Value v advertised price.

shelly6

Hi
Just wondering are houses at the moment getting the asking price, or how much below the asking price is a reasonable offer? Percentages!

JuliusCaesar

thanks to ronbyrne, post 5494, House bubble Bursting thread:

http://www.tribune.ie/news/home-news...ad-to-nowhere/

Michael Grehan, MD, Sherry FitzGerald




"It's exceptionally difficult to call the bottom of any market, but particularly so in property. You can only do it with hindsight. The astute buyer now has it all their own way because they can bargain. The investors have gone and people can negotiate on price – that was unheard of even a year ago.
******In many cases, the difference between original asking price and final selling price is 50%.*******
Buyers now have sellers where they want them. The buying opportunity of a lifetime presents itself in 2009. Of course there is a herd mentality – 'no-one else is buying so perhaps I shouldn't either'. But I don't think Irish people are going to stop wanting their own homes.

spockety

shelly6 wrote: »

Hi
Just wondering are houses at the moment getting the asking price, or how much below the asking price is a reasonable offer? Percentages!

It really depends on the property in question.

Some people are living in denial, and their asking prices represent those achieved in 2006.

However, there are a number of people who have already knocked upwards of 45% off their original asking price or 2006 levels, and obviously that needs to be taken into account.

If you post up a daft.ie link here to the property in question, i'm sure you'll get a few opinions from people here on what they think the property is worth, and more importantly why they think it.

Show_me_Safety

yeah, make an offer -50% lower than asking price!

i cant remeber if i read it on boards or elsewhere, but your first offer isn't low enough unless your embarassed about it!

JuliusCaesar

If the final price agreed might be 50% of the asking price, you need to offer less than 50% of the asking price to start with. Put a note in the door if the EA won't pass it on. Vendor however may be living in cloud-cuckoo land, and hanging on to 2006 valuations.....

The value of the house is up to you.....how much do you want it? Are there other houses that you like too?

macy9

Im a first time buyer and im a little confused reading the comments in this thread; so if a house is for sale at 600,000....offer them 300,000....seriously?

Does anyone have first hand experience of this actually working (getting the property at half the advertised price?)

3DataModem

JuliusCaesar wrote: »

Put a note in the door if the EA won't pass it on.

Excellent advice. Suggest including the same and address of you solicitor to add "bona fides" to your offer.

ntlbell

macy9 wrote: »

Im a first time buyer and im a little confused reading the comments in this thread; so if a house is for sale at 600,000....offer them 300,000....seriously?

Does anyone have first hand experience of this actually working (getting the property at half the advertised price?)

No.

As has all ready been stated in this thread it depends on a number of factors.

if someone bought 750k house in 06 and is now on the market for 600k

if they mortgaged say 500k of the house and put up 250 they can hardly sell it at 300k

Every house/Seller/area/type of house/etc etc is going to be totally different.


Don't go around with a % in your mind.

Look at what you can comofortably afford (not what the bank will give you)

find houses in the area you want/can afford to live in, find out how long the house has been on the market, go and view it what sort of condition is it in will it need work etc THEN you start thinking about what sort of low balling you want to do.

House prices will drop at different %'s in different areas

an example would be a 3 bedroom house in Cabra is going to drop a lot less (in general) than a 3bed in the arsehole of Cavan

Do your research.

El Stuntman

ntlbell wrote: »

an example would be a 3 bedroom house in Cabra is going to drop a lot less (in general) than a 3bed in the arsehole of Cavan

so Cavan has an arsehole but Cabra doesn't?

shelly6

I'd rather buy in Cavan than Cabra!

In my case, its a 1 bed apartment in Mulhuddart at about 150K. There are several (2nd hand) available, and we are easy going - it suits us to buy and it suits it not to.

Half of 150K is 75K. I would feel ridiculous offering that! But on the other hand, I'm thinking that because there are so many of the same thing available in the same estate that we could just get very lucky and have a low offer accepted, and don't wanna end up kicking ourselves by offering too high!

ntlbell

shelly6 wrote: »

I'd rather buy in Cavan than Cabra!

Why?

shelly6 wrote: »

we are easy going - it suits us to buy and it suits it not to.

Then wait.

ntlbell

El Stuntman wrote: »

so Cavan has an arsehole but Cabra doesn't?

