bought new house dont know what to do now

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Treehouse, your obvious frustration with the 'Irish attitude of entitlement' seems to be clouding the issue here. The OP bought his house for €196k and would like to sell for €230k and nothing has happened on it for 7 months. The general advice he has been given here has been 'cop on to yourself, slash that price, take the hit and put it down to experience'. Do you not think that there are other avennues to look into before taking on the worse case scenario. Why jump from to high a price to absolute cut price in one go. If you had a property or investment would you not look at how to limit the hit that you take if indeed you have to take one at all. All of this 'entitlement' ranting is again to broad an argument to make it fit every case.

Jethro says it his bed let him lie in it, I mean you sound offended because the OP isn't taking your advice to take a loss on this investment. You don't even know where the house is, what condition its in and what the local market looks like. I think the OP should engage in discussions with one or two experienced EA's in his locality and listen to what they have to say, and ask for no sugar coating.
 
I think I know the town you're talking about but won't mention as you haven't done. Had a look at the website of a well known EA and saw a house a few doors up from the one I decided must be yours for €200k. Suggest you have a seious chat with your agent about your offer price and ask what price you need to offer at to sell in the next few months. If the agent isn't suggesting a serious reduction you are with the wrong one. (Are there new houses still for sale in the estate.) Realistically as many of the comments above have indicated there is no upside for you if you are selling in the next few years.
 
Do you not think that there are other avennues to look into before taking on the worse case scenario. Why jump from to high a price to absolute cut price in one go.

Because time is of the essence in the current market. Every month, this guy has to pay another 900 euro while his property is decreasing in value. He's already paid out 6300 in the seven months it's been up for sale.
 
Jethro says it his bed let him lie in it, I mean you sound offended because the OP isn't taking your advice to take a loss on this investment.

the OP wants to sell, his price isn't attracting interest => either do work on the property to add value or drop the price, pretty simple.

The 'its his bed' comment refers to the fact that the OP sounds like one of the many who believed the FF/VI hype of you can't lose on property and bought with absolutely no research and just thought he'd get off the gravy train at any time by puliing the emergency chord. I have no sympathy for people who dive head first into investments without doing their homework (not categorically saying the OP is like that as I don't know him, just the impression i got).

His 'investment' is dropping in value, i'm advising him if he wants to sell he has to drop his price (or loose more money through paying 'dead' money on an interest only mortgage and further price drops).
 
The OP bought his house for €196k and would like to sell for €230k and nothing has happened on it for 7 months.

This is correct. Perhaps in a parallel universe somewhere people are able to draw a reasonable conclusion as to why this might be the case. But sadly, apparantly not in this universe.

The general advice he has been given here has been 'cop on to yourself, slash that price, take the hit and put it down to experience'. Do you not think that there are other avennues to look into before taking on the worse case scenario.

Like what? I'm all ears. Really, let us hear what "other avenues" there are out there that have not been tried over the last 7 months. Serious request, because I'm open to being wrong.

Why jump from to high a price to absolute cut price in one go.

Because when a house is for sale for 7 months and has had no offers, what do you think the problem is? A bad photo on Daft? A lazy EA? Bad luck? Just haven't had the right person to view it yet?

Occam's Razor MrMan...the house is overpriced. No mystery at all.

You don't even know where the house is, what condition its in and what the local market looks like.

MrMan, none of this stuff matters. WHEREVER it is and WHATEVER state it's in, it has dropped in value since OP bought it. There is practically no chance that OP's property is so unique and alluring that it has risen in price. I mean, for crying out loud, are you people totally blind to what's going on? There is a property slide (crash, cooling whatever) going on and prices are about 20% down on '06 when OP bought, and yet he is trying to sell for 15% MORE than when he bought! For the love of God if he was trying to break even that would be one thing, but he wants to realise a profit?? This is almost too ludicrous for words. Please tell me you can see these simple truths?

..........

One other thing. OP accused me of jealousy. You have said "your obvious frustration...seems to be clouding the issue here" and "you sound offended".

