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?

"I rest my case", not really I think shows that the house was priced to sell and if it was that much under someone else would have placed a higher bid.

1. If you aren't planning on selling ATM - stop worrying about it.
2. If you can't stop worrying - get an ea (or 2 or 3) round to value it and then you'll have your answer

I have just accepted an offer on my place which is only 2k more than what it sold for in 2009. I needed a quick offer due to relocation though and priced mine to sell, so on the low end.

Would I care about your opinion on the matter if I were your neighbour? No. Purely due to the fact you don't know their individual circumstances, and to be honest it's not really anything to do with you.

I work in a niche market in the property and finance sector and I can assure you one anomaly is not going to cause a surveyor issues with a valuation on your home. Plus valuations can always be argued.

Estate agents tend to overvalue hous s significantly to get you on the hook.

Markets are priced at the margins, in a rising market the buyer will pay a high price, guaranteed to make a profit. This is sentiment, it applies also in a falling market. Once the bubble pops then buyers are cautious - why pay more if the value is falling - its risky trying to catch a falling knife.
A few more "low" prices will set the snowball in motion, housing has become a socio political hot potato.

I can think of an underpriced house marketed at 315, which I arranged to view on the Saturday. On the Thursday, the agent phoned to say two offers were already in at over 350, and that the elderly vendor was going to accept one of them that day. So I never even got a look in! Just because they've marketed low doesn't mean they'll sell low

I sort of get what you mean... half my st is non standard construction which means that a similar sized bungalow will sell for 80k less than a normal construction one. It makes the average sold price unrealistic for the standard house... but people will investigate and find out what things are worth to them. It's only worth what someone will pay

What i mean is my neighbour house might sell for a lot less than mine but once a buyer found out it was non standard and not mortgagable then that discrepancy makes sense. Not sure about your case though

Some agents are full of shit, unfortunately. The same agent valued the freshly renovated house up the road, our house which has been renovated externally (because it leaked like a sieve) but merely maintained internally and an absolute wreck, down the road, all the same design at the exact same price. They just wanted to woo us. We went with a more level headed agent and sold within a week.

The renovated one up the road hadn't had any interest at all after 2.5 weeks on the market.

You don't know what it's sold for yet though, do you?

Also, you say you might want to sell in a couple of years. Lots can change in that time and I don't think sales today will have so much of an impact in two years, especially if the houses that sold for the lower prices were renovations.

Maybe your neighbours have had a look at the mortgage lending market grinding to a halt, transactions and prices falling in London and the SE, Brexit, record highs of consumer debt, BTL tax changes, falling wages, high inflation, a possible Labour government in next 2 years and thought to themselves you know what? Lets get rid before prices fall in our own area by 10-15%. This could easily happen and everyone is entitled to make their own decision. It is a market and the market will only pay what the market will bear. No point worrying about things you cannot control, life is too short for that.

Your neighbours are being very shrewd selling down by cutting the price.We have been in a disinflation cycle since around 1982 and this has seen falling interest rates and rising asset prices through the whole cycle.However it has also meant massive debt levels.This cycle is ending and will probably go out with a bang followed by a reflation cycle that sees interest rates reverse the falls since 82 in probably around 7 years.8%+ rates are almost certain towards the end of the next cycle.People should of paid most of their debts down the last decade with these interest rates being so low,but anyone with high leverage will be in a very difficult situation going forward.Houses will likely fall by around 50%+ in bubble areas,maybe 35%+ elsewhere.It might be worth thinking hard about pricing your house to sell now at the 25% less that has worked rather than wait and end up chasing the market down.

@Macrostrategist
"We have been in a disinflation cycle since around 1982" "This cycle is ending and will probably go out with a bang"

Wow, you can predict 40 year economic cycles- something no other economist can do. A Nobel is surely imminent....

"People should of paid most of their debts"

....though not the one for literature, I suspect.

"followed by a reflation cycle"

I don't think that word means what you think it means. Reflation is a tool of economic policy, and it has been employed already for years in most major economies.

@GloriousGoodwood
"It might be worth thinking hard about pricing your house to sell now at the 25% less that has worked rather than wait and end up chasing the market down"

Well OP, having had such great advice from a Nobel prize winning economist, I hope you are on to the estate agent already.

Pmsl at some of the utter bollocks touted on this thread as expert advice.

Only on MN should you be grateful your neighbours are reducing your equity by selling below market value you home owning Capitalist bastards

Agents will price and accept a low offer for a quiet life if they have a seller that will let them get away with it. The commission difference between selling at £275K and £300K (assuming 1.5% commission) is £375 for the company (much less for the agent). Not worth the marketing/viewings versus a quick in-out sale.

My Mum and Uncle sold my Granny's house for well below what it was worth. It was an unmodernised 1930s house in a very desirable part of London. They accepted the opening offer, which was made by the first viewer, on the first day it went on the market. If I had been selling that house I would have got at least £50-100K more for it. But they didn't care, didn't need the money and just left it in the estate agent's hands.

I wonder if the agents had someone lined up to buy it? Like one them per chance?

Yours overthinking

That's possible but I would suspect it is more likely that they had people registered looking for that sort of house in that area.

Amazed this is still going.

Prices have not dropped. Comparing all similar houses in the area, neighbour's is cheap. I have done my homework on it all in the 20 years we have lived here. It's not just me saying this- several other neighbours are saying the same thing.

Macro sorry but I think I'll pass on your advice.
You though might like to take a literacy course so you know the difference between 'of' and 'have' .
People should of paid most of their debts down the last decade

I reckon when you come to sell the only thing which will affect the price of yours is the prices of other stuff in the area which are for sale at the same time.

If I was house hunting and saw in record that a house in the street sold a year ago for a lot cheaper I would assume it needed work doing on it. I would only compare the price of your house to what else I could get at that time.

Alot of property is selling via auction now. Secondly, you don't know other people's circumstances whereby they may nerd a quick sale for a variety of reasons for a reduced price or a high price due to other reasons
Suggest you set yourself your own price according to your personal requirements

"It's not just me saying this- several other neighbours are saying the same thing." Yep you are deluded and to be honest with your attitude I hope there really has been a 25% drop

This is happening on our street. Speaking to the elderly neighbour who is selling, he said he didn't go for the recommended sale price as he thought it was "just too much, too greedy".

He sold to the first viewers. They had "lovely children" (really gushed about them). He cancelled the other viewings the estate agent had set up later that day which were with a single person, and an older couple ("because it's a family home").

He is completely in possession of all his faculties by the way, just not motivated by the extra money, and is a genuinely nice, unselfish person.

Must be very frustrating for you OP but I would think that competition will prevail in getting you the true market price when you sell. Agree there is nothing you can do unless you happen to casually mention the situation to the sellers' offspring / heirs .

It's possible the two houses need work if previously owned by elderly people. Electrics damp profing new boiler roof damp course redecoration throughout updating. All expensive!