disruptivehair
Posts: 565
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We Got An Offer, But....

Tue Apr 03, 2007 8:07 pm

Our house is on for £185,000 and we were just offered £170,000. The estate agent thinks she can get the offer higher but I've never sold a ho use before and I'm not sure what to do. I don't want to mess this up but £170k is just too low.
 
Banco
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RE: We Got An Offer, But....

Tue Apr 03, 2007 8:09 pm

Turn it around the other way: If you were buying somewhere, would your first offer be what you were actually prepared to pay?
She's as nervous as a very small nun at a penguin shoot.
 
LH526
Crew
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RE: We Got An Offer, But....

Tue Apr 03, 2007 8:20 pm

Quoting Disruptivehair (Thread starter):

You read "freakonomics" by Steven Levitt? Your estate agent might think it's less work to sell your house for 170k than keep it in her portfolio for another 5 weeks keeping her busy and in he end costing her money, she rather likes to sell it now instead of selling it in the future for 185k ... she will loose very few money, say, 1.000 but it will keep her free for other work during the next week so the advanteage of her free time (she can sped on other sales) is way more worthy than the 1000 she just lost.
There might be sellers in the future ofering 185k or even more ... it just might be the case that your agent / broker is tired of the project.

Mario
LH526

[Edited 2007-04-03 13:22:18]
Trittst im Morgenrot daher, seh ich dich im Strahlenmeer ...
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 8:43 pm

Quoting Banco (Reply 1):
Turn it around the other way: If you were buying somewhere, would your first offer be what you were actually prepared to pay?

Lord no.

Quoting LH526 (Reply 2):
You read "freakonomics" by Steven Levitt? Your estate agent might think it's less work to sell your house for 170k than keep it in her portfolio for another 5 weeks keeping her busy and in he end costing her money, she rather likes to sell it now instead of selling it in the future for 185k ... she will loose very few money, say, 1.000 but it will keep her free for other work during the next week so the advanteage of her free time (she can sped on other sales) is way more worthy than the 1000 she just lost.
There might be sellers in the future ofering 185k or even more ... it just might be the case that your agent / broker is tired of the project.

I read that book but UK estate agents get such low commissions that I'm not sure the logic applies...US ones get 5-7% and over here they get less than half that.
 
ltbewr
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:14 pm

I suspect that in the UK, much like some areas of the USA, there was a huge run up in the prices of houses due to pent up demand and reasonably low rates of interest, but it now ending.
Two problems here in the USA (and possibly there in the UK) causing the leveling off and decline in prices may be at play here too. One, is that some bought homes with adjustable interest rates in the early years, and they couldn't afford the higher rates when they bumped up to normal rates. Second, was higher risk homebuyers, getting a 'subprime' mortgage, that is with a lower or tiny down payment and higher than normal mortgage interest rates and defaulting when cannot affrord that mortgage payments as over their heads, lost their jobs or had pay cuts. You also have people that have lost their jobs and cannot afford the mortgage anymore.
I would also note that probably the most desirable and reasonalbly priced homes will still go up, but some older or less desirable homes or in less desirable locations will probably decline. That is part of the real estate cycles.
 
Banco
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:18 pm

Quoting LTBEWR (Reply 5):
I suspect that in the UK, much like some areas of the USA, there was a huge run up in the prices of houses due to pent up demand and reasonably low rates of interest, but it now ending

Nope. Housing boom has been going for 15 years now and is showing little sign of either slowing down or going pop. Ultimately, there is a shortage of housing, so the prices just carry on going up, though with more equalisation across the country than there was.
She's as nervous as a very small nun at a penguin shoot.
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:23 pm

