The properties are out there!
Watching a popular property website, it seems that houses are still going on the market. There are a lot of boards out there! So why are they not selling??
We know that there are buyers. We talk to them all the time. But why do they not buy the houses that are available??
The answer is an easy one. For argument sake, lets call it a bubble. In fact, lets go further... lets call it, "The Overpricing Bubble."
What happens is this.
9 estate agents go to value the same house.
The first one goes in and gives a valuation based on the market value, the lack of property in the area and add 10%.
The second one goes in and prices the house £5000 more. This is in the hope that the seller gets greedy.
And so it goes on.
Suddenly a house worth £250,000 is now on the market for £300,000.
The buyers steer clear. And wait.
Everyone knows the tricks. Overprice and then reduce reduce reduce. Eventually landing at the original £250K - hopefully before the contract tie in runs out.
The property sits there. Stale, stagnant and looking like something is wrong with it.
Buyers attention fades. They watch the price drops. They know the market just as much as the sellers. And they don't feel that they should be paying over the market value.
Why should they?
12, 16 or 20 weeks fly by and the buyer comments are always the same.
"I'd pay 260."
"It's worth 255 tops."
The agent knows it is overpriced but they can't say that. After all, they were the ones that gave it a value in the first place right?
The contract ends. The seller picks a new agent. And the process begins again.
The house goes on the market for wherever the last agent left off.
If they got 2 price reductions and the £300k house is sat on a property portal for £285K. Still £35,000 too much.
The reductions begin.
Eventually the final agent gets the price to £260,000 and a buyer at £255,000. The sale is done.
Mortgage surveyor comes in and down values to £240,000 because of a roof problem.
Sale falls through and the process starts again.
The seller, by this time has had enough and withdraws the property, deciding to stay.
What a waste of everybody's time.
This bubble can not last for ever. Something has to give at some point.
The job of an estate agent is to give an honest appraisal of a property and to get the best deal for the seller.
These tricks have given estate agents a bad name for far too long.