The valuation of older “new homes”.
Estate agents – they only act in their own best interests
Estate agents proudly state that a home was sold in 12 days, with the implication that the agent is good – more likely he was just plain lucky. It is even more likely, in fact a virtual certainty, that the home was severely undervalued by the agent in the first place. Sold too cheaply. You don’t need an estate agent to sell your home at a bargain price and paying upwards of £7,000 commission to the agent is adding insult to financial injury.
Whilst it is well known that most buyers take what they are told by estate agents with a pinch of salt, the same cannot be said of those selling their homes. All too often they are far too trusting, believing that as they are paying an agent for a service, acting on their behalf, in their best interests. However the industry is like the proverbial giant squid, is always “sticking its tentacles into everything property that smells like money.” Take the Energy Performance Certificates (EPC), arranged by agents for £105 yet available online for under £40. The managers running offices in high street estate agents have monthly sales targets to meet. They need properties on their books that they can sell. Homes they can sell quickly, with a minimum of time and effort or they will lose both bonuses and commission. It matters little to an agent when an offer of £20,000 less than the “asking price” is made. He loses around £300 (at 1.5%) but the vendor loses £20,000!
The great sellers’ rip-off begins with the valuation visit. They invite the agent into their home for a valuation, trusting that the agent is the professional and will advertise their home for the maximum achievable in the market. The agent will already know what “price” he will tell you to market your home for before he even gets in his car! This will be based on the most recent sales and homes currently on the market in the area. It will have little to do with the location, condition and features of your particular property. If a four-bedroom home on an estate was priced at £335,000 and sold for £320,000, then this is what he will suggest you market your four-bedroom home for and the price you can expect to get. This irrespective of the desirability of your home and whether it is double fronted and has additional rooms.
At last people are starting to ask why do estate agents still exist. As I have said before, in a previous blog there is now no longer any need to use a high street estate agent to sell your house. Everything they used to do can be done using an online agent for less than £1,000, irrespective of the selling price in most cases. The only thing left for sellers to do is show potential buyers around their home. After all the owner will know more about the property than the estate agent, however good they say they are, ever will. If necessary, even viewings can be sub contracted out for minimal extra cost.
So why do estate agents still exist? Why exactly! It could be that older sellers are reluctant to trust the new technology or do not have confidence online. It could be vendors choose to take the easy, traditional option despite the thousands of pounds they are wasting unnecessarily. More likely it is the fact that estate agents are “like the proverbial giant squid “sticking its tentacles into everything property that smells like money.”
The Stamp Duty reform announcement in George Osborne’s Autumn Statement is yet another example of UK Government’s generosity towards the house building industry. It could be argued that anyone buying a home, old or new-build will benefit, with reportedly 98% of homebuyers paying less from today. However the reform, whilst long overdue, will mean more people paying higher stamp duty in the long run with the housing market no longer constrained at the old price threshold levels and sellers free to tick up asking prices above the £125,000 zero threshold.
Many experts say the surprise change to the stamp duty system is likely to provide a fresh boost to the housing market and lead to higher prices for homes where the tax will be cut, property experts have warned. Mortgage lenders and estate agents have argued for a long time that this distorts the market, with house prices bunched just below thresholds.
More and more people are deciding to save themselves several thousands of pounds by not going down the traditional local estate agent route by choosing to sell for as little as £500 using an online agency. How to do this and why you don’t need an estate agent. As a result most people will need to be aware of the “psychology of selling” when showing potential buyers around their home and follow a few easy tips to help sell their home.
High street estate agencies rely on the fact that most people do not conduct viewings very well and do not know the tell-tale signs that buyers can give out. Even worse, some owners do not even prepare their property to show it at its best and maximise the chances of an early sale at the best possible price. Phil Spencer’s TV programme Secret Agent is based on this.
But by using simple psychology there are many things that sellers can do to virtually double the chance of a successful sale. Even though most are common sense and somewhat obvious, hardly anyone does them, so you can use this to your advantage to give you the edge over similar properties on the market in your area.
This will be the first contact you will have with your potential buyer. It is important to be bright and cheerful and try to get into a conversation. If the caller asks specific questions about the home be honest and truthful, but be concise and never give anything extra as this may bias their opinion of your home before they have even set eyes on it.
Try to arrange the viewing some time during the day, at a time perhaps when there will be fewer people at home. Try to find out how many will be viewing and make a definite appointment. Make a note of their name and the time and date of the viewing and be accommodating. Make sure you give the buyer clear directions on how to get to your home, where to park and perhaps landmarks to watch out for on the way. Include your postcode for use with a SatNav.
