First Time Buyers

[Slim]

But if the buyer cannot afford to pay the seller what he wants, the seller will not sell. For example, if a house is for sale for £200K (estate agent guideline) and I offer £100K it is likely to get refused. If I offer £190K the buyer may accept it if he wants a quick sale. On the other hand he may reject it if he thinks he can get more. If there is a lot of interest the buyer may refuse £200K and go for more. The price is not set in stone until the buyer accepts it, and even then he may get a higher offer and gazzump!

 

Exactly, the seller will not sell if it's over priced. It's the sale price that matters, not the asking price.

[BigDave]

The true price of something is only what it is purchased at, not what it is offered for sale for. Therefore a vendor cannot set the price. The buyer always sets the price by agreeing to buy - this may actually be what the vendor wants or it may be less, but the price is not set unless both the buyer and vendor agree.

 

In the same way, in about 10 minutes I will go and buy myself a bap. I know this will be offered for sale to me for £2.20. If I decide I don't want to pay £2.20, the nice lady in the bap shop will most likely refuse to sell it to me, as she knows that it is likely there will be another customer who is prepared to pay the £2.20. Now if there is no-one else willing to pay £2.20 she will have to lower the price of the baps to suit the customers - hence the process of the buyers in the market setting the price.

 

Edit: Slim beat me to it!

[Cambon]

In the same way, in about 10 minutes I will go and buy myself a bap. I know this will be offered for sale to me for £2.20. If I decide I don't want to pay £2.20, the nice lady in the bap shop will most likely refuse to sell it to me, as she knows that it is likely there will be another customer who is prepared to pay the £2.20. Now if there is no-one else willing to pay £2.20 she will have to lower the price of the baps to suit the customers - hence the process of the buyers in the market setting the price.

 

Edit: Slim beat me to it!

 

But it is the bap lady's decision therefore she dictates the price. It is same in the housing market. If you could control that as a "buyer's market" there would not be a problem. However, housing is a "sellers market". We know this because it is possible to price a house to sell immediately, as happened in Port Erin recently. A one bedroom bungalow sold in one day for the asking price of £102K, about £30K less that it was worth.

[Slim]

But it is the bap lady's decision therefore she dictates the price. It is same in the housing market. If you could control that as a "buyer's market" there would not be a problem. However, housing is a "sellers market". We know this because it is possible to price a house to sell immediately, as happened in Port Erin recently. A one bedroom bungalow sold in one day for the asking price of £102K, about £30K less that it was worth.

 

No, it's not the bap ladies decision. It's the market that sets the price the bap is sold for. Sure you can underprice and it'll sell, how does that support your argument in any way? You said yourself it sold for 30k less than what its worth, so you're admitting that theres a market price, not what the property was offered for sale at.

[BigDave]

But the descision that a vendor takes to set an asking price for any item is entirely dependent on the behaviour of the buyers in that market.

 

Back to the bap lady, the decision for her to lower her prices would be a direct result of the descision of her customers not to buy from her. I do not need to buy her baps, but she needs to sell them. If she does not lower her prices she will not make a sale and go out of business. Her hand is forced by the buyers and there is no other desision she can make.

 

The same is true for houses. If I decide not to buy your house and there are no other buyers prepared to pay what you want, you will be forced to lower your price. It is your descision to ask less, but this is a direct result of potential buyers refusing to pay your original price. The reason for any pricing descision in any market is purely down to the acceptability of that price to the buyers.

 

Edit. Again!

[Cambon]

But the descision that a vendor takes to set an asking price for any item is entirely dependent on the behaviour of the buyers in that market.

 

Back to the bap lady, the decision for her to lower her prices would be a direct result of the descision of her customers not to buy from her. I do not need to buy her baps, but she needs to sell them. If she does not lower her prices she will not make a sale and go out of business. Her hand is forced by the buyers and there is no other desision she can make.

 

The same is true for houses. If I decide not to buy your house and there are no other buyers prepared to pay what you want, you will be forced to lower your price. It is your descision to ask less, but this is a direct result of potential buyers refusing to pay your original price. The reason for any pricing descision in any market is purely down to the acceptability of that price to the buyers.

 

Edit. Again!

 

I understand what you are saying but this is not the case of the current housing market.

 

Back to bap lady - If she made too many baps and only sold half at the full asking price, she would probably lower the asking price in order to sell the rest. She may even take lower offers. That is because excess supply has dictated a buyers market. The buyer is in the drivers seat.

 

However, with the current housing market that is not the case. There is limited supply and sellers pretty much asking what they want and only accepting high offers. The sellers are in the driving seat and if someone wants to buy they have to stump up the readies!