Quoting LTBEWR (Reply 5):
I suspect that in the UK, much like some areas of the USA, there was a huge run up in the prices of houses due to pent up demand and reasonably low rates of interest, but it now ending.
Two problems here in the USA (and possibly there in the UK) causing the leveling off and decline in prices may be at play here too. One, is that some bought homes with adjustable interest rates in the early years, and they couldn't afford the higher rates when they bumped up to normal rates. Second, was higher risk homebuyers, getting a 'subprime' mortgage, that is with a lower or tiny down payment and higher than normal mortgage interest rates and defaulting when cannot affrord that mortgage payments as over their heads, lost their jobs or had pay cuts. You also have people that have lost their jobs and cannot afford the mortgage anymore.
I would also note that probably the most desirable and reasonalbly priced homes will still go up, but some older or less desirable homes or in less desirable locations will probably decline. That is part of the real estate cycles.

The run-up in house prices here started before it did in the US and house price inflation is still going fairly strong; last year York's house prices rose by 10-11%. There's still a lot of pressure on the housing stock here that doesn't exist in many parts of the US; this country is about the size of Iowa but has 60 million people living here, and that puts a massive amount of pressure on housing stock. There aren't enough houses to go around (in theory) and that pushes up prices; also there's just not enough available land to build a house for everyone who wants one. Population growth in the UK is still pretty strong and that's acting to push up prices, plus the economy is still doing well (no recessions in the last 10 years). All of those act as upward pressure on house prices.

I've never heard of a subprime mortgage market here; it must exist since British people can have credit problems just like Americans can, but it was ridiculously easy to get credit here at a very competitive interest rate. Fixed-rate 25-30 year mortgages are exotic here; most mortgages in this country have a fixed rate for a short period of time, then they readjust with interest rates. That's the dreaded ARM in the US, which is still considered to be an "exotic" mortgage but is the norm here. Repos and bankruptcies here are on the rise, but the conditions that caused the house price crash here in the early 1990s don't exist here; there's no recession, unemployment is pretty low, and interest rates are nowhere near as high as they were back then. I don't see a crash; I see house price inflation slowing down and leveling off instead of declining due to the pressure on the housing stock. I'm definitely no expert tho; that's just my lightly informed opinion!
 
BHXFAOTIPYYC
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:23 pm

Convert it back to USD - that's a third of a million bucks - then you'll feel better !!

Who valued it at 185 in the first place? Is 170 closer to it's real value? What are similar houses in the area going for? Are they selling, or has the "for sale" board been up for months? Can you meet the buyer somewhere in the middle? Do you have somewhere to go that you might loose if you don't hurry up and move? All these points to consider I suppose.
Breakfast in BHX, lunch in FAO, dinner in TIP, baggage in YYC.
 
disruptivehair
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:24 pm

Quoting Banco (Reply 6):
Nope. Housing boom has been going for 15 years now and is showing little sign of either slowing down or going pop. Ultimately, there is a shortage of housing, so the prices just carry on going up, though with more equalisation across the country than there was.

I heard that house price inflation in Northern Ireland was in the 40-50% range. YIKES!
 
BHXFAOTIPYYC
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:28 pm

Quoting Disruptivehair (Reply 9):
I heard that house price inflation in Northern Ireland was in the 40-50% range. YIKES!

I'm guessing though NI had 30 years of catching up to do.
Breakfast in BHX, lunch in FAO, dinner in TIP, baggage in YYC.
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:33 pm

Quoting BHXFAOTIPYYC (Reply 8):
Convert it back to USD - that's a third of a million bucks - then you'll feel better !!

Who valued it at 185 in the first place? Is 170 closer to it's real value? What are similar houses in the area going for? Are they selling, or has the "for sale" board been up for months? Can you meet the buyer somewhere in the middle? Do you have somewhere to go that you might loose if you don't hurry up and move? All these points to consider I suppose.

Other houses in the neighborhood seem to be moving relatively quickly, but some of them are stuck on the market in the £195,000 range; there's one five bed house on at £289,950 and it is by over £50,000 the highest-priced house on the estate, so I don't anticipate that one selling anytime soon.

