential sellers simply took their places off the market or didn’t put them on at all.

The market has tanked in some parts of London, particularly the south west.

Sounds like you're looking in a pricey area - zone 1 or 2, north of the river I'm guessing? Here in zone 3/4 south east, it's nowhere near that for a one bed and I've seen prices comes down a lot over the last year or so, to the point where you could get a decent house for £450k. It's all about location and at some point people have to move further out to buy what they can afford. That's more likely to happen than a relative bargain coming up in an area that will retain its appeal whatever happens economically.

Credit fuelled asset bubbles make every leveraged buyer look like geniuses until they pop.

The government's only way out of this mess - which they and previous govs fuelled the fire of, is to hope that we get wage inflation exceeding house price inflation and so it slowly brings ratios back to reasonable levels.

But too much wage inflation and interest rates go up, and then everyone who has taken on these massive mortgages will be in trouble fast....

Yes I don't really have much time for people who say sellers aren't being greedy.

I don’t have much time for people who think perfect strangers somehow owe them something.

What’s ‘greedy’ about deciding how much you’ll accept for something you own - probably your most valuable asset? If I they don’t sell it, that’s their issue, not yours. No one owes you a house at a certain price. Buy one you CAN afford.

A house is only worth one house

IME many people don’t get there’s price you can’t sell under – where sitting still and paying the mortgage down is the best thing. It’s a huge blind spot many people have.

Last move we need to pay mortgage back and get out enough deposit for next house same size as existing house.

In our case needed exact same amount of deposit as we put in first house which took 10 years two incomes no kids to save. We knew due to prices drop the so 8 years repaying mortgage and insurance pay out of 10 K used to pay down mortgage and small fortune spent on that house we wouldn’t "get back" as it were.

But not getting the initial amount we put in and we couldn’t buy in new area so we waited and got a price we could move on with though it took time and that was fine as we had time and meant our children had stability while we waited.

I got hearty sick of being told we were being greedy and should knock 20 K off because buyers fancied a new kitchen or as long as we weren’t in negative equity that was all that mattered and should just sell.

I think a lot of people,at least when they first put it on the market, look at the figure they need to buy what they're hoping for next. If they can't get that they can't/won't move anyway.

I don’t have much time for people who think perfect strangers somehow owe them something

I'm with you on this. I simply can't imagine looking at a property with a price tag higher than I can afford then deciding the owners were greedy becayse they won't accept my lower offer. That's as entitled as it gets.

It's up to them what they sell their house for. It's up to individuals to decide if they wish to pay it. If they don't thr property won't sell at that price. And the owner will retain it.

What's greedy is saying well you should sell me your house for the price I wish to pay, not the price you wish to sell it for. It's their house. They can do with it as they please.