First impressions count – kerb appeal
If the buyer is not impressed with your home in the first few seconds of walking up to your front door, there will be nothing you can do to convince them to make an offer, no matter how fantastic the inside of your house is, their minds will already be negatively focused. Conversely, if they like what they see you are well on the way to selling your home!
Make sure your front garden is a tidy as possible.
Prune any trees, cut any hedges and make sure the path clean and free of all weeds and mildew.
If possible, plant some bedding plants to provide a bit of colour.
Sprinkle some Sulphate of Ammonia on your lawns. In just a day (after watering in) it will turn your patchy grass into a perfect green lawn. Be sure to cut it regularly to maintain the attractive stripe effect.
Pay particular attention to your front door. Clean it and re paint it if necessary. Polish any brass or chrome to make it look brand new, because buyers can and do judge the house on their initial impression of the front door.
Clean all the windows and wash down external paintwork.
If possible remove your car(s) from driveway.
To make your gardens look bigger, tie back shrubs and hedges, and put away any swings and slides.
Add compost to the flowerbeds. This will show your garden at its best and hide any persistent weeds.
Preparing the home for a viewing
New homes – all sugar and spice and all things nice? That’s what the house builders would have you believe. Slugs and snails and snagging list tales would be closer to the truth!
Included with last weekends Mail on Sunday was a property paper called ‘The Location’ described as – “44 pages of property inspiration.” Within it’s covers were some of the most outrageous superlatives I have ever seen used by house builders and their selling agents to describe not only the new homes being advertised, but also the location of the developments.
Not once were the adjectives used to describe the homes and developments backed up with any tangible statement of explanation. Here is another translation of what the builders say and what it really means.
Of the homes they were described as:
“Bespoke” Implying that they are being built to a buyer’s own specific requirements rather than in all probability, a one-off design forced by the planning process.
“Contemporary” This just means “of the same age; present-day” yet it is frequently used to imply state-of-the-art features, designs or specifications.
“Exclusive” This commonly used to imply the development or properties are one of kind – hardly the case with most new homes.
“Uncompromised quality” Really? How is this substantiated? So there we have it, this development does not “compromise” on quality, implying or more usefully, confirming that others do.
Buyers looking for a property in Edinburgh, Scotland’s famous capital city, are likely thinking of a flat or maybe two or three-bed home in which to raise a family. Most are certainly not looking to spend to buy a £50,000 lock-up garage.
Incredibly, that seems to be the going price for a mere lock-up these days, at least according to an article in the Edinburgh Evening News. The paper, first published in 1873 and should therefore know a thing or two about Edinburgh, reports no less than three garages with mind-boggling price tags have recently gone on sale.
The garages include a double-garage with an electric door in Inverleith Terrace Lane and another with electricity and running water in Portland Row, Leith, both priced at £50,000. The good news, however, is the third garage, a West End lock-up, is being offered at a much more reasonable and affordable price, a mere £40,000 – the same price as a two-bed house in Muirhouse, according to the Evening News article.
But readers will no doubt have been gladdened when the paper explained the rash of interest in the single garage on Palmerston Place is nothing more than a reflection of the current strength of the city’s property market. At least that’s the view of city property experts.
Meanwhile, back on earth, a record number of affordable homes are being built in Edinburgh with more quality housing than ever before available to rent or buy.
As a result of the government’s Help to Buy scheme together with a relaxation of lending criteria, Britain’s housing market is now booming. More sales will be recorded in 2013, than at any time since the 2007 boom. The increased demand for homes has, according to the Halifax, resulted in the ninth consecutive monthly rise in house prices, up 0.7% in October and up 6.9% over the last 12 months. The Halifax reports that the average UK home is now valued at £171,991. It has never been an easier to sell a home and estate agents are cashing in on the easy money, charging around 2% of the sale price. This can be a total of £6,000 (including vat) for a home that can sell for £250,000 in a matter of days, sometimes before they even put the property in their window!
However a growing number of sellers are choosing to avoid the traditional method and are marketing their homes online and saving several thousand pounds in the process. Most online services charge flat fees between £200 and £900 depending on the services offered and optional extras. With many homes selling in a matter of days, people thinking of selling their home are starting to ask themselves why they need an estate agent at all. The RICS say that around 5% of all completed property sales arise from low-cost online agents and private sale websites.