Why don't people reduce if the house isn't selling?

[donttellmehesalive]

Around here, it's a buyers market now. Everything has been on for months, lots coming back on, most reduced. I've only seen one sold in the past month in my price range.

But I'm fascinated by those properties that went on in the second quarter, were wildly overpriced, and are still there or reduced by a tiny amount. Some houses have come on in the past week for more than they were on for in March or April.

I always assumed they were people who were chancing their arm and didn't really care if they sold or not, or would only move if they sold for a lavish amount.

But I was recently talking to a neighbour who has been on for a year. She went on when everything was selling, but for about £100k more than the house was worth. Over the year, she's reduced by about £10k per month. It's now £120k less than it was on for last October, but there still isn't any interest and she says she's desperate to downsize and move near family. Why not price to sell in the first place? Do people take bad advice from optimistic agents, or what?

We bought in 2018. It had come up on my searches initially but at £1,200,00 I had immediately discounted it as it was light years away from our budget!

A semi detached property (in London), with additional scope to extend than other properties on the street (STPP) due to the plot - in need of significant work (rewire, new plumbing, boiler etc). ‘Normal’ properties were going for circa £850,000 in this condition… We paid £900,000.

They’d been convinced by Purple Bricks that it was worth £1.2 million. Son was desperate to sell as Mum had passed and Dad was too frail to be on his own anymore but it took almost a year to find a buyer (us). 🤷‍♀️

The nice older houses have skirting boards 7 or 8 inches high. It is easier to hack a hole out and put the plug socket there. Saves on plastering.

This is an issue.. why? Help me out in my stupidity.

I agree with what pp have said about renovating costs. If a house in turnkey condition sells for £500k, you expect the dilapidated one next door to go for less. At one time, if modernising it would cost £70k you'd expect it to be £70k cheaper than its perfect counterpart. But that hasn't been the case recently.

I can't blame the vendor for trying and lots of them have struck lucky over the past couple of years. It's the ones that are still on a year later, with no or minimal reductions, that have been completely ineffective, that amaze me. I guess they just aren't that bothered about moving and the market usually catches up with them eventually.

In a time of 10% inflation (as now) a £500,000 property falls in price (in real terms) by £1,000 a week ! A £500,000 property left on the market for a year, will then be worth only £450,000 (in real terms).

I agree, plus they could have realised and invested the equity to see their money grow more instead of steadily declining.

I'm seeing this a lot where I am too.

In the end, if people really need to move, they will reduce the price to get a sale.

People quite often fancy moving but don’t desperately need to. I agree that they get a distorted idea of what the property ‘should’ sell for, based on what they need for their own next property, or recouping costs spent, or just an arbitrary sense of value perhaps based on a peak price.

People forget that none of these things matter and quite simply, your house is worth what someone will pay. It’s fine if they decide no-one will pay what they want, so they aren’t selling. Most people realise after a while not selling, that they either need to lower price or accept it won’t sell at the moment and can try again later.

Can you show the arithmetic that gets you from bought at 315k, sold at 700k giving 600k profit?

Too late for many now, they will be looking at reducing a lot more than if they had sold last year, mortgage rates at 6% (I think they will hit 10%) mean chains will be collapsing all over the place.

Most of the market will just sit tight. There won’t be much for sale. Though, there will be some bargains due to distressed sellers.

ilIt will be a buyers market, but not much stock available.

Hmmm. Mixed feelings on this one. We said when we bought our house on the market that if we didn’t get the price we wanted, we’d stay put. We had loads of interest and it sold for 20k over asking. We then based our onward purchase on this, and found somewhere 20k more than our original budget.

When that sale then fell through, we put the house back on the market for 20k more than the first time. The reason we did this is because that’s realistically what we needed to continue with our onward purchase and there’s no point in wasting potential buyers time in putting it on for less if we needed X amount.

Ours sold straight away again.

I’m sure lots of people saw it go back on the second time and thought we were greedy fuckers and that’s fine. It isn’t my business what other people think of me. I needed a specific amount to move house and if no one wanted to pay it then that’s fine, we’ll stay put.