[Slim]

Even in a restricted supply, you can't sell for more than the buyers can afford. It's still the buyer in the driving seat.

 

All the big influencers on the housing market are on the buyers side: unemployment, average salaries, interest rates, lending criteria, they're all in the buyers hands not the seller. It's the buyers who set the market price, and once the buyers can't afford to buy the houses, that's when the prices drop, nowt to do with the seller, who's just naturally out for the most he can get.

[BigDave]

If she made too many baps and only sold half at the full asking price, she would probably lower the asking price in order to sell the rest

But she will have made sales. She would be selling things cheap becuase the market is saturated - again no buyers want them at this price because all those who can afford to buy them have them already. This is going off on a tangent now.

 

if someone wants to buy they have to stump up the readies!

And there is the crucial point. If someone wants to buy. They don't have to!

[BigDave]

Is the bap lady sexy?

Not really. She's more the mumsy type, but hey, you might not be as choosy.

[Cambon]

Even in a restricted supply, you can't sell for more than the buyers can afford. It's still the buyer in the driving seat.

 

All the big influencers on the housing market are on the buyers side: unemployment, average salaries, interest rates, lending criteria, they're all in the buyers hands not the seller. It's the buyers who set the market price, and once the buyers can't afford to buy the houses, that's when the prices drop, nowt to do with the seller, who's just naturally out for the most he can get.

 

You can, and they are selling. If buyers cannot afford the 4 bedroom dream home they have to lower their sights. If they cannot get on the housing ladder they are in trouble because there are enough people who can to keep the market buoyant. Unemployment, interest rates and lending cirteria are certainly not in the buyers control and therefore not on their side.

 

Until somone comes along and floods the market with cheap properties as the Carvill group did in the early 90s demand will outstrip supply and sellers will keep the prices high.

[Tugger]

Is the bap lady sexy?

Not really. She's more the mumsy type, but hey, you might not be as choosy.

 

The tall Eastern European girl in Appetite is OK

[BigDave]

If they cannot get on the housing ladder they are in trouble because there are enough people who can to keep the market buoyant.

I feel this arguement is in the context of a select group of people who cannot afford to buy. You are saying there are buyers who can afford to buy, therefore the price is set at what the wealthier buyers are willing to pay. So the buyers are still setting the price, just some buyers cannot join in at the same level. If those top end buyers were not there, or not willing to pay would the vendors still demand the same price? Some might be stubborn and might be able to afford to sit on it, but 99% of people selling a house need to sell for one reason or another and will have to drop their price to achieve a sale.

 

If buyers cannot afford the 4 bedroom dream home they have to lower their sights.

Such is life. It is certainly not the case that everyone has an automatic right to have what they want, when they want it. Whatever society and the government tell them. Tough shit.

[Slim]

You can, and they are selling. If buyers cannot afford the 4 bedroom dream home they have to lower their sights. If they cannot get on the housing ladder they are in trouble because there are enough people who can to keep the market buoyant. Unemployment, interest rates and lending cirteria are certainly not in the buyers control and therefore not on their side.

 

They're criteria that affect what the buyer can afford to pay, which is realistically what the property value is, not what the seller decides he wants for it.

[Cambon]

If they cannot get on the housing ladder they are in trouble because there are enough people who can to keep the market buoyant.

I feel this arguement is in the context of a select group of people who cannot afford to buy. You are saying there are buyers who can afford to buy, therefore the price is set at what the wealthier buyers are willing to pay. So the buyers are still setting the price, just some buyers cannot join in at the same level. If those top end buyers were not there, or not willing to pay would the vendors still demand the same price? Some might be stubborn and might be able to afford to sit on it, but 99% of people selling a house need to sell for one reason or another and will have to drop their price to achieve a sale.

 

If buyers cannot afford the 4 bedroom dream home they have to lower their sights.

Such is life. It is certainly not the case that everyone has an automatic right to have what they want, when they want it. Whatever society and the government tell them. Tough shit.

 

And Slim.

 

You are talking about supply and demand in a broader context, I am talking of supply and demand as it is in the current housing market. Yes it could change but it is unlikely to. That is because the same factors that force the vendor to lower his price are the same factors that lower the buyers ability to afford houses.

 

It affects both sides equally.

[lfc84]

As for claiming this is a local problem, it isn't. A 3 bed semi in liverpool will cost close to 200k also.

In some areas a 3 bed terraced is £200k....

 

In other areas you can buy the street of tem 3 bed terraced for £200k....

 

In the Isle of Man every street is priced like the former example....not enough low value housing stock.