It’s Easter and traditionally, a lot of homes go on the market over the bank holiday weekend. It may sound harsh but if you want to sell your home now you really have got to appreciate the reality of the current market and that a lot of things have changed in the last 12 months. If you aren’t then you may be better off waiting for the market to find it’s bottom and join in again when stability returns.
Firstly, your home is probably already worth 10-15% less than it was last August – just before the Northern Rock imploded. You are going to have to ask less than you would have last year and you almost certainly will have to accept less. Take advice from agents who deal with your kind of property and listen to what they are saying. Their business depends on turnover and they only get paid if property sells so they are fixated about making your property saleable.
(Remember, if you are buying and selling in the same market, if you take a hit on the value of your home, you are more than likely to be able to buy for less too. It’s all about the difference between what you sell for and what you pay.)
The time it takes to sell is going to be longer in 2008. It will be on the market for about 93 days according to Rightmove and nearly six months in total from start to completion.
It will cost money just to market your home thanks to the Governments introduction of Home Information Packs. Typically, HiPs cost about £425 to get one produced and you must have one if you market your home either privately or through an agent.
You can expect fewer buyers through the door as the number of viewers per property has fallen by 33% according to Hampton’s earlier this year. Those that do turn up will have found it much harder to get a mortgage offer and some suggest that you shouldn’t really invite anyone to look who hasn’t got a mortgage offer in principle first. No more 125% loans, bigger deposits required, 40% fewer mortgage products and interest rates now totally detached from the Bank of England base rate. Believe me, getting a mortgage offer aint as easy as it was and quite a few people can’t get one at all.
Once you have agreed a sale, be ready for the valuer who will come round to sign off the value for the buyers mortgage company. He is liable if it turns out that the property isn’t worth what your buyer has offered. As a result, in a hard or falling market, many will err on the side of caution and down-value just to be safe. The problem is that the lender will only lend on this lower value and your buyer may not be able or willing to raise the difference in cash. If they can’t or if they are scared by the figure that the valuer has put on it they will try and renegotiate. Will you want to take a lower offer? Can you afford not to?
Finally, the cost of moving home will be more than you will have expected as the bills and taxes roll in. Agent fees, solicitors costs, the HiP, the stamp duty on your new home, the higher arrangement fee that you will face for your new mortgage. The list goes on. The bottom line is that if you want to sell, there is still a market but take advice, listen to what those who are in the market are saying not the lenders and others who still insist that the market is “rubbing along”. Be ready to do everything possible to attract a buyer and if you find one, grab them and hold onto them. There aren’t as many genuine buyers around as there were a year ago and as this year goes by, I suspect there may be even fewer.
Happy Easter and good luck.