Over 95% of house sellers in the UK get an estate agent when they decide to sell their house. No great surprise you might think. We are certainly more cautious than our European colleagues who quite often use a solicitor (in France) or even have a go themselves (in Italy). There are some good reasons for getting professional help, not least for some objective guidance in holding a sale together once a deal has been agreed. Whether this help is worth twice what you used to pay for it ten years ago is hotly debated but more on that subject another time. What I do find staggering is that less than 2% of buyers ask for any help.
Buying a home is the biggest single purchase that most people will make in their lifetime and whilst most seem prepared to get help with the legal aspect of their purchase, the vast majority seem confident that they can negotiate the best deal, that they know the value of property and that they are going to get the better of the vendors’ agent!
The average buyer registers with at least three estate agent, spends nearly four weeks touring properties with them and as they ride around in the branded mini they explain how desperate they are, how the kids have to be settled by September for their new school, how your mother-in-law has offered to help out with another £10k if they absolutely need it. Then, when they do find something worthwhile they sit down with the nice man they have just shown their entire hand to and are surprised when he uses all this information against them. The agent represents the seller, unlike in the States where they have brokers, he spends all day, every day immersed in his local housing market. He knows what a property is worth and how desperate you are and how weak the other interest is. What you need is help and this help comes from a Buying Agent.
Like a divorce lawyer or even a dentist, a buying agent is there to do something that you can’t do too well yourself. He is objective, calm and above all, professional. Yes, you have to pay him but think about this;- if you find a home and make an offer of £1, the estate agent finds another offer of £2 and immediately you have to bid £3 to stand a chance to getting the house. At the very least, your buying agent will advise you to wait and make the second bid which may actually be enough to secure the deal. Because they don’t know what they’re doing, it’s reckoned that the average buyer spends £1600 more than he needs to. A staggering £2 billion a year when you add up all the amateurs over-paying for their next home.
Do yourself a favour and get some help from a buying agent before you pop down to your friendly estate agent and tell him how much you have got to spend and why he should take you seriously because you have sold your own house and have to be out in a month!
As you can see from the image above (I hope) the latest scores from HitWise show continued traffic growth to the biggest portals.
The award for “most improved” has to go to ThinkProperty who have shot up the rankings as a result of their recent stratergy and efforts to add more data to their fledgling site.
Their sister site Vebra still makes a confusing entry in second place. Does this mean that a site with no visable budget is doing so much better than DMGT’s Primelocation et al or is there more to the story than meets the eye.
More shortly. In the meantime, drinks on ThinkProperty!
This weeks flooding in Gloucestershire and Worcestershire comes hard on the heels of the devastation in Sheffield and the North East earlier in the month. Rainfall records are being broken across the country and ironically only flat, reclaimed East Anglia has escaped without serious flood damage. The impact of 2007 floods will be felt for a long time to come but there is one significant outcome to already dampen the spirits of effected homeowners.
Property website Primemove.com which closely monitors both the buying and selling trends is looking out for the results of the floods on the habits of the buying public.
Commenting on the possible impact, Henry Pryor, spokesman and commentator said “Graphic reports on television and in the newspapers have shown the appalling conditions that so many have had to endure recently, first in the north of the country and now in the West. Despite the Governments’ announcement today that we should continue to build on traditional flood plains where possible there is bound to be a knock on effect as house buyers shun these types of properties in prone areas. Information on areas at risk is now available to the buying public on-line via the Environment Agency and other similar sites and vendors and estate agents have a legal duty if asked to disclose any history of flooding.
“It will take some time for purchasers to forget the images they are seeing today of flooded out properties and displaced people and until they do, there be a reluctance to buy a new property in an area at risk of flooding. Four years ago, insurers threatened to withdraw cover from some Fenland properties which some feared would make them un-saleable. The cost of the 2007 floods could well cause insurance companies to look again at the risk they are writing and anyone left without cover could see a reduction in the value of their home of up to 25%.
“It’s too early to see any signs of this at present as the market traditionally pauses during the summer holidays” says Pryor “but when it returns in September and the clearing up has got underway we may start to see a change in buyer habits with a corresponding impact on prices.”
