Offer 30% below asking

[CheekyFakers]

A number of valuations all arrived at the same marketing price.

Healthy number of viewings to begin with (though feedback notes didn’t quite match who came through the door, numbers wise) but no offers. To be fair, this was right in the mini-budget aftermath.

After pressing the agent, one chap came to view. Took a few days to come back with an offer 30% below asking on a £1.7m property.

Is this pure CFery? Is the market that bad? Or have agents been known to send associates round to view and make guaranteed ‘no, thanks’ offers?

If it’s pure CFery, I’ll be making a note to try this myself!

It is still a terrace with tiny yard despite loft rooms. Limited market.

Articles like this today in the Times are "bear" fuel - as others have said the market will grind to a halt with only forced sellers and buyers being in the market, particularly in the overpriced SE.

POLITICS
House prices will fall by up to 30% in next year, lenders warn
Oliver Wright, Policy Editor
Thursday November 03 2022, 12.01am GMT, The Times
Banks and building societies are already imposing tougher tests on buyers that will restrict the amount people can borrow
Banks and building societies are already imposing tougher tests on buyers that will restrict the amount people can borrow
ANDY RAIN/EPA
House prices may fall by up to 30 per cent in a worst case scenario, a leading mortgage lender has warned, as higher interest rates and strict financial stress tests squeeze the market.
Financial experts giving evidence to MPs warned that the UK was likely to experience a contraction in house prices with a “very uncertain outlook” over the next 12 months.
They warned that banks and building societies were already imposing tougher tests on buyers that would restrict their borrowing, adding that conditions in the buy-to-let market were worsening.
Chris Rhodes, chief finance officer at Nationwide Building Society, said their “worst case” scenario was that house prices would fall by 30 per cent from earlier this year. Their central scenario was a fall of 8 to 10 per cent.
Nationwide said this week that UK house prices fell by 0.9 per cent month-on-month in October, the first monthly decline in 15 months and the largest since June 2020, at the height of the coronavirus pandemic.
Ray Boulger, of John Charcol, the independent mortgage broker, said he expected house prices to fall “peak to trough” by 10 to 15 per cent. Both Boulger and Rhodes said that there was significant uncertainty in any predictions.
Rising interest rates and tougher affordability checks by lenders are driving property prices down. Boulger said his company was seeing “criteria changes” that were preventing clients from borrowing as much as before.

Hadn't noticed the tiny garden! But it does have a cellar - why do they never show cellars btw ?

Property near me (NE - nice village) went up last summer for
£825k. Absolutely ridiculous as it 100% was not worth than in comparison to other houses in that region. Sat on market for a while until they took it off.

back on market this spring at 755 then reduced a few times. Marketed at 700£k about 3 months ago and has just sold.

Just because a valuation is made doesn’t mean it’s truly what someone will pay for it.

could be CF but in your case I’d be seriously looking at properties nearby to understand if I’ve priced correctly. try to be objective and honest with yourself

We offered £715k on a property near us back in July, it had been on at £750K since May. We are cash buyers. Our offer was refused, so we stepped away.
We offered what we thought it was actually worth...a nice dorma bungalow, ok side of very sought after village.
Anyway, they're still sat there at offers over £750K. We're kind of glad that they didn't accept. We'd probably offer £695K now.

We are in our second family home, both this one and the last, I offered 25% below asking price and had the offers accepted.

It's not cheeky to put in a lower offer, nobody is forced to sell at low prices. I'm still feel the offers I made were reasonable considering the markets at the time.

How long have you been on the market?
Lack of offers may be due to the current uncertainty or the price is too high

Bank of England raised interest rates by 0.75% today, so mortgage offers may be lower in the future. Predicting base rate of 5.2% in 2023 with mortgages being approximately 3 to 4% higher, so 8% may not be unreasonable so worth factoring into repayment plans.

From Guardian:

Bailey: Rates will not rise as much as expected
Andrew Bailey says that the Bank thinks interest rates will not rise as sharply as the markets expect.
That means that the rates on new fixed term mortgages should not need to rise as much as they have done, he says.
Bailey explains that the Bank’s forecasts are based on rates peaking at 5.25% in the second quarter of 2023.
Currently, the money markets imply that UK interest rates will peak lower, though, at over 4.5% next summer.

BOE is a rate taker not a rate maker. it will have to follow the FED

prices went up a lot in the sale before

Listing:£1,650,000
Year sold Sold price

2003 £601,250
+56%
2000 £385,000

I don't think it really matters at this stage whether rates will peak at 4.5 or 5.25%, affordability has already been affected for most and people will think twice about moving.

Yes...and another 50 basis point hike by the Fed is predicted for December.

It looks like the BOE are going to need unemployment to rise and wage restraint before inflation falls. This won’t help affordability.

I listen to a bloomberg financial radio almost all the time, and that is exactly the goal, high unemployment.

As Sunak said we are facing a 'profound' economic crisis. If you need to sell then expect buyers if they are in a position to proceed to want blood and you will need to give it.

www.ft.com/content/f3bb0f96-1816-4481-8318-4f7583326a4a

The world is on the road to “hyperinflation” and could be heading towards its worst financial crisis since the second world war, according to Elliott Management, one of the world’s biggest and most influential hedge funds.

The Florida-based firm, which was founded by billionaire Paul Singer and manages about $56bn in assets, has warned its clients of an “extremely challenging” situation for the global economy and for financial markets where investors will find it difficult to make money.

An “extraordinary” set of financial extremes that come as the era of cheap money draws to a close “[has] made possible a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period”, it wrote in the letter, which was seen by the Financial Times.

“Investors should not assume they have ‘seen everything’” just because they have experienced financial crises such as the 1970s bear market and oil price shock, the 1987 market crash, the dotcom bust or the 2008 financial crisis, it added.

Rothschild did say 'buy when there's blood in the streets even if the blood is your own'

He's calling a 50% drop in equities from peak to trough but can't predict when, if that were to transpire then it could equally translate into a 30% overall drop in UK house prices. Particularly in areas where affordability is at it's worst. Hyperinflation would be the worse possible outcome and it's only right the BoE takes steps to try to ameliorate this. That said hedge funds are parasites.

How on Earth would we know? Maybe it was overpriced by 30%.

It doesn't matter what price your house is marketed for. It will sell for what it is worth.

Chances are the sale falls through as the buyer gets cold feet watching BOE telling mortgage holders they are f*ucked etc., or their chain breaks or their valuation doesn`t work. IMO of course.

Bloomberg to Bailey just now - "Will you hold back from raising mortgage rates to where they need to be, to take care of mortgage holders?"
Bailey - "No, I`m afraid not".

Yes, lovely quote, is it up on YouTube yet, deserves to be seen more widely, do you think the BBC/SKY will run with it as a main piece?

Did you catch the quotes from the chancellor today, supposedly he has been out pouring cold water on the hopes of people with big mortgage debt on more mainstream channels?

If it hasn't been on the market long I'd be tempted to wait- this is a slowish time of year and a lot of uncertainty. But I'd also be thinking about whether the EA's valuation was realistic as well.