Ours is a 4-bed house with a giant kitchen and 2 bathrooms; other houses that have sold for £175,000-£190,000 (and that's selling price, not asking price) were 3 beds, 1 bath, small kitchen. So...I think our house is actually undervalued.

I've instructed the estate agent to try to negotiate a higher price; we would take £175,000 if they offer it. We have no onward chain but we're trying to relocate to the US so we'd like to be out of limbo at some point.
 
Banco
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:33 pm

Quoting Disruptivehair (Reply 9):
I heard that house price inflation in Northern Ireland was in the 40-50% range. YIKES!

From a very low base though. I mean, who would have wanted to move to Northern Ireland 15 years ago?

Quoting Disruptivehair (Reply 7):
Fixed-rate 25-30 year mortgages are exotic here

Yes, they're pretty much only just coming in. Part of that was that until comparatively recently, Britain didn't have an economy that could be viewed as stable for the foreseeable future. Now, even though you might have good and ba periods in it, lenders feel sufficiently confident to be able to fix over such a long period of time. Imagine doing that in the late eighties/early nineties when interest rates veered from 8% to 17.5% and back again. Still, there are some decent 25 year fixed rates around. Personally, I'm on that variable rate that horrifies so many people!
She's as nervous as a very small nun at a penguin shoot.
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:40 pm

Quoting Banco (Reply 12):
From a very low base though. I mean, who would have wanted to move to Northern Ireland 15 years ago?

True, true. I wonder how much of that is actually from the BTL market?

Quoting Banco (Reply 12):
Yes, they're pretty much only just coming in. Part of that was that until comparatively recently, Britain didn't have an economy that could be viewed as stable for the foreseeable future. Now, even though you might have good and ba periods in it, lenders feel sufficiently confident to be able to fix over such a long period of time. Imagine doing that in the late eighties/early nineties when interest rates veered from 8% to 17.5% and back again. Still, there are some decent 25 year fixed rates around. Personally, I'm on that variable rate that horrifies so many people!

So are we, and our mortgage payment has rocketed up by about £150 a month over the last few years.
 
Banco
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:43 pm

Quoting Disruptivehair (Reply 11):
Ours is a 4-bed house with a giant kitchen and 2 bathrooms; other houses that have sold for £175,000-£190,000

Really? That's incredibly cheap, actually.
She's as nervous as a very small nun at a penguin shoot.
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 9:45 pm

Quoting Banco (Reply 14):
Really? That's incredibly cheap, actually.

I thought so too. Houses on our estate don't go for much more since they have small gardens and are 1960s semis, so they're not the roomiest houses around. They're bigger than the brand-new houses though; I don't see how anyone lives in those houses. They are ridiculously tiny!

Yep, it's cheap(er) up north.
 
Banco
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:00 pm

Quoting Disruptivehair (Reply 15):
Yep, it's cheap(er) up north.

Less than half the price compared to where I live, which isn't just cheap, it's extraordinary. York is hardly inner city slum country.
She's as nervous as a very small nun at a penguin shoot.
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:05 pm

Quoting Banco (Reply 16):
Less than half the price compared to where I live, which isn't just cheap, it's extraordinary. York is hardly inner city slum country.

Nope, it isn't...but jobs aren't exactly heavy on the ground here either, and wages in York are low. Then again, we'd have less in our pockets if we lived in London because even though we'd make more money, the increase in the cost of living would gobble the increase up and then some. Plus we'd never be able to afford a house. To get a decent career you have to go to the big city, but big city life in the UK is so outrageously expensive that it scares people away. Can't win, don't try, might as well emigrate.
 
legoguy
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:05 pm

Quoting Disruptivehair (Reply 9):
I heard that house price inflation in Northern Ireland was in the 40-50% range. YIKES!

