Neighbours selling way below true value (impact on us.)

[GloriousGoodwood]

This is a WWYD but I accept there is nothing to do really.
A neighbour has recently put their house on the market at 20-25% lower price than ours was valued at by the same agent, some time ago. It's also too cheap looking at other neighbouring houses that sold this year. This is in an area where prices are rising and always have been.

They clearly want a quick sale. The same agent sold an identical neighbouring house last year at the same knock-down price (sold in days.) Again, the vendors only wanted a quick sale and weren't fussed about the price.

However, as there are only a few of these houses of the same design in our road, it's not going to make it easy for us to sell ours at what we (and several other agents) consider the right price, when we decide to move.

Don't get me wrong, I'm not deluded, but these two houses were marketed way below their real value (elderly owners not really in touch with the market.)

We've muttered a few things to them querying their valuation compared to ours, but they don't seem to want to know.
How are we going to sell ours at the 'right' price?

An 8-10% annual price increase is not sustainable so when you come to sell the market will likely have stalled / fallen anyway.

A couple of places the exact same as ours sold for under market value s few years ago, the people living there didn't move so I assume they sold to family or bought from their landlord?

I don't think the value that someone else paid for a different house 2 years ago will have any significant impact on prospective buyers when you come to sell yours. It would be different if you were selling now, but a lot can happen in 2 years so I wouldn't worry about it.

If it's priced well compared to the market when it comes to be advertised then it'll sell, things are worth what people are willing to pay for them.

What an odd thing to be annoyed at. A house is worth what someone is willing to pay full stop. Plus the market is SLOW right now. If the vendors need a quick sale then of course they should put it on at an attractive price, why wouldn't they

Is it odd to be annoyed at ending up with negative equity? I would think that comes under Pretty Fucking Reasonable to me.

Sounds like these houses are SELLING for true market value and not the greedy, deluded prices that most time wasting kite flyers try asking.

Unreasonable to be angry with people deciding to sell for the price they can get at that time.

We purchased our 90's box a few years ago at a knock down price, run down inside but not advertised as this.

Subsequently (within months) our neighbours property sold for the same as we paid (1 bedroom less and a semi rather than detached),

A year on in a relatively stagnant market a mirror property to ours in the close sold for 25% more, it's also cosmetically tired. Owner wasn't in a rush to sell, someone was in a rush to buy!

Our sold price doesn't seem to have affected others sold prices.

It is unusual for this to happen. If anything agents over value houses in an attempt to flatter and get the business, then drop the price a couple of months later. It's hugely common.

Could it be this is the market pricing at this time? As much as you'd not want to accept it, it could be possible. Or there could be work required on the house. Even if a price was dropped for a quick sale, it usually wouldn't be too much and agents try to minimise it as much as possible.

It's in their interest to drive pricing in the area up as they are commission based.

It might also be the case that the low valuing and sale of the first property has impacted on the value of the second.

"The price is usually advised by the EA, and as EAs are paid on a % of sale price it is hardly in their interests to sell houses at a lower rate."

It really, really is in the agents interest to cut the price, here's why:

1. Many of the pushy, crap EAs that would do this have minimum fees- so make their money either way.

1. The EA will make around 1%, so the money they 'lose' by selling cheap is about 1/100th of what the customer loses. The individual staff member may see some commision, but not massively affected by a 20% drop in price.

1. The time and effort in selling a house varies wildly. It can take days on a website followed by a little chasing or it can be months of print adverts, viewings, phonecalls. The costs to the EA of years on the market, versus a few days are enormous, but the revenue is the same. If an EA can cut the price early and guarantee a sale, it's all profit for them.

Interesting replies!

Of course the true value is what someone will pay. But unless there is a bidding war and gazumping, no one is going to pay more than the asking price, are they?

The fact is if something is a sheer bargain it will sell fast.
If it's something that would still sell- perhaps in 2/3 months instead of 2-3 days or weeks- it doesn't mean a higher price is inaccurate.

