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Sat 13 February 2010
We are constantly advising our clients that buyers are cautious in the current market. Normally this is referring to what a buyer wants to spend and how it is essential at present for asking prices to be realistic so as not to frighten off any potential purchasers; “the difference between a few thousand pounds on an asking price can be the difference between receiving viewers or not!”
It is however becoming evident that buyers are very cautious in more ways than one. The influx in viewers and offers coming out of the woodwork over the last couple of weeks has begged the question of where these potential buyers have been hiding?
It would appear that buyers are becoming reluctant to commit to a purchase until they have some more security in their ability to proceed. Those who do not have an associated sale are being extremely prudent and ensuring that their funds are in place before viewing and making offers. Those who have associated sales appear to be waiting until surveys have been carried out or even exchange of contracts has taken place on their sale prior to them searching for their new property.
We are undoubtedly in a buyer’s market having seen a correction in property prices over the past few years. These cautious buyers will not pay over the odds for property, they will only pay what they feel it is worth to them. One result of this prudence for those relying on a mortgage at least, is that they are less frequently faced with a reduction in their mortgage valuation because more realistic figures are being agreed in the first instance, in turn resulting in fewer aborted sales.
The old adage “once bitten twice shy” is also playing a part. Many people have seen sales fall through in the last few years and having been through this costly experience are keen to avoid a repeat performance and are therefore waiting for some certainty in their sale before pursuing a purchase.
In summary, perhaps the prudent approach of cautious buyers is resulting in a greater time lag before they look to purchase but this is potentially making for a more efficient property market with a continued correction in property prices and a reduction in aborted sales.