Thursday, March 6, 2008
House Price Crash Statistical Lies
An interesting letter from a housepricecrash.co.uk post.
I first posted on here a few months back now with a dilema about accepting a low offer on a property. Since then I've had something of a roller coaster experience so I thought I'd share it.
Started trying to sell a house for £240k in April last year. 2000 built 4 bed house in the East Midlands. That price was perhaps 2 to 5k above what others were asking for similar properties in the same area, but I was prepared to lower it if need be and my house had a nice aspect and was clean and tidy, with a few extras like a conservatory. Over the summer I had very little interest so I started to do three things. 1) Lower the price, by 5k at a time, until viewers and then offers arrived. 2) Sanatised the house, decorated (in magnolia), removed old furniture, put up neutral curtains, etc etc. It was show house central by the time I sold it, having spent about 2k and many many hours of my time. 3) I got a second agent on board. By the autumn I was asking for £200k and had one offer of £190k (the dilema offer). I accepted that, but then the buyer (BTL!) pulled out. Around then the media was starting to report the Northern Rock trouble so I was more desperate to sell than ever. By the end of Nov I'd had two offers - 195k from someone with an incomplete chain (and they still have the same incomplete chain right now) and another at 197k, a complete chain, but a FTB not wanting to actually complete until early Feb. Options weren't looking good.
I then contacted several "we buy your house right now" companies. (you know the ones!). Most offered me prices in the 170's, but one offered 185k. Add to that free legal fees and no agent fees and it pretty much matched the earlier accepted offer, so I grabbed it. Only later did I discover I was actually selling it for £240k with a 55k "discount". The RICS approved valuer arrived and confirmed that 240k was realistic and compared well with other prices in the area, and that was that - property sold at the end of Nov.
The current state is that the house is back on the market again, at £235k, with "no chain" written all over the adverts (but I never had a chain in the first place!). It's now empty, musty, and has weeds in the garden. The other properties I was comparing to have taken between 5k and 10k from their prices but are all still there - they weren't (aren't) as desperate to sell as I was.
But the thing I still haven't grasped is this. Why did the RICS valuer support the £240 valuation when I'd been trying to sell it at £200k up until the week before and hadn't sold it? And how does the company that bought it hope to make anything on it? And what price will be recorded at the land registry for the sale? I don't think I'v been duped (have I?) but I can see that the so called property stats on which everyone relies so much are a complete fabrication in my case. To value a property you have to look at sold prices or asking prices. My sold price isn't what it actually sold for, and asking prices are a long long way away from selling prices.