Because the estate agents have put it in vendors heads that their house is "worth" x amount, and accepting anything less than x would be selling for "under value".

I viewed a property last month which in my view was priced at £100k more than the current market would tolerate. I offered the £100k less, which was rejected, then upped my offer by £25k, which was also rejected.

Last week, 2 weeks after the above, the vendor reduced the price by £50k, so now the difference to my last offer was £25k.

Yesterday, the EA called me to enquire if I was still interested in buying it...I was more than happy to tell them I'd completed on another property last week.

I'm pretty sure the vendor is now wishing they had accepted my offer, as in another month they'll have to reduce by another £25-50k, to the level I'd originally offered at.

The market has definitely changed, vendors really need to recognise that to get their properties shifted.

Getting harder to do that now though, things are changing daily and some people HAVE to move/sell, it isn`t a choice for them if they want to get on with their lives.

www.financialreporter.co.uk/is-the-95-ltv-mortgage-set-to-disappear-brokers-react.html

Most of the market will just sit tight. There won’t be much for sale. Though, there will be some bargains due to distressed sellers.

ilIt will be a buyers market, but not much stock available.

I don't really understand this as it's easy for some to move up the ladder in a falling market. If my home drops by 10% & so does the next purchase that 10% is a bigger cash value.

Sometimes it's marriage splits. Couple can buy one house but then find they can't afford a smaller house each when they divorce, so they price the marital home to sell to try and give them most potential profit.

Surely if doesn't matter if houses become cheaper as if your house drops by 20% so does the one you want to buy.

A chocolate box cottage near us in 2001 sold for 120k. One of those online calculators gives a 2020 value of 600k another 425k.
She's recently added a conservatory and extended a porch both with out planning or building regs. The original recurved build is now 20 years older but she wants 645k to reflect all the hard work over 20 years.
It's had one confirmed viewing in a month.
It's an absolute bodge job behind the fresh paint.

It matters if it puts you in negative equity, or with insufficient equity to access the most competitive mortgage deals. Or of course if you are downsizing due to a separation or change in family or financial circumstances

Once people see a house price falling as much as that, they start to wonder if there's something not right about it. It's never a good idea to overprice just to chance your arm- IMO it's better to be more realistic- then, at worst, if you underprice, you should get more than one offer and can go to best and final.

Fair enough about the carpets, but the rest of it is fine. Personally I like the kitchen, I hate modern grey and white, and I like wood, and though I'd retile the bathroom with the pattered tiles, that's just my personal taste. Other than that all I'd be doing would be redecorating, and who doesn't do that anyway? The decor is neutral enough to be OK to live with until you got round to each room.
I don't know the area so don't know if it's overpriced in terms of size and location, but that's really not a house that looks like it needs a lot of money spending on it. It's not like it's a doer-upper.

You don't get anything for 'hard work' from me if you don't have Building Regs approval on it. I'd never buy a place that had had work done without Building Regs, or at the very least retrospective approval, because the most serious reason people don't is because they haven't had the work done properly. And possibly not even safely.
(Pray for me, mates, I have the next stage of the BR inspection regime tomorrow on my roof....😉)

Your situation sems reasonable enough- by the time you had to remarket, prices would have gone up.

The house we bought had been on the market for about a year. It was a fixer upper. We were told that the house owner had passed away and her children inherited it. They were not in any hurry to sell and knew eventually someone would pay asking price. It was worth it but it was a big project for us. Maybe it was greed? The house has gone up massively in value since we did the building work . Maybe the owners knew it’s worth and stood by it .

Modern guidance suggests sockets are put higher up on walls, as for older and/or disabled people crawling around at skirting board height to plug stuff in is a nuisance.
When we came here (old tall skirtings) there were still some sockets in the skirting. They looked horrible, and stuck out much more than if on the walls, so were easily knocked by hoovering. When we rewired we had them put in on the wall, higher up. It was a pest filling the skirting boards, much more than filling the plaster runs to the new positions.