Friday, May 29, 2009

Why buying a house should be easy, but isn't.

Of course, it's a bit silly to ever think that buying a house might be easy. And I don't have a great deal of previous experience in the matter, but I'm now in a position where, with the help of a friend with more money than me I'm trying to find a house to buy. Somewhere cheap. So far, so average.

The problem seems to be our viewpoint: we think: the housing market is screwed, no one has got any money, housing prices are supposed to be going down, sellers should be ruddy thankful that we're showing them any interest at all. We are like lotharios at a disco full of spotty virgin spinsters. We want to take advantage and have our evil way. We want them fawning over us, offering us carpets and all sorts of extras. We want flowers, we want cheapness.

On the other hand there are the other players in the market: the sellers and other people looking to buy houses.

Now the sellers are a problem, partly because there's not that many of them. No one wants to sell their house for less than they bought it - or for less than they've been told it was worth 2 years ago. If they have any choice in the matter people are staying put, building extensions or making granny live in the shed. So you would think that the few that have houses up for sale would be desperate: divorcing, leaving the country, on the verge of bankruptcy - or developers unable to sell their house for the past 6 months and ------------ this is the key bit -------- willing to drop the price a little bit... please?

That was our hope. Now is the time to get a bargain! But it's not quite working out like that. As one seller said last week, "Well I bought this place for xxx+25k so I have to sell it for at least xxx+23k." Which is fair enough for her if she can find someone to buy it. But at the depths of what is supposed to be the biggest fall in the housing market since.... whenever the last one was - do we have a right to expect that prices might be a little less than 5k of what they were two years ago? This seems like this should be our time. The one and only time it might be possible to get on the 'property ladder'. Without bankrupting yourself...

Except, at the bottom of the market - the 1st home end of town - that's exactly what everyone else is thinking. Prices aren't low, but they're not going up week-on-week - so people are buying. Houses are selling.

We looked at a house - and in our mania for a bargain - offered 4k less than they were advertising it for - they sold it a week later for the list price. Which is fair enough, but... it's not what the papers keep telling me the situation is.

It might be different higher up the market - no one selling/no one buying - nothing happening. But at the bottom of the pile things are happening. Houses are selling. Except, obviously, not to us.


  1. I don't think the market at the first-time buyer end of the market has changed much; except that it is harder to get a mortgage.

    A couple of thoughts here;

    Check out the photo on the estate agents site. You can usually tell what time of year it was taken and get an idea as to how long its been on the market. Sellers with a house that's been for sale for a while are more amenable to reducing their price.

    Avoid a house that has been done up to sell. The seller will stick out for their price and buyers will go for an easy option too; many buyers cannot use their imaginations to think of how THEY would change the house; they want something that looks good now.

    So going for something that needs a bit of work is where you'll be more likely to get a bargain.

  2. Another really brilliant *ping* idea, would be to look at houses going under the hammer... repossessions maybe? They need to get their money back don't they?

    It's a thought..

    Just a quickie from another perpective... I want to sell my property. It has gone down in value, so until the market levels out somewhat, I am not going anywhere, however, the other houses I am interested in are not going down in value. You just have to keep looking :)

  3. Take the question mark away Sarah; repossessions can be a very good source. I've known a number of people who have struck gold using that option.

    Also don't confuse 'asking price' with 'value'.

    When the market is as it is the former will likely be a fair bit higher than the latter.

  4. As a seller, or not, we are fairly desperate to sell, but we can't go much below a certain price or we'd be screwed.
    So we're not selling any more. We can't. No one wants to pay that price for this property just now.

    I have noticed that asking prices* have gone up again and more properties are coming on the market just recently. It's picking up. Joy. For a few months there, I could have afforded a house if only we'd shifted this one, no can do any more.

    * here the asking price is an offers over price, ie the minimum, so is a better indicator of actual value/price wanted. Nightmare for buyers though as you don't know what the seller is really looking for if you want to buy something.

    Experience of buying and selling in England though, the asking price is set pretty close to what you want, the asking price will be less if the seller will accept less. A couple of k less is about as low as I'd go, the rule of thumb I used was if you want it, really want it, offer the asking price.

    A new rule I've imposed on myself for future: never buy anything you don't want to hang onto for a good while.

    Would you like to invest in a spectacular 2 bed property in Kirkcaldy? The sellers are lovely and willing to sell for less than the o/o price.

  5. Also, repossessions are usually silly cheap and as a result they get snapped up. And by those who have better bargaining power. We've expressed an interest in a few, had to withdraw because we hadn't sold, they went quickly... and appeared for rent immediately.

    First time buyers and people looking to move up are scuppered because the bargain hunters with a bit more cash always get there first. Offer for something that isn't a bargain and - not overpriced, just not a bargain - you'll get it.

  6. Wow. That's plentiful words of wisdom there.

    Write Blog: the photos idea is a good one but there's also a website: - which tells you how long a property has been for sale for - and gives you the discounted properties in the area - if there are any. that's quite fun... though not too useful so far.

    As for the decorating - that's exactly what I want! somewhere that puts people off but could be restored/improved. We're still looking but it's looking like I will have to put my stuff in storage and move elsewhere in the meantime. Can't be rushed.

    I love the idea of property auctions but it seems risky as you have to pay 10% of the price on the day and if anything goes wrong with the house or the mortgage you can lose that. So that's too risky for my blood.

    MD is right with: "A new rule I've imposed on myself for future: never buy anything you don't want to hang onto for a good while." I guess I'm too simplistic and want to jump in. luckily my co-buyer is much more sensible. Sometimes. And at other times, I am. Although we might end up never agreeing.... Sigh sigh sigh. Oh well, worse things happen at sea, as my mum used to say...

    But no, MD, sadly the Kirkcaldy residence is too far away for me to commute. Tis an awful pity.