It's Cabrock to you sir.

JuliusCaesar

shelly6 wrote: »

Half of 150K is 75K. I would feel ridiculous offering that!

Look at all the property websites - askaboutmoney.com, mortgages and house buying; thepropertypin; daft.ie discussions; etc.

Everyone says you should be embarrassed by your first offer!

SarahJ

Myself and my partner are looking at an apartment for €270000, but there is also a duplex we are looking at for €299950, should we offer 270000 for the duplex first? The apartment won't go for any lower than that.

ravendude

SarahJ wrote: »

Myself and my partner are looking at an apartment for €270000, but there is also a duplex we are looking at for €299950, should we offer 270000 for the duplex first? The apartment won't go for any lower than that.

I'd probably start a lot lower than that tbh. It's easy to come up on your early offers, - but not nearly so to come down. If you attempt to reduce, - you will be met with serious mistrust, and with good reason.
I'd start with 240K (or less) for the duplex and slowly go up from there. Some would even say thats a bit high for a first offer in the current market. Give it a week or so between offers and let them sweat a little.
Time is on your side, - much more so than it is for any sellers out there.

The apartment won't go for any lower than that.

It might not sell at all then, - the market for apartments has seriously collapsed.

dblennon

I'm heading to have a look at some apts tomorow with a similar price to what your saying and I have it on good authority if your looking at the same place.

The developer & builder are in serious***serious trouble, be ballsy about prices where ever you go New property is not worth the land its on at the Moment.

SarahJ

dblennon wrote: »

I'm heading to have a look at some apts tomorow with a similar price to what your saying and I have it on good authority if your looking at the same place.

The developer & builder are in serious***serious trouble, be ballsy about prices where ever you go New property is not worth the land its on at the Moment.

I pm'd you the name of the aparments. I'm hoping its the ones! I'd love to think I could go lower than what they are asking.

ravendude wrote: »

I'd probably start a lot lower than that tbh. It's easy to come up on your early offers, - but not nearly so to come down. If you attempt to reduce, - you will be met with serious mistrust, and with good reason.
I'd start with 240K (or less) for the duplex and slowly go up from there. Some would even say thats a bit high for a first offer in the current market. Give it a week or so between offers and let them sweat a little.
Time is on your side, - much more so than it is for any sellers out there.


It might not sell at all then, - the market for apartments has seriously collapsed.

Wow 240,000, I'd be embarrassed to offer that, so from what I'm reading in this thread, thats a good price to start on.

JuliusCaesar

SarahJ wrote: »

Myself and my partner are looking at an apartment for €270000, but there is also a duplex we are looking at for €299950, should we offer 270000 for the duplex first? The apartment won't go for any lower than that.

How do you know?

If you put in an offer for 200,000 and it was accepted, would you be happier than paying 270K?

NEVER offer your maximum on first bid.......always leave room for negotiation.

It's far too much money to spend without doing a good bit of research first, so do **please** look at all the websites mentioned above. Of course you may well be super-rich for all I know (except the rich are inevitably careful how they spend....)

SarahJ

JuliusCaesar wrote: »

How do you know?

If you put in an offer for 200,000 and it was accepted, would you be happier than paying 270K?

NEVER offer your maximum on first bid.......always leave room for negotiation.

It's far too much money to spend without doing a good bit of research first, so do **please** look at all the websites mentioned above. Of course you may well be super-rich for all I know (except the rich are inevitably careful how they spend....)

We asked on viewing, and he said they are already way under their value, but sure, we haven't really got a clue of all this, it's a very scary time in my life. Rich ha, sure I'd wouldn't be looking at a €270,000 apartment if I was rich

bills

Dont have a lot of experience but have been looking myself. We know exactly what we want & where & have been watching prices for last couple of years.Went to see recently & estate agent knocked 30k off the asking price before we had even said anything. Asking price & selling price are two very different things. Try & find out what properties are selling for as opposed to asking. Some estates, similar properties can have huge differences so obviously you go in at lower scale.

jdivision

SarahJ wrote: »

We asked on viewing, and he said they are already way under their value, but sure, we haven't really got a clue of all this, it's a very scary time in my life. Rich ha, sure I'd wouldn't be looking at a €270,000 apartment if I was rich

It's his job to say that. Don't believe him.