That's 3 gratuitous insults, but whatever, I don't mind. But can you see what's happening here? This is a petty personalisation of the issue, and not a debate about the facts. This is very telling. Whether I am jealous or offended or frustrated do not matter a jot. Let's say I'm all thse things....fine, but OP is the one with a house on the market for 7 months with no offers and facing negative equity, not me, so all this wholly talk of emotions and states-of-mind is pointless.


Anyway I'll leave it now on OP's own immortal words:

"Everyone is entitled to make a profit".

A fitting epitaph to the Irish housing bubble if ever there was one.
 
thanks guys especially to mr man and mr dt at least u guys understood the question. as for treehouse and jethro tull whats biting you guys i only asked a question no need to be so offensive. in my last post i explained that i did not buy to make a quick profit did u guys not understand that. i bought the house to live in it but as i said my circumstamces changed and thats why im selling surely u dont need too many brain cells to understand that. iwill drop the price if needed im not a greedy person like tree and jetro might think. i just posted a question asking for advice and i must say as always i got some great advice but could have done without the smart remarks
so guys thanks again keep smiling and i will sell the house and make a profit i know that and i will take jetro and tree house for a drink it might brighten them up
 

Actually, I don't think they did understand your question. If I read you correctly, you wished to know what options were available to you for perhaps selling the property to the council. Their responses seemed to amount to implying to you that you could get out of this ownership without taking a loss.

The world is not, however, that simple.

I'm not entirely sure what north Cork town you're talking about, or what kind of property but coincidentally I know a bit about some of them. Interestingly enough, in a few north Cork towns there is affordable housing available for less than you want. It's not shifting because in said towns, there are unencumbered properties available for the same or less. I'm not entirely sure what kind of a property you are selling but since I was looking at three bedroomed terraced houses in Cork city today for under 250K today I am inclined to suggest that you may have an uphill struggle.

From this post and your original post, the overwhelming impression I get is that you want to divest yourself of this property. It's costing you 900E a month and by the sounds of things it's unoccupied. I doubt very much if you will get 900E a month in rent so if you want it to stop costing you cashflow, selling it is about your main option. After that it's a question of whether you can clear the outstanding debt on the property. You haven't given enough information for that, but assuming some of the calculations here are correct, you're interest only on a purchase price of 196K so the outstanding balance is 196K. Your current ask, you say is 230K, so you're angling for a 36KE gross profit, not accounting for interest paid in the last two years which according to me is in the region of 21600. You may also have been liable for stamp duty if the property was not owneroccupied and I suppose you spent some money fitting out the property. I cannot remember if investors are liable for stamp duty on new properties under 125sqm - someone will have to remind me - but as far as I know, yes they are. Even at 230K your chances of break even are limited.

If you want to sell the property, you need to look at the following:

1) what similar properties are on sale in the area, and what asking prices do they have
2) what properties in the area have similar asking prices to yours? Are they similar properties, bigger properties, smaller, closer to the town/facilities etc. Does yours have an unattractive encumbrance such as a management company, for example? It's a buyers market right now and they can - and are - making calls on those factors.
3) How much of a financial hit can you take? How long can you afford to have it on the market not selling? For every month you have it on sale, you have to pay 900E. Your property has had no interest for seven months. That's a lot of money. Can you afford to have it on sale for another seven months with no interest?

What is the rental market like in the town? "You can just rent it out" is a facile piece of advice. Just being able to rent something out for 300E a month less than it's costing you is also not necessarily wise.

With respect to farming it out to the council I have this to say: I'm not currently resident in Cork but you can be sure that if I was, i would have a lot to say about the local authority paying above market rates for property that will not sell on the open market. In other words, you have no business assuming that the County Council should pay a premium for your property when the open market thinks it's over priced.

Your key option here is price. Anyone who is advising you to do it up is probably misguided - evidence from elsewhere suggests that this just delays the inevitable. I am not sure what the going rate for your property is going to be. There is some argument for bringing down the price incrementally over a few months but again, that's going to cost you 900E a month. If you want to shift the property quickly, your options are a bit limited.

I have one other comment to make - and this is a general comment. You stated further up that everyone is entitled to make a profit. This is not true. Everyone is entitled to try to make a profit. That doesn't mean they will succeed.
 