Sadily yes. I think my parents bought the house for £17000 and its now worth around £250000... not good for first time house buyers!  Sad
Can you say 'Beer Can' without sounding like a Jamaican saying 'Bacon'?
 
disruptivehair
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:08 pm

Quoting Legoguy (Reply 18):
Sadily yes. I think my parents bought the house for £17000 and its now worth around £250000... not good for first time house buyers!

I'm glad we're not first-time buyers now; within a year of buying our house we were priced out of our neighborhood. If we'd bought our house 3 years earlier we'd have paid £75,000 for it. We paid £110,000 for it in 2001.
 
Banco
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:09 pm

Quoting Disruptivehair (Reply 17):
To get a decent career you have to go to the big city

Nah. I don't work in the city; well not much, anyway, and I live in the countryside too. It's just a question of income matching expense, that's all. Not everyone round here is an investment banker.
She's as nervous as a very small nun at a penguin shoot.
 
legoguy
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:12 pm

Quoting Disruptivehair (Reply 19):
I'm glad we're not first-time buyers now; within a year of buying our house we were priced out of our neighborhood. If we'd bought our house 3 years earlier we'd have paid £75,000 for it. We paid £110,000 for it in 2001.

Thinds are getting totally out of hand now. Alot more people will end up staying with their parents until they can land on their own two feet in the property market, me included!
Can you say 'Beer Can' without sounding like a Jamaican saying 'Bacon'?
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:12 pm

Quoting Banco (Reply 20):
Nah. I don't work in the city; well not much, anyway, and I live in the countryside too. It's just a question of income matching expense, that's all. Not everyone round here is an investment banker.

We work in I.T., and we're lucky to both have jobs in the same city where we live. I know people who commute here from as far away as Middlesborough, Sheffield, Huddersfield, and Lincoln. That's QUITE a distance. I commuted between York and Harrogate for 3 years; it was miserable and those places are only 30 miles apart as the crow flies. The commute itself took 1.5 hours each way; I got sick to death of it.

If you want to advance an I.T. career, you have to go where the jobs are...and there's just not a lot of I.T. work in the north. Hence, you often have to go south and in doing so you incur a massive rise in living expenses.
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:15 pm

Quoting Legoguy (Reply 21):
Thinds are getting totally out of hand now. Alot more people will end up staying with their parents until they can land on their own two feet in the property market, me included!

I think part of the problem is that the British seem to regard themselves as failures if they don't own property by their mid-20s. In Texas we thought single people in their 20s were crazy if they bought houses. The renting culture here just isn't strong. When I first started out I couldn't have afforded a mortgage and the thought of buying a house never crossed my mind; I figured it was something I'd do when I was older and earning more money. The average age of a first-time buyer in the US is over 30; some couples wait to buy a house until they've had (or are having) a baby; and there's not really any shame in that, or living in an apartment or rented house. It's just normal for people that age.
 
Banco
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:23 pm

Quoting Disruptivehair (Reply 23):
The renting culture here just isn't strong.

Because if you rent you're essentially throwing the money away to someone else. And since houses prices are rising, there's a feeling that the more you delay, the more you're going to have to pay out when you DO buy. But the private rental market has grown dramatically recently, as more and more people find purchasing out of reach.
She's as nervous as a very small nun at a penguin shoot.
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:25 pm

Quoting Banco (Reply 24):
Because if you rent you're essentially throwing the money away to someone else. And since houses prices are rising, there's a feeling that the more you delay, the more you're going to have to pay out when you DO buy. But the private rental market has grown dramatically recently, as more and more people find purchasing out of reach.

Yes, that's true; but I never saw the point of a single person in their 20s buying a house. It just doesn't make sense to me. Renting is just what a lot of young people do in the US, and it's usually cheaper than owning a house.
 