JuliusCaesar

It's the Estate Agent's job to sell the house/apartment. His duty is to the seller/developer. EAs will say anything they can get away with, in order to sell the apartment at the *highest price*. They will make up fictitious other bidders. Do NOT believe anything an EA says.

If you are not embarrassed by your opening bid, do not make it.

Please do not be a lamb to the slaughter here - EAs just love trusting gullible people! If you really haven't a clue, do the research!!! It's too much money to hand over meekly, and then find out your neighbours paid substantially less than you for the same kind of apartment.

Freddie59

JuliusCaesar wrote: »

It's the Estate Agent's job to sell the house/apartment. His duty is to the seller/developer. EAs will say anything they can get away with, in order to sell the apartment at the *highest price*. They will make up fictitious other bidders. Do NOT believe anything an EA says.

If you are not embarrassed by your opening bid, do not make it.

Please do not be a lamb to the slaughter here - EAs just love trusting gullible people! If you really haven't a clue, do the research!!! It's too much money to hand over meekly, and then find out your neighbours paid substantially less than you for the same kind of apartment.

+1 to that.

We rented a house when we sold our own in September. The house we're renting is on at €275k. Before Christmas we put in an offer of €190k. Heard nothing back. Have had contact from FOUR auctioneers this week enquiring as to whether we're still in the market.

The auctioneer selling the house we're in asked if the offer was still on. Since we moved in here the highest price house of a similar narture (in very good condition) was €335k. The one in the worst condition was €265k. That has now dropped to 'region of' €230k.

In a new development in Waterford just this week, a 1600 square foot house has dropped in price from €335k to €240k. So hang in there. You'll get it at the right price. But first you have to get over the whole embarrassment thing.

Remember you'll never see this EA or seller again. It's your money - not theirs. So get the best price you can.:)

Freddie59

JuliusCaesar wrote: »

How do you know?

If you put in an offer for 200,000 and it was accepted, would you be happier than paying 270K?

NEVER offer your maximum on first bid.......always leave room for negotiation.

It's far too much money to spend without doing a good bit of research first, so do **please** look at all the websites mentioned above. Of course you may well be super-rich for all I know (except the rich are inevitably careful how they spend....)

Agreed. Your two most important sites are:

www.thepropertypin.com and

www.irishpropertywatch.com

I have also noticed a huge discrepancy between prices on www.daft.ie and www.myhome.ie

Daft.ie appears to be far more current with pricing. So do shop around.

SAVE_ME.222

shelly6 wrote: »

I'd rather buy in Cavan than Cabra!

In my case, its a 1 bed apartment in Mulhuddart at about 150K. There are several (2nd hand) available, and we are easy going - it suits us to buy and it suits it not to.

Half of 150K is 75K. I would feel ridiculous offering that! But on the other hand, I'm thinking that because there are so many of the same thing available in the same estate that we could just get very lucky and have a low offer accepted, and don't wanna end up kicking ourselves by offering too high!

Offer 80k, all they can do is say no. They could have only 50k-60k left on the mortgage and want to cut their losses and clear the mortgage.

SparkyLarks

I assume the people looking for the "value" of the house are asking how much can I buy it for now not how much will i be able to buy it for in a few years.

A house that was valued at 500 at the peak, would now be approx 30% less so 350,000 according to the reports out there. I agree that the price similar houses sell for in 2 years might be 250,000 or 200,000 . but if you want to buy a house now that doesn't help that much. If you want to pay 250,000 you have to wait.

The pre-bust price was based on how much was someone who wanted the house able to pay.

Today the price is based on how much is the vendor wiling to accept. Someone may have a lot of the mortgage payed off and need to move. but they may not need to move and might be unwilling to sell for less than the value of the mortgage , so they won't sell.

I've yet so meet of anyone who has gotten a house for 50% of asking. Maybe they exist, and it's always worth a go.( 50% off peak value I've seen though)

the most important thing to ask is.
1) will I be able to live her for 10 years,think kids, grankids, whatever may happen over 10 years.
2) Can I afford the life on want with a mortgage of x. but still keep the house if something happens. Partner stays at home to mind kids. Overtime is cut, job is lost for a bit.