Just occasionally the City astounds me.
On the one hand it takes a very negative
view of Taylor Wimpey, while at the
same time it puts another property stock,
Rightmove, on an astronomical multiple
of over 12 times 2007 sales. The last
time I saw such a hi-octane rating was
during the dotcom boom. Rightmove is
the UK’s leading residential property
internet portal, originally founded by the
Halifax, Connells and Countrywide. The
website generates income from
advertising houses, new home
developments, lettings and overseas
properties. Advertisers can upload all of
a property’s details, from photographs to
maps and even virtual tours.
On 6 July, Rightmove released an upbeat
trading statement, underlining its
dominance in the online market. All 15 of
the largest estate agents and 19 of the top
20 developers now list on the website.
Traffic went up 58% in the first half with
24.3 million visits per month, while the
number of advertisers rose 26% to
18,515. The group also experienced
“continued growth in new members and
high retention rates… whilst its 67%
stake in a holiday lettings business was
also trading ahead of expectations”.
Fine so far, but with such a strong
position in the UK, where is the growth
going to come from to justify the sky-high
rating? More worryingly, cracks are
starting to appear. Tempted by the
lucrative operating profit margins of 50%
plus, competitors such as Tesco and Asda
are dipping their toes in the market. And
with the growing importance of social
networking sites, together with the threat
from classified listings on Google and
Craigslist, over time the environment will
become much more competitive. Just look
at the way Friends Reunited’s dominance
in connecting old school friends has
dwindled over the past three years, due to
the impact of Facebook and Myspace.
Finally, if the UK housing market does
soften in the coming years, then this will
surely hurt Rightmove’s future turnover
and earnings. The City expects 2007 sales
and earnings per share of £54.7m and
15.9p respectively, rising to £71.7m and
22.7p in 2008 – thus putting the shares
on a racy 2007 p/e of 35 times. With the
best of the UK property market behind
us, I would instead value the shares at
around 300p, or about half their present
level. The CEO and CFO together sold
around £5m worth of stock in March at
480p, while the company listed on the
LSE in March 2006 at 335p. My advice
would be to follow the directors’ lead and
Recommendation: SELL at 582p
After ten years of discussion and months of heated debate, after u-turns and talk even of rebellion, Home Information Packs are here!
The Government postponed the launch until 1st August saying that as soon as there were 2000 accredited Domestic Energy Assessors and Home Inspectors that they would include smaller houses but that to start with, only the more expensive and larger homes with four or more bedrooms would require a Pack.
Having made the Home Condition Report optional last year, the Pack is widely regarded as being impotent but the Energy Performance Certificate or EPC forms part of our commitment to Kyoto and the EU requirement for all properties to have an energy rating by 2009.
The HIP Exchange which matches homes that are to be sold with HIP providers and Energy Assessors was only launched in July but has quickly built a panel of Home Inspectors and Energy Assessors to cover the country. A deal with NRG Experts, based in Buckinghamshire and who represent the best Home Inspectors and DEA’s now takes the total number to over 1000 making The HiP Exchange the largest pool of EPC providers in the Uk.
Henry Pryor, founder of The Exchange explained “ The HiP Exchange exists to provide professional, qualified DEA’s and Home Inspectors primarily for larger individual properties. We understand that this new and somewhat controversial requirement for an energy inspection needs to be handled with care and sensitivity and that most people will want to be confident that the person in their home undertaking this work is suitably qualified.
“Our deal with NRG Experts ensures that we have total coverage nationwide and that we can provide a high quality service from the best in the profession and the Governments plan to start with larger homes means that in fact we are starting with our core market.”
Asked to comment on what the likely cost of an EPC might be Pryor said “The Government has stated that it expected a full Home Information Pack to cost in excess of £300 but that that was an average of properties both big and small. Larger properties such as those we are starting with in August will be more expensive and the EPC itself will cost around £130.
“Users of The HiP Exchange are sophisticated and are unlikely to be fixated on price alone” he continued. “Our business is based on value-for-money – a Waitrose type offering rather than a discount warehouse. After all, it is expected that the EPC should form part of the marketing of a property and it is important to make the most of something that may influence the final value of the home”.