Hi Ocean - you said in an earlier post that "everyone is entitled to make a profit". But I think it would be fairer to say that everybody is entitled to attempt to make a profit. Its like the point made in the movie "Pursuit of Happiness". Pursuing happiness/profit isn't necessarily the same as achieving it. No investment is a one-way bet - it is always possible to lose out on the investment.

Now on the one side you've got Treehouse and Jethro Tull and I think that their comments should have been couched more diplomatically. And on the other MrMan is telling you to hang in there and it could all be golden yet. But I think you're experiencing cognitive dissonance (http://en.wikipedia.org/wiki/Cognitive_dissonance). There is no shame in it - we all experience cognitive dissonance at times. And when money is involved there is no surprise in it at all.

For me the most compelling point of the bullish argument is that you bought at the very top of the bubble. As such you're pretty much the poster-boy for negative equity. Now that isn't a pleasant idea at all for anybody to consider. But there it is. Now it is possible that you could come out of this golden yet. But on the face of it - it just doesn't seem that likely. I'm not certain if MrMan is saying that you should hold out for the full €230 that you want to get or is he only saying that you should go down in smaller increments than has been suggested by the bears but I don't think he has sufficiently addressed the fact that house-prices are widely perceived to be falling. A recent report from Davy stockbrokers warns that house prices "have much further to fall": http://www.rte.ie/news/2008/0528/economy.html

For your house to retain its value there would need to be some exceptional quality about it. Now I'm not taking some kind of swing at your house but the fact that it has been on the market for seven months says to me that there is nothing sufficiently different about it to make it stand out from the other houses in the area.

I think the question you should be asking yourself why does MrMan's argument seem so much more compelling to you than the argument of the bears (Treehouse and Jethro Tull). Is it because he has answered their arguments or is it because his version of events is easier to take. Do you think that MrMan is right and that Davy stockbrokers are wrong?

Please believe me when I tell you I have no dog in this fight. But I see you being advised by MrMan I think he is suffering from cognitive dissonance also and I can't stand idly by.

You might be thinking that house prices have to come back eventually. And eventually they will. But eventually could be a very long time indeed. Japan took 19 years to recover from their property-bubble. Now you say that your personal circumstances have changed and that is why you wish to sell the house. So it sounds like it isn't going to suit you to hang onto this house long-term - you're a motivated seller. I think if you need to sell that house you should strongly consider dropping the price by a fairly goodly chunk and you should do it soon. It's a hard thing to do to admit that you're probably going to lose money on this deal but I really do think its a choice of losing some money now or losing more money later.
 
thanks calina for your great advice.i can rent the property for 800 per month and at the moment there is people looking to rent in this town, the house is as it was when finished i have not furnished it. i know im paying dead money every month and i know i might make no money but i can afford the mortgage and even if i dont make money so what as i said before i am not greedy and i did not buy it to make money, so im gonna ride it out for a few months see what happens and not worry about it, theres more to life than money. will keep you guys posted
take care
BIGBY thanks for the advice some great points. just need to point out one thing the estate agent put the 230k figure on it i went along with that after all he is the EA. i will ring him and drop the price and we will see what happens but as i said i wont give it away for nothing
thanks
 
Bigby/Calina, if I had better manners I would have posted what you posted. Nice posts.

Ocean - by all means ignore me (I am usually too rude on internet forums), but you really should listen to Calina and Bigby both of whom have given you outstanding advice and I'd think you'd agree have done so in a level-headed and fair way.
 

IF you do decide to rent it, please get professional taxation advice.
 
.i can rent the property for 800 per month
I don't understand the logic here. The mortgage interest is €900/month, so you're still losing €100/month + depreciation. (Disregarding hassle of renting and taxation issues)
 
Jethro: we are going around in circles but we don't need to, we agree on your last point, he needs to drop his price, we only disagree as far as I see it as to how he goes about doing it.