Then all you have to do is keep offering till you find someone willing to sell you a house that meet criteria 1 for criteria 2. then go for it

For a more mathematical approach I use

Though the way I look at it is
1) price of the house at peak - 30%, less another 20%,
then
2) What could you rent the house out for x12 x 16-20
I multiply by 16-20 as it is a house I want to live in. this is a figure you should not be embarassed about offering, If they are looking for 25 to 30 times yield. They're living in cloud cookoo land, or 2007.

If prices fall to 14 times yield investors will start buying again.

gives me some figures to start at at least.

Current prices in California( first to rise first to bust, and where I'm located)
are at 20 times yield and house sales are rising. due to a lot of foreclosures driving the price down to a little under 20 times yield .

I've also noticed that the number of houses on daft has leveled out if not dropped slightly as mortgages rates have fallen( source Daftwatch graph).
Probably also due to a lot less houses coming on stream. Are people looking to get a house at todays prices though with a very low mortgage rate. Rather than waiting for 5 years when the interest rates might go back to 5%

Bee

Are people looking to get a house at todays prices though with a very low mortgage rate. Rather than waiting for 5 years when the interest rates might go back to 5%

A very pertinent question that so many people have missed!

Over the long term it may be better to buy now and lock in the interest rate rather than wait. Look at how interest rates soared after every previous market crash over the last 100 years or so and interest rate wise we are at really historical lows!

Buying property is like buying anything else, if you want something now you will pay the lowest price you can negotiate for it at the current moment or you take a chance that someone else won't buy it if you hold off and wait.

If it is something they really want folks will buy now.

There must be a pent up demand for property with lots trying to wait and see have we really hit market bottom yet. When buying increases when people believe the market has reached it lowest there will be a gradual or sudden rush to buy thus increasing prices.

The question is, will there be a property price rise to match the speed of the crash in prices or will we be back to a more gentle increase?

Investors in shares usually say it is impossible to predict the future earnings of shares and it is useless to try to time a future market

The same probably applies to property prices

ascottdub

Okay everyone, here we go.
What do i bid at?
2 houses.
1 in portmarnock that has been on sale for 2 years, started at 650K, and has now been at 500K for a couple of months. 3 bed semi, needs a bit of work. Does have great extension potential(way down the road). I feel this house should be substantially lower as it was way overpriced to begin with, hasn't sold, and needs work
2nd house is in malahide, a 3 bed, mid terrace older council house that has been sitting at 410K since last August. It's in pretty bad shape and needs alot of work. Much smaller than the 1 in port, and limited to extensions(down the road of course) as it's MID terrace.
Any GENUINE thoughts appreciated, please? Specially if there's any valuers out there, or builders, etc...

Thnaks in advance

RATM

ascottdub wrote: »

Okay everyone, here we go.
What do i bid at?
2 houses.
1 in portmarnock that has been on sale for 2 years, started at 650K, and has now been at 500K for a couple of months. 3 bed semi, needs a bit of work. Does have great extension potential(way down the road). I feel this house should be substantially lower as it was way overpriced to begin with, hasn't sold, and needs work
2nd house is in malahide, a 3 bed, mid terrace older council house that has been sitting at 410K since last August. It's in pretty bad shape and needs alot of work. Much smaller than the 1 in port, and limited to extensions(down the road of course) as it's MID terrace.
Any GENUINE thoughts appreciated, please? Specially if there's any valuers out there, or builders, etc...

Thnaks in advance

Id suggest you put up Daft links for the two houses so people know what they are comparing.

wasabi

Bee wrote: »

Over the long term it may be better to buy now and lock in the interest rate rather than wait. Look at how interest rates soared after every previous market crash over the last 100 years or so and interest rate wise we are at really historical lows!

And how does one 'lock in' these low interest rates in a market with no really long-term (5 year+) fixed rate products available?

Bee wrote: »

There must be a pent up demand for property with lots trying to wait and see have we really hit market bottom yet. When buying increases when people believe the market has reached it lowest there will be a gradual or sudden rush to buy thus increasing prices.

Or you could consider the fact that we have emigration starting up again, and that during the boom years we have had massive overbuilding and a large overhang of supply. Add to that the fact that many people who may not otherwise have bought until now or the future bought during the boom in order to 'get on the ladder' thus using up future supplies of first time buyers.

Bee wrote: »

The question is, will there be a property price rise to match the speed of the crash in prices or will we be back to a more gentle increase?

