... A Young Single Man!
(scroll down to just beneath the photo' of the chap doing what you're doing to see what he might or might not look like)
Er ... Mr & Mrs Cooper ... you bought your house in 1970 for how much ... £5,000, maybe? And you're happy to sell for £415,000 (a compound annual tax-free return of 12.33%, after inflation), but not for £365,000 (a compound annual tax-free return of 12%, after inflation)?
... to "A Young Single Man" who is paying that colossal mortgage out of post-tax income, a large part of whose tax bill is going towards your old-age pension while you swan about Down Under?
Here's a shortcut to the Gazundering Is Good website mentioned in the Daily Hatemail article, all good stuff.
Saturday, 13 September 2008
Unlikely heroes (4)
Subscribe to:
Post Comments (Atom)
6 comments:
Good for him. We need to get to the bottom of thos market as quickly as possible and emotional wibble like this isn't helping.
I'll bet they would all have gazzumped given the chance.
I am laughing my chubby balding head off at the tone of the Daily Mail article.
All those poor estate agents, I'm so sad for them. These are the greedy people who kept their fees at 2% or 3% when prices were going through the roof, getting massive annual increases of income despite their job being easier and easier the more the market rose.
With any luck the crash will be severe enough that the smarmy little tykes in designer Minis and Smartcars will get a taste of real life. And where do they get those shiny suits? Yucko!
The issue for the seller is not the overall increase in the value of their property, but the difference between what they sell for and what they buy for - including removal costs, legal fees etc. A situation currently being faced by my mother in law. if she drops any more she will not be able to buy in the location where she want to move.
Also, bear in mind that you are not comparing figures accurately. £5,000 in the 1970s was worth rather more than a year's average wage - it's like people complaining that in the 1960s you could buy a gallon of petrol for 1s 6d - yes, but what was the weekly wage and what proportion of that wage was the 1s 6d?
Longrider Towers cost £36,000 twenty years ago. I was earning about £8,000 per annum and Mrs L was earning about £5,000. Today according to the surveyor it is worth £140,000 and the average wage is in the mid twenty k mark. In real terms is is worth about the same. I refused to sell for that as I cannot afford to do so. Consequently, I've taken it off the market and am renting it.
Gazundering is an appalling practice. Once you have agreed a price, you should stick to it. All negotiation should take place following a favourable viewing before a final price is fixed - then it should stay fixed short of something exceptional coming to light in searches or surveys. Then, and only then, should the buyer consider a renegotiation. I would never, under any circumstances tolerate a gazunderer. I would withdraw from the sale and put it back on the market - even if they did it on the day of exchange. I do not enable unethical behaviour, bullying or blackmail; all of which gazundering is. If the gazunderer still wanted to buy, having had their bluff called, they would find that the price had gone up.
I equally detest gazumping. Both practices are inherently unethical and the overheated market is not an excuse for such behaviour.
It was good to see this couple telling the single young man to fuck off. I would have done exactly the same. He had plenty of time to negotiate that extra £50k - like when he was initially making his offer.
All that said, I do tend to agree with fatbigot on the matter of estate agents - does anyone like them?
LR, the indexation calculator says that £36k in 1988 adjusted for earnings would be £85k by 2006 (and probably about £92k by now). That's way short of £140k.
The Coopers' £5k in 1970 is equivalent £95k in 2006 (say £100k by now). So their windfall gain would have been £265k, even if they had given in to The Young Single Man.
They will be kicking themselves in a year or two when the best they can sell it for is £250k.
I was using the amount that one can borrow against income. In 1988 we could borrow 45k against the average wage. Today that would be 175k. Then, the selling price was 36k today the perceived value is 140k. if there is a "profit" then bear in mind that we have spent several thousand pounds in the interim in maintenance and renovation. We most certainly are not making a profit here. At our end of the market in real terms it is slightly more affordable than it was then. The problem for buyers (from our experience) is that lenders now want a hefty deposit before they will lend. But, then, so they did back then and that's no bad thing.
The big problems occur as you go up the property ladder and the gap increases.
All that aside - gazundering is not an ethical practice and should not be enabled. There is plenty of time to negotiate a price that is agreeable to both parties. Personally, I believe that we should adopt the French system whereby the buyer places a non-refundable deposit on agreeing the purchase.
The Coopers were absolutely right not to give in - no matter what happens to values in the future. His behaviour was despicable as he had planned to do this regardless of the impact that it might have had on them and their plans. Trade of any type relies on trust to work. The single young man has demonstrated that he is untrustworthy and unethical.
Mind you, the English house-buying system is a bloody disgrace - slow and uncertain.
Post a Comment