TreeHouse: The other avenues I suggested are based on the premise that the only 'facts' we all know on this case is the asking price, the house type, and the general location. Some EA's are better than others, small changes to how his interior is presented can make a difference. I don't know if he has been getting any viewings, but if he has the house should look good inside and out it does make a difference. Just because he has been sitting there 7 months doesn't mean that the best service has been given to him or the best advice taken so that is why I think simply slashing the price is knee jerk, he can always slash it in a months time if nothing changes.
Regarding to 'can you understand these simple truths' tirade, the simple truth is that I advised knocking the price already and see how it makes a change. Do you think that all houses across the country drop by the same percentage when it is announced on the radio. 'Prices down by 15% oops I better lower immediately'. Different local markets are experiencing different declines in price and some not at all I have even dealt with those that have risen since 2005, you can't be so general. If we knew exactly where the OP's house was then you could draw a more accurate conclusion as to the saleability of the house and the liklihood that he will have to drop his price further or not.
If you were offended by being described as maybe frustrated or offended, then I'm glad your not on the receiving end of your own posts.

Bigby: I didn't say hang in there and all will be golden, I said drop to say €210,000, look at how the sales process has been handled and assess is there areas that he feels it could be better dealt with. The drop of only €20,000 was based on the OP's reluctance to take a hit on the property and it would have at least provided an insight as to whether that was closer to the sales price. A 10% drop is not to be sniffed at, considering an EA set the original price.

Regarding pitting my wits against Davys Stockbrokers, I think I have sufficiently addressed the fact that house prices are perceived to be dropping, I work in the property business every day, I keep my eyes and ears open and form my own opinions based on what I actually see.
Oh and thank for saving the OP from my advice.
 


Yes, that's what I think happens. They announce the amount of price drops on the radio, and then everyone trying to sell drops their price by that amount. Or am I wrong? Is that not how it works? Sheesh. I may need to review my entire opinion on this. I honestly thought that once it was announced on the radio that everyone just did it. Man, I hate having my assumptions blown out of the water like this.

I will gracefully withdraw all my previous posts after this shocking revelation. I had based my arguments on assumptions about this radio announcement business, but now my eyes have been opened. Thanks MrMan. Your rhetorical jousting has trumped me.
 
the house is as it was when finished i have not furnished it
am i reading that correctly, that you've never actually lived in the house? then spending 900e a month or even continuing to take a loss by starting to rent it out (and incurring the expense of having to furnish it before renting it out) make no sense at all. drop the price to 200k and see if anyone bites, you may get some interest and if you're very lucky and get a couple of bidders you may get back up to 210/215 and you should then bite their hand off with gratitude. really there's no other sensible solution.
 
Treehouse, I made the presumtion that an individual with your wealth of knowledge could see the point that I was making and not dwell on one line and use it as a way to further try and cause offence rather than sticking to the points at hand. You asked what other avenues could he consider, I answered albeit in a straight forward manner, maybe you would prefer it if I replied using sarcasm so we can communicate on the same level.
 
I am in a similar position to the OP.
I have some banking shares I bought in April 2007 for €20. I would like to sell them for €24, but I've had no offers for several months.

Without being harsh OP, the financial asset you're holding is just that - a financial asset. Investment is a game that you sometimes win and sometimes lose.

2006 prices are gone. What you paid for that place is gone. Forget about it.
You need to find out what the going rate is TODAY for similar properties in your area, and pitch yourself at or slightly below that rate.

Bear in mind that an interest rate rise is expected next month, and even before rates rise, banks are raising their own mortgage rates because of the high costs in money markets.
An increase in interest rates reduces affordability for buyers, and is not good news in general for people trying to sell.

If you hold out for another few months, instead of cutting your losses now, and decide to carry the interest costs in the meantime, there's a probability that you'll get a better price.
There's also a probability that you'll end up having to cut the price even more than if you'd flogged the place sooner.

It's against the rules of this forum to discuss which we believe is the more likely outcome. Now you need to make up your own mind.
 
I just wanted to post from a buyers point of view. I am currently looking for a house (not in my beloved Mayo) but else where and there was a house on the market for around 220k. I offer 175k, they said no way. I will wait and see, if 175k will be good enough. I see Aib are increasing their rates and with a suppose ECB rate increase, will put increased pressure on some house owners.

I feel its a preditor/prey world in the housing market at the moment and I'm hungry!!!
 
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