They are talking about 15%+ unemployment and the possibility of the IMF being called in in the near future, bearing that in mind do you see a swift rise in property prices in the next few years?

Bee wrote: »

Investors in shares usually say it is impossible to predict the future earnings of shares and it is useless to try to time a future market

The same probably applies to property prices

It may be impossible to predict with 100% accuracy but an informed commentator can certainly make some useful predictions. And property prices, being far less liquid than shares actually do tend to follow certain specific patterns.

ravendude

Bee wrote: »

There must be a pent up demand for property with lots trying to wait and see have we really hit market bottom yet. When buying increases when people believe the market has reached it lowest there will be a gradual or sudden rush to buy thus increasing prices.

The question is, will there be a property price rise to match the speed of the crash in prices or will we be back to a more gentle increase?

There is a slim to negligable chance of of a rush to buy in the foreseeable future, even in the medium term. Usually when a major asset bust takes place, it is a generation before another rush or bubble will again eventuate. This is because the collective memory must first forget about the bust, which usually requires a new generation. Those of us (i.e. our generation) who were bitten by the bust will be less inclined to pay exorbitant prices in the future, having learnt about financial gravity (what goes up must come down) the hard way. The crazy prices we witnessed at the height of the boom, and still characterize most of the market today are simply out of kilter with wages and affordabillity. The crazy prices have been predicated by the irrational notion that prices would keep going up.
i.e. People were disposed to pay a mad price for their house because they believed it would be at a much higher price later.

They now clearly understand that the above is not reality and will be much less willing to pay through the nose in the future.

Prices will correct. Then we will see a flat to sluggish market until the next generation of suckers come of age.

ravendude

Bee wrote: »

Investors in shares usually say it is impossible to predict the future earnings of shares and it is useless to try to time a future market

The same probably applies to property prices

This is completely untrue.

Property is an illiquid asset, shares on the other hand are extremely liquid.
It will take someone months/years to sell a house, - a month or two at best to see a sale to its closing date.

Shares on the other hand are extremely liquid, - it being possible to buy/sell instantly. So share prices can rally and an investor can miss the rally very easily over the course of a few days or weeks.

Property prices do not rally over such short time periods due to property's illiquid nature. It is highly unlikely that someone who waits now is going to mistime the property market and "miss out" if the market picks up again , which virtually all sensible commentors agree ain't going to happen anytime soon.

who_ru

ravendude wrote: »

Prices will correct. Then we will see a flat to sluggish market until the next generation of suckers come of age.

Enough Said.

tk123

Sorry to hijack OP but i'd be interested to hear what people would value this house as : http://www.myhome.ie/residential/search/brochure/10-st-itas-road-glasnevin-dublin-co&-city/DTCBT372453. I live in the area at the moment and would like to stay local but i think this is way overvalued when similar houses up the road in Santry/Whitehall/Drumcondra up to €100k less?

ntlbell

tk123 wrote: »

Sorry to hijack OP but i'd be interested to hear what people would value this house as : http://www.myhome.ie/residential/search/brochure/10-st-itas-road-glasnevin-dublin-co&-city/DTCBT372453. I live in the area at the moment and would like to stay local but i think this is way overvalued when similar houses up the road in Santry/Whitehall/Drumcondra up to €100k less?

just about every single house you can find on daft/myhome right now is overvalued.

maybe have a look in 18 months time or so

jetski

ravendude wrote: »

There is a slim to negligable chance of of a rush to buy in the foreseeable future, even in the medium term. Usually when a major asset bust takes place, it is a generation before another rush or bubble will again eventuate. This is because the collective memory must first forget about the bust, which usually requires a new generation. Those of us (i.e. our generation) who were bitten by the bust will be less inclined to pay exorbitant prices in the future, having learnt about financial gravity (what goes up must come down) the hard way. The crazy prices we witnessed at the height of the boom, and still characterize most of the market today are simply out of kilter with wages and affordabillity. The crazy prices have been predicated by the irrational notion that prices would keep going up.
i.e. People were disposed to pay a mad price for their house because they believed it would be at a much higher price later.

They now clearly understand that the above is not reality and will be much less willing to pay through the nose in the future.

