Estate agents are keeping prices up

ArraMusha

I have done some research and am of the opinion that they are keeping prices up. Ya they get a percentage of the sale, but the muck I heard today from one ...we were talking about a house outside Galway city

..."theres no economy pressure in this area, prices will always be higher here".

Offer at 40% below asking are being rejected by the estate agents straight out.....buy maybe the seller would take hand and all!!


I'm looking for larger home and I would prefer to deal with the sellers instead of these shower.

Any thoughts

EKRIUQ

Stop talking about it and do it, just go up to the door and knock and ask for the owner.

jetski

ArraMusha wrote: »

Offer at 40% below asking are being rejected by the estate agents straight out.....buy maybe the seller would take hand and all!!

Oh really, jesus i wonder why that is. ye he should have taken your hand off.

godtabh

The house is only worth as much as some one who is willing to pay it.

nxbyveromdwjpg

ArraMusha wrote: »

Offer at 40% below asking are being rejected by the estate agents straight out.....buy maybe the seller would take hand and all!!

Who anywhere, selling anything, is ever going to accept 40% less than what they've value the commodity at, straight out? I cant believe you even offered something so ridiculas, never mind are surprised to have it rejected

Caoimhín

nm wrote: »

Who anywhere, selling anything, is ever going to accept 40% less than what they've value the commodity at, straight out? I cant believe you even offered something so ridiculas, never mind are surprised to have it rejected

A commodity's value is only "worth" what someone is prepared to pay for it.
Not what someone who has an interest in it is telling you what it is worth, not what a similar house sold for 2 years ago, not what you may have paid for it 2 years ago and not what you would like it to be.

nxbyveromdwjpg

Caoimhín wrote: »

A commodity's value is only "worth" what someone is prepared to pay for it.
Not what someone who has an interest in it is telling you what it is worth, not what a similar house sold for 2 years ago, not what you may have paid for it 2 years ago and not what you would like it to be.

Well thats a nice blanket statement, and a true one, but the agent has obviously valued it at X amount for whatever reason - if you believe its worth less than that then (if you are right) market forces will surely drive the price down that direction, but are you really telling me you are shocked that someone rejects an outright offer of less than half the price they are selling something at? Seriously?

Im in the market for a car at the moment, I must go around to a dealership and offer 40% of windscreen price of the car and see what happens.. sure they'd clearly be mad not to accept, its a recession after all..

ArraMusha

nm wrote: »

Im in the market for a car at the moment, I must go around to a dealership and offer 40% of windscreen price of the car and see what happens.. sure they'd clearly be mad not to accept, its a recession after all..

If they want to sell in this market they might take the hand and all.

Similarly if someone want to sell a house, really want to sell, and have it advertised on a website or a EA's window, they need to consider any offers now. The prices are still dropping and indications are that they will remain low for up to 10years.

ynotdu

I cant help wonder why the OP is getting such a hostile reaction.

Like that fine body of estate agents have never Lied to a buyer or ripped them off?

Kipperhell

In fairness this sounds like somebody has been listening to the "chance your arm" brigade and thinking they have been getting place at huge discounts. It is obvious some people who have been giving "advice" on property prices have not being buying property.

It is not quite true that a commodity is worth what people are willing to buy it for. One of the richest men in the world goes around checking the return on businesses and checks if the company is undervalued on the returns and assets.

If selling a house at a huge reduced price means the owner has a debit and then has to rent after the sale may mean they would have higher monthly payments but no property. The value to the owner is not the same as the market value. Supply and demand rules are more relevant.

Zamboni

nm wrote: »

Who anywhere, selling anything, is ever going to accept 40% less than what they've value the commodity at, straight out? I cant believe you even offered something so ridiculas, never mind are surprised to have it rejected

What do you mean you don't haggle?
I'll give you five shekels for it.

the_syco

nm wrote: »

Who anywhere, selling anything, is ever going to accept 40% less than what they've value the commodity at, straight out? I cant believe you even offered something so ridiculas, never mind are surprised to have it rejected

A few houses with high price tags tend to be not sold for some time. And if you have to move (due to job, etc), not selling your current house is not great.

skooby

nm wrote: »

Well thats a nice blanket statement, and a true one, but the agent has obviously valued it at X amount for whatever reason -

the agent will value it at whatever price the seller tells them. you cant honestly think there is a set formula for valution of property. i was sellin two years ago and asked what i wanted for it and when i said 400k amazingly that was the agents valuation too.
and regarding the 40% thing go ahead. i built the exact same house in the next site which is 1/2km down from the first. it was also valued at 400k. had to accept 260k for it in june.
maybe im wrong here but anyone selling at the moment genuinely wants to sell. they are not interested in making money. just cutting losses and getting out.

robd

From experience of looking, 10% under asking is the floor on the asking price of a house at the moment. This is not to say that you won't get it cheaper than that. You may just have to wait for the asking price to reduce. The market is simply not functioning at present so houses are taking a long time to sell. Some are taking a few years to sell. EA's seem to play the game of pricing a house and leaving it there for a few months. If nothing is happening they may then knock 10% off. How long a house has been on the market, and how long it has been priced at that price will dictate if you could get more than 10% off or even if you can get 10% off. The EA's or sellers seem to live in fear that they will miss out on a higher offer if they accept too low an offer. The proverbial recovery is always just in sight.

Buying is a head wrecking experience at the moment. In truth it always has been. Be prepared for a long wait. The name of the game is to be able to keep you resolve long enough that you get what you want. Keep looking, keep poking. Make offers. See what happens.

