Dear Vendors ...

[Slacking9to5]

1. If your house has been on the market for three years and you haven't sold it or reduced the price by one penny in that time, you are overpriced. Considerably overpriced.

2. If point #1 applies, and the EA tells me you are in no hurry to move. May I ask WTF you are on the market if you don't actually want to sell?
   Please tell me you don't really believe someone with skip along and offer you full asking price?

I expect they're waiting for the market to pick up....

Maybe they really don't care all that much about moving. Maybe that price is what the house is worth to them, and they'd rather keep the house than take less for it.

Well, they've lived there for over twenty years.
I don't understand this. Either you want to move or you don't. Why would you have your house on the market for years like that?
And do they really believe anyone in their right mind will pay what they are asking?
And this is a 3/4 million pound house so not as if they'd struggle to find something else in their price range.....
I do love the property market, you realy see all sorts.

I think that it must be very hard if you have a set view of what your house is worth (based on 2007 prices) to realise that it isn't anything like that any more. I'm looking in that price range, and firstly, there isn't much at all on the market at present, at least where we are looking, and secondly, because there is so little available, it is hard to make a true market comparison.

I've seen something even funnier now!

A house that was on the market for months was taken off and out back on two weeks later at £20K more than the price it didn't sell at!

I am finding exactly this too !

We located recently and were forced to sell our house. We put it on at a realistic price and sold it within three months. Yes, it would have been lovely to get another 5 or 10K but it sold and we have the money in the bank ready to start again. Our retired ex next door neighbours still have their almost similar house (but £40k) more house on the market 2 years later.

I am currently looking at a house up for 1.25, the old lady is 90 odd and her children in their 70s refuse to budge even a penny on price. Its soo frustrating but I just don't think they can see it !

I agree, there isn't that much on the market at the moment so its doubly hard to shrug it off and start looking at the next one.

I've seen a few of those lately too Slacking.
I would love to know how the new agent convinces the seller their price is in fact too low . 'Ah, I know what your problem is, you've had it on at 925 so it doesn't appear in the searches of all the huge number of people who putting '950+' into the search engines, all we need to do is put the price up and all the people looking for a house around a million will see it!'
The house I'm talking about is a 4 bedroom ex-farmhouse in Yorkshire, nice garden but only two receps!

When I speak to the agents about houses I'm interested in viewing I now ask whether the asking price is based on their valuation or the vendor's. The "overpriced" ones always come back as the vendor has valued it.

What a very good idea LM.

Have noted that one and will use. Thanks

There is a house down the road from us that has been on the market for 4 years. It has always been on for £50k too much, seriously overpriced for this area.
I am tempted to knock and ask them why???????

The EA got back to me about the overpriced house. Apparantly they want full asking because, " They are of the belief it is worth it".

I actually Lol'ed.

We saw one like that as well.

We put in an offer below asking price but apparently they want the asking price because " if we bought it and then got planning permission, it would be worth the asking price !!!!!!!!!"

We stood no chance against that logic :)

That's the frustration isn't it?

You know what, if you are not actually willing to sell your house for a fair market going price, take it off the bloody market!

Why do you care so much though? I mean, you can usually tell from the online specs whether the price is anywhere near sensible, can't you?

If I was an EA I would be getting very pissed off with these people but as a buyer surely you can just ignore them?

It's frustrating when there are very few properties that meet your criteria though and one of them has buyers living in cloud cuckoo price land.

Well they're harder to ignore when you actually do want to move, and they come up top in every search! Even worse when you're married to someone who would happily sell low and buy high just for an easy life...

I can see how the selling low/buying high might be a problem

To realise why vendors do this, you need to understand the Psychology behind it:

Firstly, many properties have a 'catch' e.g. no parking, small garden, road noise etc. etc. The vendor will have spent years learning to live with these and they won't appreciate how offputting they are or why they may lower the value to any potential buyer.

Secondly, there is usually a strong emotional attachment to property - the vendor's home - and to lower the price means that essentially the vendor is devaluing something that means an awful lot more to them than to anyone else.

Thirdly, many vendors will be adamant their home is 'special' in some way and when they read articles about prime property/good areas holding up they automatically assume this applies to them.

Finally and most importantly, many vendors simply don't grasp the economics behind the housing market. They believe that the 'boom' years leading up to 2007 are the norm and that the current market is a 'blip' and will recover.
They don't realise that the lending conditions that pushed prices up (e.g. 10x income mortgages, 125% LTV mortgages, self-certification, interest-only mortgages etc.) almost collapsed the entire western financial system. These conditions will not return for generations, if ever. It sounds crazy but now most buyers can only borrow what they can actually afford to repay (and btw why do you think lenders now require an average of 20-25% deposit - they're greedy and immoral but not entirely stupid).

Even those few areas which are currently holding up (e.g. central London) are doing so mainly through investor money. The problem with this is that these markets are prone to the same whims as other investment markets i.e. can fall rapidly if investors see a better opportunities elsewhere and/or sentiment turns.

And of course all of this is not helped by Estate Agents overvaluing to win instructions or newspapers trying to sell papers by spinning the figures to give the impression that prices are 'soaring'.

Unfortunately, I suspect many of these vendors will still be waiting for the recovery in a decade's time.

The problem with demanding a "fair market price" where there is little supply is that the latter pushes up the former

If dozens of houses were flying off the shelves at, say, £250k, and you saw a similar house priced at £300k, you can say that's overpriced; but where nothing is selling, what's to say what the "market" price is? What the buyer wants to pay? What the seller wants to earn?
If the seller isn't forced to sell, then why should they earn less than they think is right for their house? Apple don't do that with iPads

(Speaking as a recent house buyer who had to overpay!)

It's not that there is little supply - there is loads in fact, agents have never had more properties per agent on their books, because they're sitting around on the market not selling, and it's building up steadily, as a look at the Rightmove marketed properties graph in most areas will show you (eg here. It's that there is little turnover, which has the effect you describe, firstly because buyers have less choice so it's easier to be had over a barrel on one property, and secondly because there aren't necessarily any low sales on which the data is publicly available to point to for comparison.

Yep.

We sold our house in August in 3 days.

Because I did my research, saw what other houses in that area were selling for and told the EA to price ours accordingly. Yes, it would have been nice to get £10k more for it, but we needed to move, we got an offer from a no chain cash buyer and we have a £20k deposit for a new house in the bank and hope to add to it next year.

We have been looking now since April and there are still houses on the market that have been on for 2 years and have not reduced the price...houses priced well sell.

I have no idea when/if we will find a house we like that we can afford. We are no chain, have a deposit, are willing to wait for vendors to fnid another property (we like our rental place) and can get an AIP in 24 hours and yet we have offered only £5k less than asking on 2 properties and been rejected (one of them has since been taken off the market). I honestly have no idea what vendors are thinking atm

I find it quite funny in a way that the people who are now working hardest to try to get vendors to reduce, are not buyers but the estate-agent related firms like Rightmove who need an active housing market to make money.

Rightmove guy gets quite stern in the Rightmove HPI commentaries.

Properties priced well are actually selling quite quickly in lots of areas.

I think it depends why you're selling doesn't it? If you have a young family and are buying to expand, or for a new job etc, then you need to move quickly. If OTOH you are buying to retire / downsize, and your house is effectively your pension pot, you want to get as much from it as possible.