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!

Perhaps in some places (like the SE) where the prices were really inflated then that might be reasonable, but I don’t live in one of those areas.

I’m realistic and I do expect to be offered a bit less than the asking price but I’m fully willing to wait it out if need be.

I don't think so. I live in the SE and so do all my family but we would still find a 30% reduction in price ridiculous.

Wait for what though? Financial experts are saying that rates will be higher for longer, possibly for a decade or more.

Your buyers will probably find price increases over the last decade or so ridiculous, and most of them are constrained by their lender anyway so it all balances out.

It doesn’t all balance out. Most people wouldn’t sell at 30% under asking because most people aren’t desperate to sell.
I mean I wouldn’t mind selling at 30% under if I were moving up the property ladder and more expensive properties were also selling at 30% under because that would be a net gain for me. But I don’t see that happening around me in the property market in the south east.

Doesnt matter what most people do, the house that sells near you for 30% less that is the same as your house drops your value by 30%, that is how the property market works, you dont need to sell to be subject to valuation, this recent market was running on super low borrowing rates nothing else, you can`t control the market by not participating in it (unless every single seller went on a "sellers strike", which to my knowledge has never happened in history?)

The situation you describe in your second paragraph won't happen overnight but it may well happen in the future. We are only at the start of falling house prices and at a bit of a stand off between buyers and sellers (imo). It only takes a few forced type sales for new price levels to be set and it may then be the case that those sellers who were wanting to sell at some point soon but aren't desperate start to panic as they anticipate that, next year, prices will be lower so they pile into the market. This is exactly what happened on the way up, remember. So many buyers panicked and bid over asking, fearing that they would never own a house, so many rushed in to buy as interest rates started to rise, etc. The reverse could easily happen too; FOMO. We'll see.

No houses near to me sell for 30% under asking. The recent sales are still close to asking.

How do you know? There’s a lag of several months before sold prices appear on the Land Registry.

The latest data I have access to shows prices still being achieved very close to the asking price.
The very latest sales prices are not yet available I agree, but I know that houses are still selling quickly in my area, within a few weeks. So there is nothing to suggest that sellers would need to accept a 30% reduction.
It would be incredibly foolish for someone to drop the asking price so dramatically within a few weeks. Why wouldn’t they reduce the asking price by 10% first? If houses sell within weeks & don’t have to be reduced it is pretty obvious they got close to the asking price.

If I have to wait ten years then I have to wait. Unless you’re desperate you don’t sell off what’s potentially your biggest asset for 30% less… not when that’s not yet reflected in the prices around.

If someone offers me 30% less at this time I probably won’t even bother negotiating with them. There’s no point. I’ll wait till someone more serious comes along that isn’t a chancer.

He/she wasn't suggesting that houses are selling at 30% under asking but that it only takes one or two in your local area to reduce the value of all the others around it.

Why the assumption that house prices will rise even further (in real terms, obviously) if you just wait for 10 years? Just because it's happened before? That doesn't mean much at this juncture because the economic situation is different.
The last massive boom since the GFC has been led by cheap money. I suspect we will get more QE at some point but it is bound to cause more inflation or even hyper inflation which cause other, dramatic problems.

Prices will always go up if you wait. I've lived through several recessions. We live on an island, more people are arriving every day, way too few houses are being built. Therefore prices will go rise again in time. Look at the last 50yrs, prices only go in one direction long term.

Isn't it easier to upsize if prices are going down?

Quite probably. I was responding to someone who said I might have to wait a long time to see house prices go back up. They aren’t wrong I might… but they haven’t crashed yet. From what I’ve read the news seem to allude to more of a gradual decline instead of a crash anyway. A stagnation of the market if you will.

If all prices are falling respectively then it doesn’t matter, I probably would still sell because the property I want will be less and it won’t matter a jot. I don’t have a very expensive property, I have a starter home which was expensive enough but it’s my first property and they are in demand and always will be.

I still think 30% under asking isn’t realistic at this point. It might come to that. It might not.

A lot of people on here seem to want a crash to happen and I don’t understand why, because on my understanding if house prices crash, then it’s usually harder to get a mortgage in the first place 🤷‍♀️

People here could have a large amount of cash savings or equity. Like i said, easier to upsize. Due to the inflated house prices for bigger homes, many people don't have their ideal home and a lot of people have been priced out of home ownership (often the people who need a bigger home).

We are waiting for the market to drop to upsize already seen falls of 25-30k for the kind of house we want. Our house will probably max fall by 25k but the upsize might fall by 100k-125k.

Well i hope you have the difference in cash, the banks wont lend it

It’s going to have to be a hugely expensive house to fall by £100k. Even the most pessimistic forecasts are for a 12% fall.

I can well believe houses selling for 500k this summer will be 400k this time next year.
Prices move at a glacial pace, but a lot of houses over 600k that didn’t sell have reduced 50k already. That’s my experience in my hunting area.

You may believe prices will fall by 20% but I’ll bet mine on you being wrong. They didn’t fall as much as that in 2008 or 1989/90.

Yes house purchase won't just be funded by equity.

Different market now, with much less capability or support for mass bank bailouts. If you look at the situation in Ireland around 2008 / 09 the drop in values was vast in some areas. But they didn’t appear on sales data because, in most cases, a drop of more than 30% becomes a repossession.

i don’t think England has seen the true scale of the financial mess yet. Feb / March will be the cliff edge.