In Dublin, there always seems to be a magic offer around 10% under the asking. Of course the house is still available a few months down the line and asking then gets reduced twice or more in some cases. So asking price ends up under the magical offer price.

This is just my experience. I've been involved in a few discussions about above also. I don't agree with it but that's the way things are at the moment.

kmick

In reality the EA has a fair idea from discussions with the seller what is the floor price they will accept. If you are making a bid make sure you ask for it to be passed on to the seller regardless of what the EA says.

Zamboni

I was informed that the EA is technically obliged to inform the seller on the price of a bid if the bidder has a mortgage approval certificate.
Is this correct in theory and/or practice?

Patrickof

Not strictly correct, the mortgage approval has nothing to do with it.

If the EA has been instructed not to take offers less than X, then he doesn't have to inform the vendor of any offers below that amount. But in reality, if thats the level of offers coming in, and he wants a sale then its in his interest to convince the vendor that the asking is too high.

In general, the EA is obliged to pass on all offers.

antiskeptic

ArraMusha wrote: »

I have done some research and am of the opinion that they are keeping prices up.

Completely irrational.

It's in the estate agents interest that the seller accept an offer and so the pressure will be on the seller to drop his expectations in order that the agent can clear his cut of the deal.

What possible benefit to the estate agent is there in keeping the prices of houses up (and unsold) rather than down (and selling like hotter cakes)?

shoegirl

I think its certainly in EA's interests to keep prices high in the medium to long term, as the impact of accepting considerably lower offers would result in more sales but lower commissions. So there may be some truth in the suggestion, no absolute evidence, so we can only really speculate.

potsy11

kearnsr wrote: »

The house is only worth as much as some one who is willing to pay it.

And someone who is willing to accept it.


This is the definition of Value.

the_syco

There has been a few times that I've seen in this forum, EA's not telling the seller about the "lower" price.

Patrickof

shoegirl wrote: »

I think its certainly in EA's interests to keep prices high in the medium to long term, as the impact of accepting considerably lower offers would result in more sales but lower commissions. So there may be some truth in the suggestion, no absolute evidence, so we can only really speculate.

A market in which nothing is being bought or sold is not in any EAs interest. A higher commission is secondary to cashflow.

This is true of pretty much all business, hence we have summer sales, christmas sales, new year sales - just look at the prices of 42" TVs.

potsy11

shoegirl wrote: »

I think its certainly in EA's interests to keep prices high in the medium to long term, as the impact of accepting considerably lower offers would result in more sales but lower commissions. So there may be some truth in the suggestion, no absolute evidence, so we can only really speculate.

I am an Ex EA and believe me its not the EAs who are keeping the prices high....Its the Vendors....Its their house thus they decide on price. The EA gives a guideline on what he thinks its worth but its THEIR property so they have final say in what the price should be.

If an EA can turnover a property for 200k insteak of 250k there is a difference of 750 euro based on 1.5% rate.

I am sure every estate agent would rather be gettin 3k for selling a house than getting nothing for a house over priced by 20%.

Think about it before you attack the easy target. If it was your house would you drop 50k? I didnt think so. Espicially if your motgage is around that level.

And before anyone says it of course there are muppets working as EA's there are muppets in every type of business who say stupid stuff.

This is one of the reasons why I got out of the business. Your an easy target. That and having to work 10 hrs a day 6 days a week with people rining your phone at 10 or 11pm at night looking to view houses....it was great in the boom but its a very very tough business at the moment. I dont envy any EA now thats for sure.

Rant Over

20goto10

EKRIUQ wrote: »

Stop talking about it and do it, just go up to the door and knock and ask for the owner.

This is a briliant idea. It gives the owner a chance to slam the door in his face when the OP offers 40% below the asking price.

My experience with estate agents is that they want to lower the price to whatever they think is going to sell. Why on earth would they want a house on the market thats never going to sell? Nonsense.

topper75

Kipperhell wrote: »

If selling a house at a huge reduced price means the owner has a debt and then has to rent after the sale may mean they would have higher monthly payments but no property. The value to the owner is not the same as the market value. Supply and demand rules are more relevant.

Yes and people must know that supply and demand interact, and never act independently of one another. It's like two blades of a scissors.

OP - it's a buyers market, so enjoy - but I think the 40% was a bit optimistic. If you really like the house, ring up the agent again and say you might be willing to stretch a little bit more and ask what the seller will come down to. If still no joy, then look at alternatives in the area.

axel rose

Some estate agents are not only trying to keep prices high- one attempted to exploit my personal situation and ADD 30% to a house I was viewing!

Basically house was origionally 395,000, reduced to 339,000 then reduced further to 305,000. went for a second viewing to be told that the house was mistakingly advertised at 305,000 instead of 395,000! :rolleyes: Her attitude was amazing it was almost like it was a tenner she was talking about. Naturally I offered the full and revised asking price :pac::pac::pac:.

Turns out the builder is her brother!!! Please God let her go bankrupt and homeless.

uoluol

axel rose wrote: »

Turns out the builder is her brother!!!

Hmmm .... I think I know the estate agency you are talking about - would they by any chance be based in Louth, with branches in the 2 main towns? They are absolute dirt bags and have a reputation for shoddy practices. Very unprofessional too. Was kept waiting for an agreed appointment for a viewing as the agent was getting her hair done!! And then when she did turn up she didn't have the keys with her. Idiot....

axel rose

Ha ha! Yes like the liqueur but not port!

I heard they were closed for a couple of weeks a while back.......