Banco
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:33 pm

Quoting Disruptivehair (Reply 25):
and it's usually cheaper than owning a house

Only if you share. Otherwise the rent is around the same as a mortgage, in which case why do so? At least, if you CAN get on the housing ladder. Still, lots of people do it, and long may they continue to, since I am a landlord as well!
She's as nervous as a very small nun at a penguin shoot.
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 10:48 pm

Quoting Banco (Reply 26):
Only if you share. Otherwise the rent is around the same as a mortgage, in which case why do so? At least, if you CAN get on the housing ladder. Still, lots of people do it, and long may they continue to, since I am a landlord as well!

My rent in Texas was $600 a month; that would have been cheaper than a mortgage, plus I didn't have to pay for any repairs to the plumbing, electricity, roofing, etc. and did not have to deal with a yard. For someone in their early 20s it's a big load off to not have to deal with all that a house can throw at you.
 
Go3Team
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RE: We Got An Offer, But....

Tue Apr 03, 2007 11:04 pm

Quoting Legoguy (Reply 18):
Sadily yes. I think my parents bought the house for £17000 and its now worth around £250000... not good for first time house buyers!

You're complaining? That's a hell of an investment. Unless, every buyer, is a first time buyer.


Things in California are about the same way. My grandfather paid $3000 for a 1/4 acre lot back in the 40's. He sold it in the early 90's for a nice cool million. My uncle used to be a real estate agent in San Jose. He made pretty good money off of commissions.

[Edited 2007-04-03 16:07:29]
Yay Pudding!
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 11:07 pm

Quoting Go3Team (Reply 28):
You're complaining? That's a hell of an investment. Unless, every buyer, is a first time buyer.

I think he's complaining about having to buy a house in a market like this; first-time buyers are priced out of many areas in the UK.
 
Go3Team
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RE: We Got An Offer, But....

Tue Apr 03, 2007 11:10 pm

Quoting Disruptivehair (Reply 29):
I think he's complaining about having to buy a house in a market like this; first-time buyers are priced out of many areas in the UK.

Ahhh, ok. Things can't stay that way for long. If no one has the money to buy it, then one has to adjust the price to sell it.
Yay Pudding!
 
luv2fly
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RE: We Got An Offer, But....

Tue Apr 03, 2007 11:12 pm

One word, counter offer and see what the people come back with.
You can cut the irony with a knife
 
disruptivehair
Posts: 565
Joined: Fri Mar 09, 2007 9:28 pm

RE: We Got An Offer, But....

Tue Apr 03, 2007 11:14 pm

Quoting Luv2fly (Reply 31):
One word, counter offer and see what the people come back with.

We did; we want to get them between 175k and 180k. I'd be happy with 175k and the estate agent seems optimistic that she can get them to increase the offer.
 
skidmarks
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RE: We Got An Offer, But....

Tue Apr 03, 2007 11:16 pm

DH, we also had an offer on our place yesterday. It's on for £214,500 and a developer offered £205,000. We said no for several reasons. One, it's too little - we need all we can get for another property. Two, it's a developer who is going to buy-to-rent - they'll make a mint so they can pay more and Three, we have until next June to sell, plenty of time to take the best offer, not the first that comes along.

However, having said all that, we may not have to sell as I've just had WestAir telling me they are buying the hangar on the IOM and I might not have to move anyway!! More bloody confusion!

Just hold out for the highest bidder DH, unless you are desparate!

Andy  old 
Growing old is compulsory, growing up is optional
 
disruptivehair
Posts: 565
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RE: We Got An Offer, But....

Tue Apr 03, 2007 11:17 pm

Quoting Go3Team (Reply 30):
Ahhh, ok. Things can't stay that way for long. If no one has the money to buy it, then one has to adjust the price to sell it.

I think that house price inflation will probably taper off but I don't see a plunge in prices because the market conditions just aren't right for it (IMHO). I think house price inflation has to slow down because it will get to a point where nobody can afford to buy the houses; the market will sort itself out. The level of increases we've seen over the last several years are not sustainable because salaries aren't keeping up with house price inflation.
 
disruptivehair
Posts: 565
Joined: Fri Mar 09, 2007 9:28 pm

RE: We Got An Offer, But....

