Thursday, 6 March 2008

What is all this about.....????

Here is a curious post from the House Price crash forum. which I though I would share with you. I wonder how prevalent this kind of caper might be.

" I started trying to sell a house for £240k in April last year; a 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) Sanitised 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 dilemma 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've 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."


Anonymous said...

This rings so true. The whole property economy is a pyramid scheme built and maintained by banks, brokers, the RICS (note the encouraging reports they continue to give out on the housing market--many of their members are also estate agents), and the government, which has raked in hundreds of millions from stamp duty. It is bigger than the South Sea Bubble, and it is about to burst like a pustulent boil. Look what is happening in the USA, with exactly the same criteria--loose lending, blind regulators, and mortgage brokers who only tell their clients half the story.

traderboy said...

looks to me like it's the bank that lent the money to the firm to buy the house that was duped (i'm guessing there was a mortgage since a valuer was involved). plus anyone who relies on the land registry number of previous selling price to buy this house in the future.

sounds fraudulent to me on the part of the buying company and the RICS valuer?

oh and way OT...went out for dinner on monday night locally (central london, but not in a tourist area at all), and restaurants were packed (not just the one i was at, also noticed people queing to get in the place next door which was also full)...pubs also full this week...what happened to the slowdown??

Jack Mason said...

The average Brit is always the last to know that a recession is looming. A complete lack of interest in anything other than his own pleasure. Who in Britain knows what is going on anywhere except in the office and down the local bar? Booze. Booze. Easy credit. More booze. And then--WHAM.

ukhousingbubble said...

Brent Cross is my guide. No signs of a recession there.

As always, thanks for all the comments.


Anonymous said...

People are still living off the dregs of the credit gravy train, I expect April will be the start of the real "credit crunch" for the majority of the population, mortgage resets galore, the bank wants its money now the party is over!

Oh I cant MEW anymore..better put it on the credit card..

Oh cant put it on the CC as its been withdrawn/limit cut

Oh no I cant use the over draft anymore!

Game Over

Insert More Credit.

The End.

Join the queue for the Soup Kitchen do not pass not collect £200!