House prices and stamp duty

[Looking for a house]

Hi there,

I'm a first time buyer, and am currently looking for a house in the Midlands. Looking on various estate agents websites, I have noticed that there isn't much on the market the moment, and very few properties are being listed at around the 175k stamp duty mark - everything is either around 150k or 190k+.

I have a couple of questions about this...

1. Is the lack of properties normal for this time of year, or are people hanging onto houses hoping that prices will rise again?

2. Are estate agents marketing properties above the stamp duty mark with the expectation that the price will be negotiated down to below 175k?

3. In general, are estate agents listing properties at prices that take into account the fall in prices over the last year or so?

Any help with this would be gratefully received!

Many thanks in advance

[tridentmorph]

Hi there, in my humble opinion;

1) Traditionally a quietish time of year with school holidays etc, probably exasperated by the general market conditions with mortgages hard to come by and negative equity meaning people are struggling to move. General consensus is that the market is slowly improving regarding these things though (at least in the South).

2) Whilst the £175k price point is not such a big deal when valuing a property it does still come into play and when looking at a property that would be in the 175-185 range most agents will advise the seller on the chances of stamp duty effecting the offers they receive, ie expect 175k

3) Almost certainly if they have any sense, if the property doesn't sell then they spend out on all the marketing, advertising, time and effort of selling without making a penny and in a tough market that is an office closing offence if you aren't careful. However there are still some greedy/unrealistic sellers and valuers out there so each house should be considered on a case by case basis.

Hope that helps

[Looking for a house]

Indeed it does - thanks very much!

[brian]

Originally Posted by Looking for a house

1. Is the lack of properties normal for this time of year, or are people hanging onto houses hoping that prices will rise again?

2. Are estate agents marketing properties above the stamp duty mark with the expectation that the price will be negotiated down to below 175k?

3. In general, are estate agents listing properties at prices that take into account the fall in prices over the last year or so?

1. I'm personally not seeing a lack of properties, as much as a lack of buyers, but obviously regional differences come into play. Spring/Summer is normally peak property buying season.

2. Maybe, but don't count on it.

3. My personal observation? Not a chance. Remember, estate agents who take % fees of sale are interested not in selling the property as fast as possible, but in selling the property at as high a price (and therefore commission). Even in the downturn, I've seen agents add 20% to price to comparable properties on the market which aren't selling - and, surprise, their new listing does not sell.

[Property Cashpoint]

I agree with Brian summer is usually the peak season. I've recently been looking for my mother in Leicester and there are a few nice houses around the 175K mark. I've noticed quite a few repossessions on the market at the moment.

[RobbieG]

I think people are hanging on waiting for prices to rise or exceed previous levels. Unless they're in negative equity though it's all relative as the property they move to should also have been reduced.

I also agree with Brian though, it is a traditionally quiet time.

[Darth Marty]

Originally Posted by brian

1. I'm personally not seeing a lack of properties, as much as a lack of buyers, but obviously regional differences come into play. Spring/Summer is normally peak property buying season.

2. Maybe, but don't count on it.

3. My personal observation? Not a chance. Remember, estate agents who take % fees of sale are interested not in selling the property as fast as possible, but in selling the property at as high a price (and therefore commission). Even in the downturn, I've seen agents add 20% to price to comparable properties on the market which aren't selling - and, surprise, their new listing does not sell.

My personal observation - Thats bollocks. I work on a % basis and no sale no fee and as always whatever offers are made are passed onto the vendor to decide. If its low its good, if its high its better but the decision is always the vendors. I have never and will never value high simply to get the business and to be honest I dont really see the sense in what you are saying, its contradictory in so much as - Remember, estate agents who take % fees of sale are interested not in selling the property as fast as possible, but in selling the property at as high a price (and therefore commission) And -Even in the downturn, I've seen agents add 20% to price to comparable properties on the market which aren't selling - and, surprise, their new listing does not sell

Well if it doesnt sell we dont get paid so whats the point in having it on at an unrealistic price?

[brian]

Sorry, but that's what I see - here in the Scottish Highlands ReMax for example offers property significantly higher than similar properties from other estate agents. I've also heard complaints about Grampian for trying to charge high prices that result in properties not selling.

If you offer property at a realistic price, all power to you and your customers - but a lot of estate agencies are not, and there is still a real problem with sales prices being offered far above reasonable market value.

Went to see two flats a few weeks ago on our local high street - very over priced, both have been on the market for over a year. But no sign of the price being knocked down.

[mortgage_advisor]

The way I look at it, a property doen't have a real value above that what it would cost you to buy the land and materials and pay to have it built. Anything above that is compensating for the time and effort in building it and then for the intangible aspects of it. And all of these points are worth a completely different amount to different people. So to say a house is worth x amount is just wrong. It is only worth what someone is willing to pay for it. And just because a house on XXX street sold for £X does not mean that another similar property on the same street has that same value, it is simpy down to what a given individual is willing to pay for it.

So if an estate gent says that a house is worth £X, if they can get a buyer to pay that much, then they are correct, and if it takes a year to do so, then they are still correct.

This brings me to my point here, how about estate agents have to value every property as a 3 month price, whereby they are certain they will get at least 95% of the suggested value within 3 months, or otherwise they pay the client a small fee.

This may seem ludicrous at first, but think about it for a second. Every agent would always be giving you a realistic price with every valuation, they would have to be really knowledgible of the area and market to do it, and they would have added motivation to sell. Surely this would get rid of the sharks and allow realistic pricing. It would also compensate sellers if the agent did a crap job and overvalued the house, as in that time they may have sold it had they only gone to a different/better agent.

Admittedly this is just a random idea I have just thought of, and have not thought it through properly, but I like it. Any thoughts?

[mortgage_advisor]

Or anothger thought, how about when you want to sell your house, the agent pays you to market your property, they give you a value, and if you agree to that, then if they can find a buyer willing to pay up to 95% of that figure within 3 months, then you the seller are contractually obliged to go through with it or alternatively compensate the estate agent.

Again, just more random musings, but welcome ant discussion.