Tue Apr 03, 2007 11:19 pm

Quoting Skidmarks (Reply 33):
DH, we also had an offer on our place yesterday. It's on for £214,500 and a developer offered £205,000. We said no for several reasons. One, it's too little - we need all we can get for another property. Two, it's a developer who is going to buy-to-rent - they'll make a mint so they can pay more and Three, we have until next June to sell, plenty of time to take the best offer, not the first that comes along.

However, having said all that, we may not have to sell as I've just had WestAir telling me they are buying the hangar on the IOM and I might not have to move anyway!! More bloody confusion!

Just hold out for the highest bidder DH, unless you are desparate!

Andy

We used to have a time constraint, but my husband went to NYC last week and had his temporary IR1 visa endorsed, so it now serves as his green card for one year. We had wanted to leave before that temporary visa expired (would have done yesterday) but we couldn't.

The thing is, we're both ready to go; we're ready to get on with the rest of our lives. We've put so much on hold for this move and we're coming up to the 2-year mark since we sent off his original I-130 application (early August 2005), and we're well past the 3-year anniversary of making the decision to return to the USA. I'm emotionally exhausted from this; I just want to get on with it. We've also put off having kids until the move is completed, and I turn 32 this year. Not getting any younger!
 
747438
Posts: 658
Joined: Thu Jan 25, 2007 5:45 am

RE: We Got An Offer, But....

Tue Apr 03, 2007 11:26 pm

Quoting Disruptivehair (Thread starter):
We Got An Offer, But....

Does this mean you are leaving?
I do hope so
 
civjetfan
Posts: 19
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RE: We Got An Offer, But....

Tue Apr 03, 2007 11:42 pm

go with a different agency one that is experienced
 
Banco
Posts: 14343
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RE: We Got An Offer, But....

Tue Apr 03, 2007 11:51 pm

Quoting Disruptivehair (Reply 34):
The level of increases we've seen over the last several years are not sustainable because salaries aren't keeping up with house price inflation.

Only in the very long term. House inflation doesn't affect those already in the property market to anything like the same level, as their existing properties also rise in value. Same with falls - as the BBC's economics editor put it recently, I don't mind if the value of my house falls to 50p if I can move into Buckingham Palace for a tenner.

So it is only the first-time buyers who get really badly hit, and a lot of the slack from them is taken up with older people purchasing property as part of a buy-to-let scheme. Thus, overall demand remains high, and it's also why you see that increase in private rental. Equally, the banks and building societies have come out with ever more creative methods of enabling the first time buyer to make that step, with longer term mortgages, high-mutliples of salary and so on.

So salaries are only ever one part of the equation. The housing market is extremely complex, and the ever increasing liquidity of the economy enables much larger sums to be borrowed than would have been thought the case not so many years ago. That's the reason why few forecasters see a crash in the offing, because at the present time it is sustainable.
She's as nervous as a very small nun at a penguin shoot.
 
legoguy
Posts: 2970
Joined: Tue Jun 13, 2006 8:59 pm

RE: We Got An Offer, But....

Wed Apr 04, 2007 12:15 am

Quoting Go3Team (Reply 28):
You're complaining? That's a hell of an investment. Unless, every buyer, is a first time buyer.



Quoting Disruptivehair (Reply 29):
I think he's complaining about having to buy a house in a market like this; first-time buyers are priced out of many areas in the UK.

No, I'm happy my parents have made alot out of it, but for us people trying to land on our own two feet, it's quite an up hill battle. However I don't mind living with my parents for another good while yet.  Smile
Can you say 'Beer Can' without sounding like a Jamaican saying 'Bacon'?
 
disruptivehair
Posts: 565
Joined: Fri Mar 09, 2007 9:28 pm

RE: We Got An Offer, But....