We had 3 valuations including one by the agents selling their house. All were higher. Even allowing for estate agent inflation and flattery, this neighbour is priced too low. They seem desperate to sell and once an agent knows that, they price it low.

I'm talking of a lot of money- without giving precise figures, it would be like the difference between £600K and £750K. Comparing it with other houses currently for sale in the location ( a small village) it's cheap.

"It is unusual for this to happen. If anything agents over value houses in an attempt to flatter and get the business, then drop the price a couple of months later. It's hugely common."

In my experience some chains advertise heavily and rely on very pushy salesmen and a strong brand to do the opposite and push for a low valuation.

They will train the sales staff to listen for cues and pitch accordingly:

1. I want the best price- We can get you [insert stupid quote].
2. I want to be realistic- All the other EAs are lying, you will get [10% below market value].

Both followed by aggressive closing techniques. If customer 1 doesn't agree to a big price drop in a few months they don't pusht that house.

If it were well below the market rate and desirable them surely there'd be some kind of bidding war.

Houses have a habit of finding their own value based on supply and demand

"I'm talking of a lot of money- without giving precise figures, it would be like the difference between £600K and £750K. Comparing it with other houses currently for sale in the location ( a small village) it's cheap."

So buy their house and make a huge profit :-) If it is that much, the sign will be down in days. That said, if there are few similar properties, then the price will have much more variability than you think. If someone really wants your property, then they will pay what you want.

If it were well below the market rate and desirable them surely there'd be some kind of bidding war.

^ This.

Interesting that your valuation was in 2009. I would hazard a guess that the agents who valued it then didn't make enough of an adjustment following the crash.

You can hold out for any price you choose when you come to sell. If you get no viewings it's a sure fire sign a house is overpriced. If you get viewings but no offers at the level you want then you have to weigh up the feedback and other factors.

Ime the agents who don't get valuations right tend to over rather than under value.

But your valuations were 8 years ago OP, so 2009. That was a difficult time (we bought in 2009) and i think there was a bit of sharp practice going on by EAs trying to kick start the market again, plus a peak of activity that wasnt sustained as people who'd been waiting for a positive sign tried to move. As someone else has already said, you need an upto date valuation.

I think you're perhaps over estimating how much your house is worth and making lots of assumptions about the sellers in your close and the estate agents (you can't possibly know what the sellers said to the EAs and vice versa).

But your valuations were 8 years ago OP, so 2009.
No. I said we had a valuation 8 years ago then ANOTHER one 18 months ago. I am sure I posted this.
The house that's selling is priced at the 2008 price.

I'm not stupid! Lived in this village for 21 years and have had a close eye on sales.

The neighbour's house is now sold.
In 24 hours.

I rest my case.

English housing market is bizarre.

Here (nice area in Scotland) if a house was put on the market with a low o/o asking price, it would just mean that it would go to a closing date within a week and the house would still sell for (over) its market value (as in, way above its Home Report valuation).

You didn't say you had a valuation 18 months ago OP. Look, when you decide to sell, get up to date valuations and take it from there. With luck there will be sufficient other sales locally at prices you feel are more representative and these two will be anomalies which can be explained away.

These sellers must be daft to accept the first offer on the first day. And the agents could not have been doing their job.

So 2 similar houses have recently sold for 20-25% under what you think they are worth yet you are adament your price is correct. If they were selling so cheaply there would be a multiple bids up to a price which is right for the market at that time, I presume this has happened.
EA's always come up with over inflated prices to get you onto their books, i'm in Wokingham and lots and lots of houses have started at say 600k and come down to 525-550 or 475 down to 425 presumably because an EA has given them an inflated price to get them on their books only to gradually lower their expectations over the next few weeks. If you think any owners do not care about what price you get then I would have to say you are deluded. Try putting yours on the market and see what you get offered versus what you think is the "right price"

Our house was a repossession so we paid considerably less than others on our street are worth. It also reflects on our Zoopla value. It didn't effect the price of others selling on our street though. However, when we last changed our mortgage we had it valued and it was back in line with the area.