To cringe at the British mentality on the property market?

[GinDaddyRedux]

N.B full disclosure I am British, and a homeowner. before anyone questions!

I've read a number of articles online, and a number of posts on here, about the property market after easing of the COVID-19 lockdown. Some of them talking about a drop of 7%, some of 20%. Goodness only knows what's accurate here.

This wasn't the thing that grated on me though. It was the bitter, nasty comments on one newspaper that "young first time buyers are insulting if they offer 10% below asking. They're usually the sort who can't manage money anyway." Or "just because you ask for a discount doesn't mean you're going to get one! Greedy! I worked hard for my investment!!" etc. One even went as far to say "never, ever lower your price for anyone. People who ask are taking the piss."

AIBU to feel the whole mentality around housing is what is so wrong here?

The belief that house prices must, and should, inexorably rise no matter what the economic or social circumstances of the UK, just because millions of Brits have ties themselves up in that dream and want a slice of it?

Surely where we should be is a situation whereby if you need to move, you move. Obviously if you can ride out a crisis like this and have the space, great. But a house is a dwelling first, an investment second as far as I see it.

Therefore if first time buyers want to buy something this year, and make an offer that reflects their reality, why is it insulting or cheeky? Estate agents are legally obliged to put them forward. So. Why the "emotion" as if they are robbing someone's pension pot?

It's because I firmly believe too many people have tied up some of their hopes and self worth in housing. It's "insulting" and "cheeky" for someone to offer lower than asking price, yet we don't think twice about haggling the sticker price on a new car. Granted, a new vehicle isn't imbued with years of memories. Yet there are people who treat it like a personal insult.

AIBU to think some people need to accept they won't get the heady sale prices of 2016/2017, if you need to sell, you just sell. No one is being "cheeky" by asking to buy it at a price they consider reasonable.

I didn’t think we were specifically talking about first time buyers?

If you really think buying and selling a house is the same as buying and selling a PlayStation then you’re so far removed from reality you probably don’t own a house or have a job.

True dat!

If sony decide the new playstation is £500, I don't offer Curry's £300, as that is all I am prepared to pay.

But if not enough are willing to pay £500, the price drops.

The commenters referred to in the OP are clearly rather naïve. It's common practice to offer at least a bit under the asking price. Whether they actually get that discount will depend on what other potential purchasers offer, and how keen the vendor is to sell.

I thought it was also fairly well known that estate agents tend to over-value properties to get them on their books.

People also forget that whilst there is a market price for a type of house in a particular area, based on demand and supply, each individual house has its own market price too, determined by what that particular buyer and seller will buy and sell for.

So, there could be 2 identical houses for sale. The buyer for one could make a very low offer and it’s accepted, whilst the buyer for other finds the same offer rejected and the seller then accepts a higher offer. Each house sale is a separate transaction with individual buyers and sellers determining the price it goes for. There is no ‘right’ price or ‘right’ offer.

Sellers are sometimes cross to get a particular offer because they know a similar house sold for more or they feel their house is worth more or they have some % in mind below which they consider rude. But this is daft.

Anyone can offer what they like. Sometimes significantly below asking price offers are accepted. Making an offer is just that....an offer, which can be accepted or rejected. It’s not a personal insult or sign of approval, just negotiation towards seeing if buyer and seller can agree a price.

I might laugh at a so-called low offer. But my neighbour with an identical house might accept it. Neither of us are right. And it wouldn’t be correct if o decide the buyer has no idea of market prices - it just means we are not in sync and our buying and selling plans don’t coincide so we won’t be able to agree a transaction.

At this time of economic uncertainty and recession, sellers more often will probably learn that significantly lower offers will be made. They can feel offended if they want or they can laugh and think the buyer is out of touch. As always they can refuse and hope for a better offer or simply withdraw from the market if they choose to. But thinking an offer is cheeky doesn’t change what buyers will pay and even if someone later is willing to pay more, it doesn’t mean the first offer was wrong or cheeky.....purely a sign of what one particular buyer was willing to pay or the basis they were willing to start negotiating from.

As prices drop, many people will shift from being offended by low offers to snapping them up as they realise much less might be offered in a further few weeks. Trouble is, people take a while to get there and have trouble forgetting what properties sold for previously, not realising it’s entirely irrelevant and today you can only get what those who actually wNt your particular house are willing to pay today, if you want to seal the deal.

Houses are simply worth what someone is willing to accept. I've put in an offer way below asking price (25%) because we believe that the house is worth that much to us and no more, they don't have to accept it. We do need to buy somewhere but not desperate and will not pay over the odds (in our opinion). Nothing to do with covid by the way, just seems very expensive compared to others that have sold in last 2 years and we have a max budget

There is no such thing as a “cheeky offer”. Cheeky asking prices, on the other hand…

Too much money on the economy is tied up in property. I think property will decline on average by about 20% this year but much more over the next few years in real terms (ie house prices will drop 20% and not increase but inflation will pick up elsewhere in the economy).