Wed Apr 04, 2007 12:21 am

Quoting Banco (Reply 38):
Only in the very long term. House inflation doesn't affect those already in the property market to anything like the same level, as their existing properties also rise in value. Same with falls - as the BBC's economics editor put it recently, I don't mind if the value of my house falls to 50p if I can move into Buckingham Palace for a tenner.

So it is only the first-time buyers who get really badly hit, and a lot of the slack from them is taken up with older people purchasing property as part of a buy-to-let scheme. Thus, overall demand remains high, and it's also why you see that increase in private rental. Equally, the banks and building societies have come out with ever more creative methods of enabling the first time buyer to make that step, with longer term mortgages, high-mutliples of salary and so on.

So salaries are only ever one part of the equation. The housing market is extremely complex, and the ever increasing liquidity of the economy enables much larger sums to be borrowed than would have been thought the case not so many years ago. That's the reason why few forecasters see a crash in the offing, because at the present time it is sustainable.

I can see the point you're making...that's one side of the story...but have you seen the housepricecrash.co.uk site?
 
Banco
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RE: We Got An Offer, But....

Wed Apr 04, 2007 12:25 am

Quoting Disruptivehair (Reply 40):
that's one side of the story

Of course. If these things were easily predictable everyone would make efforts to avoid it!
She's as nervous as a very small nun at a penguin shoot.
 
disruptivehair
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RE: We Got An Offer, But....

Wed Apr 04, 2007 12:30 am

Quoting Banco (Reply 41):
Of course. If these things were easily predictable everyone would make efforts to avoid it!

It's all just educated guesses; that's what makes it interesting.  bigthumbsup 

We have a second viewing tomorrow with a couple who saw the house on Saturday; maybe we'll have a bidding war!
 
disruptivehair
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RE: We Got An Offer, But....

Wed Apr 04, 2007 4:42 pm

We heard back from the people who made the offer; apparently they genuinely thought we would take £170k and are saying they might not be able to afford more, which really gives me the redass since our house is priced £15k above that. If £170k is your max, what are you doing looking at a £185k house? Or maybe they're just playing us. In any case, they say they 'need to think about it.'

 banghead   banghead   banghead 
 
andessmf
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RE: We Got An Offer, But....

Wed Apr 04, 2007 4:53 pm

Quoting LTBEWR (Reply 5):
I suspect that in the UK, much like some areas of the USA, there was a huge run up in the prices of houses due to pent up demand and reasonably low rates of interest, but it now ending.

It has ended, and the downhill period is only just beginning. I have seen houses that sold for $350K now sit on the market for $285 or less. So what you need to figure out is whether by not accepting the 170 offer now, you would be forced to accept a lower price later.

Quoting Disruptivehair (Reply 43):
If �170k is your max, what are you doing looking at a �185k house?

I am very, very down on housing. Essentially, the mortgages that were used to get people into houses, or allowed (in the US at least) for people to speculate on the housing market were very misleading. You would get a very low initial rate, but at one point of time your mortgage would reset to a higher rate, with a much higher payment required. These are starting to 'reset', and a lot of people will either have to make more money or lose their house.
 
disruptivehair
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RE: We Got An Offer, But....

Wed Apr 04, 2007 4:57 pm

Quoting AndesSMF (Reply 44):
It has ended, and the downhill period is only just beginning. I have seen houses that sold for $350K now sit on the market for $285 or less. So what you need to figure out is whether by not accepting the 170 offer now, you would be forced to accept a lower price later.

I am very, very down on housing. Essentially, the mortgages that were used to get people into houses, or allowed (in the US at least) for people to speculate on the housing market were very misleading. You would get a very low initial rate, but at one point of time your mortgage would reset to a higher rate, with a much higher payment required. These are starting to 'reset', and a lot of people will either have to make more money or lose their house.