Prices will correct. Then we will see a flat to sluggish market until the next generation of suckers come of age.

pure comedy, im not being rude but come on

rockbeer

One thing it's important to remember when considering what offer to make is that you don't know the circumstances of the seller. Not everybody bought in 2005/06 and is now in negative equity. Some sellers will have owned their houses for ten, fifteen or more years and, with a large chunk of the mortgage gone, will be collecting a tidy profit even at 50% of peak.

Never be embarrassed about making any offer. What's the worst that can happen? The sellers says no. No big deal - make a higher offer or move on. There's no shortage of choice.

ntlbell

rockbeer wrote: »

One thing it's important to remember when considering what offer to make is that you don't know the circumstances of the seller. Not everybody bought in 2005/06 and is now in negative equity. Some sellers will have owned their houses for ten, fifteen or more years and, with a large chunk of the mortgage gone, will be collecting a tidy profit even at 50% of peak.

Never be embarrassed about making any offer. What's the worst that can happen? The sellers says no. No big deal - make a higher offer or move on. There's no shortage of choice.

That's why it's important to try and find out as much about the sellers circumstances and have as much information as possible before making a bid.

There's still far too much denial out there but the larger drops are starting to increase so maybe some realisation is starting to come to the market but there is still so far to go your better off just keep hammering away with the saving's increasing your deposit etc

saves you wasting their time and your own time

ellejay

Hi Shelley

I have also read on boards somewhere that if you're not emabarrassed by your offer, it's too high!!

I've been saving and saving and saving for a deposit on a house so in light of current circumstances, didn't know what to to.

The house was advertsied at 360k ...so I went to view it and put an offer in 300k. (about 20years old, 3bed semi, nice estate etc.)The EA actaully laughed at me and asked me was I serious, that was a joke not an offer. I was mortified!!!

Long story short, he phoned me back about three weeks later and asked me if the offer was still on table, I told him offer had dropped to 280. We eventually tenetatively settled on 290k.

Everyone told me I was crazy to buy at moment as prices will drop even more and will get much better value for money in few months. So I pulled out of sale. And already I can see the prices dropping.

The EA told me I was making the biggest mistake of my life. Then he phoned me back to say he had another viewing was I sure as this other couple had viewed before and were very interested. I started to wobble and thought I should go back and buy it, but persevered.

Then about two weeks later he phoned me to say that the vendours were taking the house off the maket and renting it out and just about to sign, was I sure? If I wanted to go through with sale, they'd drop 5k and I'd be in by Christams.

Naturally I'd thoughts of my own new house Christmas day, but Thank God I stood my ground and let it go.

I seriously thought I'd lost the house and made a huge mistake, but to this day it's still for sale, and hasn't been sold or rented out!!

I've no interest in it now, as I know I can get more value for my money.

But my moral of my story is
1)Put very very very low ofer in, you can always up it.
2)Don't be swayed by the EA's, they're unreal.
3)Go with your gut, if you feel you have to walk away, Run. Bigger and better is just around the corner.

Duckjob

ellejay wrote: »

The EA actaully laughed at me and asked me was I serious, that was a joke not an offer. I was mortified!!!

My answer to that would be it's the agent/seller that appears to be having a laugh with the asking price they've got up.

I don't see logically how any offer can be construed as ridiculous unless there's others bidding way above it.

A lot of EAs appear to be resorting in desparation now to embarrassment tactics to try to extort bubble prices out of naive buyers. Just say NO!!!

tk123

ellejay wrote: »

I told him offer had dropped to 280. We eventually tenetatively settled on 290k.

Lol well done - make them beg! :pac::D

bobbiw

2009 is not a time to buy, maybe 2012 when homes are 30% of what they are now.

You will be able to get that 1m home for 300k, of course it will be difficult to get the loan though.

bobbiw

If you are going to buy now you have to accept that you will loose money in the medium term.

So if you buy a place for say 350k, you need to accept that it will drop to 200k in the future.

(Personaly I think it will all go the way of Iceland)

But if you have to buy, go get preapproved for 100k, have your 20 or 30k deposit. Have the broker give you a letter from the bank to say that you are approved and the funds are available.

Then go to the estate agent with all that and tell them you will offer 80k max for the 150k place. If you can close in 4 weeks they might go for it.

They know they will be taking 50k for those places in a years time. Its not like Mullhudart is going to boom in the next decade.