I feel very sorry for those that have bought in the past 5 years and will be trapped in negative equity.

As prices drop, many people will shift from being offended by low offers to snapping them up as they realise much less might be offered in a further few weeks

Depends on how low though doesn’t it? If I’m selling a house that pre covid was worth 400k I might now accept offers of 380k ish but an offer of 200k WOULD be laughable where I live. Location is still very very important. Some areas you can get a 3 bed house for less than 100k and others you can’t even get a studio flat for that.

I think it depends on the context, our property is our first house and we have put in a lot of money to extend and renovate as nothing had really been done for a long time. I'd hope that the price has increased even if it isnt in line with what we've paid in to simply reflect the work done. But I know we will probably never make the same money back on it as what we have spent but its our home and we intend to be here for a long time so for us it's worth it.

@sunflowery
Unfortunately I think you have had very bad timing.
Sadly when you bought you were probably under pressure from all around about “getting on the ladder” before you were “priced out”.
At the time it would have seemed a reasonable move,nothing to suspect prices would do anything but rise.
We are in totally new times.I wish you well and if you hold onto jobs and make extra overpayments you will be in a better place than some others.
Any first time buyers now will know to either hold off looking or offer at least 10 percent less than asking.And that is just as it stands at the moment,we have not even gone back properly to work and counted the cost up after the first lock down.Who knows how far prices will go in future.

Most people have never seen a house price crash. I remember someone in the 1990’s buying a flat (an entire flat) on a credit card! Not just a deposit but the whole thing! This is the worst recession in 300 years apparently- people are dreaming if they think there isn’t going to be a massive crash (And I am a homeowner)

And chuck a no deal brexit in the mix too- we are truly fucked!

With all the ranting about "not having a garden" during lockdown, I don't agree that "everywhere except central London will tank". I think that properties with large gardens will become increasingly desirable and therefore expensive in the coming months.

“Truly fucked” is one way of looking at it. “About fucking time” is another. As it was put in the first reply: It's a shitty Ponzi scheme based on a necessity. I have a feeling there are going to be a lot more of these types of thread in the months ahead. For those sneering at anything more than a 5% drop: you ain't seen nothing yet. By all means, don't sell. I'm sure your value will be locked in...

Desirable locations won’t mean anything when there’s a massive recession - I lived in Brighton in the 1990s and someone i know bought a huge regency studio flat in the most desirable square in the city for 15k. In the boom it was worth 300k. If there is no work, no one will buy houses.!

@somenerve I agree it’s a massive, state supported Ponzi scheme that had gone on FAR too long

@Shinesweetfreedom thank you for the well wishes, it’s very kind!

We are both public sector so hopefully secure jobs (although I know that’s not guaranteed) so we plan to overpay as much as possible and just sit tight.

No point even thinking about offering just now, step back and see what develops first.

My home is appraised at 500,000 dollars. I'm not going to eat 50,000 dollars just for kicks

I don't think people generally sell at lower than they'd like for 'kicks'...

People can keep their prices as high as they like as long as they like but it doesn't mean their house will sell at that price.

We've bought a lot of houses (moved a lot) and I don't think we've ever paid full asking price. Likewise, when we've sold we've put it on at a price fully expecting to accept less.

@GinDaddyRedux Most people barely have any savings, assets etc. outside their primary home. There was a study last year that said the average household debt in the UK was £15k.

This middle class obsession with house prices is because it is literally the only asset that a lot of people own and the growing numbers make them feel “rich” even if it doesn’t affect their disposable income or actual quality of life. Anyone who’s successful won’t even bother listing their primary home as an asset (in fact, in order to open some private bank accounts or be treated as an “accredited investor” by US SEC law, you should be worth above a threshold that doesn’t include your primary residence value).

I agree OP. If you don’t ask you don’t get! Obviously you wouldn’t put an offer in for £80k on a house valued at £190k and expect a reply l, but say £160 it’s worth a shot. Probably not going to get it but you never know.

I think property is relative for the majority though. If you’re a home owner and want to upsize then you’re property might not go for what you’d like, on the flip side though, the property you purchase won’t be as expensive.

Whilst from the outside it might look great for FTB, if (or when) we go in to recession, banks won’t be throwing money at anyone unless they’ve got large deposits etc... so they might be able to afford the property on paper but trying to get the lender to accept your application will be no walk in the park. This in turn will probably be a period of stagnation where nothing much will happen.

They can whinge and whine all they like, prices are surely going to tank. But full disclosure. When the market was very different and I was selling my flat, a couple put in a piss take offer and however much they increased it after each rejection I didn't trust them. So decided never to sell to them. I wasnt affronted. Its just a business transaction. They took a gamble and lost. Fair play to them, but i wasnt in a chain and in no rush. So its a gamble. But i dont think that much of a gamble in the current circumstances.

The price is the price, and it's determined by the market, not by the buyer or the seller in any one transaction. I wouldn't really worry about huffing and puffing or histrionics on either side. It doesn't affect the market value.