You can't compare the US market to the UK market though; the culture, conditions, pressures, etc. are completely different. There's no comparison. Plus, the ARM has exploded in popularity only recently in the US whereas it is the standard mortgage here.
 
andessmf
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RE: We Got An Offer, But....

Wed Apr 04, 2007 5:10 pm

Quoting Disruptivehair (Reply 44):
You can't compare the US market to the UK market though; the culture, conditions, pressures, etc. are completely different.

I have read plenty of areas that discounted trouble on the statement that they were 'different'. In 2005, there were calls in the US that there would be no bursting of the bubble, and not long ago there were experts who would tell you that the sub-prime market was no problem.

There are simple facts to check. All commodities follow a logic of supply and demand. Therefore, for any area an increase in the population that is not matched to an increased supply in housing will trigger higher prices. When you have an area with a decreasing or stagnant population (not referring to the UK alone) that has housing prices shoot up, it raises red flags in my logic.
 
disruptivehair
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RE: We Got An Offer, But....

Wed Apr 04, 2007 5:17 pm

Quoting AndesSMF (Reply 45):
I have read plenty of areas that discounted trouble on the statement that they were 'different'. In 2005, there were calls in the US that there would be no bursting of the bubble, and not long ago there were experts who would tell you that the sub-prime market was no problem.

There are simple facts to check. All commodities follow a logic of supply and demand. Therefore, for any area an increase in the population that is not matched to an increased supply in housing will trigger higher prices. When you have an area with a decreasing or stagnant population (not referring to the UK alone) that has housing prices shoot up, it raises red flags in my logic.

Andes, I'm not going to argue about the state of the US housing market; we all know it's not good. However, you can't take all of those same assumptions and lay them on top of the UK market; it just doesn't work that way. The laws of supply and demand certainly apply here, but the demand for housing in the UK is still very strong. Don't assume that just because the US housing market sucks that £170k is the best or only offer we will get.

You also can't make assumptions about the UK market based on the US sub-prime market. Sub-prime lending here works in a completely different way and is nowhere near as popular as it is in the US; sub-prime mortgages comprise a smaller portion of the market here and the ARM readjustment issue is not applicable here since almost ALL mortgages are ARMs. You can't apply the US experience here. It just doesn't work.
 
Banco
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RE: We Got An Offer, But....

Wed Apr 04, 2007 5:36 pm

Quoting AndesSMF (Reply 45):
When you have an area with a decreasing or stagnant population (not referring to the UK alone)

The UK does not have a stagnant or decreasing population. It has an increasing one, as the recent passing of 60 million population rather graphically demonstrated. Even then, it is merely one element of many.
She's as nervous as a very small nun at a penguin shoot.
 
andessmf
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RE: We Got An Offer, But....

Wed Apr 04, 2007 5:40 pm

Quoting Disruptivehair (Reply 46):
I'm not going to argue about the state of the US housing market; we all know it's not good. However, you can't take all of those same assumptions and lay them on top of the UK market

But what I am telling you is that the assumptions that experts have made have been wrong, and that this is a global economy. In other words, who is buying the houses, why, and what happens when the first time buyer can no longer afford to buy?

Quoting Disruptivehair (Reply 46):
but the demand for housing in the UK is still very strong.

Means nothing till you find out who is buying again. Here in SMF the demand was also pretty strong, till they figure that fully 40% of the houses were being sold to speculators, not investors. The builders were rushing to build to fulfill this demand, which lead to rampant overbuilding.

Quoting Disruptivehair (Reply 46):
You can't apply the US experience here. It just doesn't work.

All markets work the same, regardless of what you and I and any other expert out there believes.
 
disruptivehair
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RE: We Got An Offer, But....

Wed Apr 04, 2007 5:45 pm

Quoting AndesSMF (Reply 48):
All markets work the same, regardless of what you and I and any other expert out there believes.

Like I said, the UK market is a completely different animal and I'm not going to have this argument.

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