How to sell your home in a slow market
Sarah Carrington, a 28-year-old writer from High Wycombe, knows how to sell a house. When she first decided to put her flat on the market in February last year, she spoke to estate agents and then spent five months putting things right. She says: “It was all painted white; there were nice laminate floors throughout. I did all the odd jobs that needed doing and scrubbed and de-cluttered it to within an inch of its life.” She put the house on the market back in July 2007, and then nothing happened… for months.
In the interim, the housing market took a turn for the worse. The credit crunch of the summer in 2007 turned into the house price falls of the winter. As a whole Halifax says prices fell 0.8% in the last three months of 2007 – although some regions were much worse. London, for example, saw falls of 6.3% in this time. House-hunters evaporated, and website Rightmove.co.uk claimed that the average home was on the market for a record three months.
Not much has improved thus far in 2008 - in fact, you could argue the situation is getting worse. So getting your home sold quickly has become something of an art.
It’ll come as no comfort to Sarah, but she got the first step right - ensuring there’s nothing about her property that could put buyers off.
Take the time to finish off niggling DIY jobs and consider a fresh coat of paint. Tina Jesson, managing director of home dressing company homestagers.co.uk says: “If the property hasn’t been redecorated in five years, the dated décor may be a block to buyers.”
Kitchens and bathrooms sell homes. If your bathroom suite is coloured, why not replace it with a cheap white one, which will feel more modern. Otherwise freshen up an old white suite with new taps and shower screen. In the kitchen, if the units are out of date, replace the fronts with something more fashionable. Peter Bolton-King, chief executive of the National Association of Estate Agents, suggests: “Take advice from your estate agent, but don’t spend a fortune.”
Next think about first impressions. Bolton-King says: “If a viewer doesn’t like the look of the outside they may not even come in.” Keep your garden tidy, the lawn mowed, polish the door furniture, and if it’s looking shabby, consider a lick of paint on doors and window frames.
Once all the DIY is done, it’s time to de-clutter. Most people could do with putting away about a third of their belongings in storage while people are looking round the house.
Jesson suggests you use every room to its maximum value. “A double bedroom has more value than a single, so it should be shown with a double bed; a single has more value than a study, so should be shown as a bedroom.” Finally, you’ll need to give it a thorough clean.
Don’t forget to make an effort for viewings. Jesson provides a checklist that her clients go through before any viewing, emptying bins, tidying up, and making sure laundry isn’t hanging out. Also think about smells - avoid cooking food like curry or fish before a viewing, or the smell will hang around. If you have pets, invest in a spray that neutralises smells.
Think about the atmosphere you’re creating during viewings. Jesson says: “If you’re showing a house make sure you are the only one in, and don’t make them feel they are intruding.” Again if you have pets, it’s worth someone taking them out during viewings. As Jesson says: “The worst thing is to have three kids and a dog trailing after you, because it’s awkward and it immediately makes the rooms feel small.”
If you’re doing viewings yourself, decide which order to show the rooms in, and guide them round the property once – showing the best room either first or last. Then let them have a look around on their own. If you’re nervous about viewings have your estate agent do them all, just make sure you’re out when they come.
However, as Sarah found, there’s no point doing all this preparation if you aren’t getting any viewings. She is working with her estate agent, re-writing the details to emphasise the property’s strong points. Miles Shipside, commercial director for Rightmove.co.uk says: “Make sure the the photographs are good. Also think about the description. It has to be correct, but it doesn’t have to be boring.” He suggests appealing to the lifestyle of buyers, is it in the catchment area of a good school for example?
If this doesn’t work consider switching agents. Do they have a local presence, with plenty of sold boards in the area? Do they have a good reputation among your neighbours? And are they advertising widely enough? Ask about their internet presence. Check their site is user-friendly, and that they appear on at least one of the big national sites such as Findaproperty.com and Rightmove.co.uk. For broader coverage, you can go to multiple agents, just make sure you check your contracts carefully, so you only ever have to pay the agent who actually sells your home.
If your home still doesn’t sell it’s worth re-thinking your position. Buyers like homes that aren’t in a chain, so consider renting for a while. That’s something Toby Moore, a 48-year-old business owner from London ended up doing when he sold his two-bedroom flat in Elephant and Castle in the property crash of 1989. During the two years it took to shift the property, his agent persuaded him that a move into rented accommodation would help his home shift faster.
You also need your paperwork in place, and your home information pack ready. This includes an energy performance certificate, sale statement, standard searches, evidence of title, and additional information for leasehold sales. It also pays to gather together anything that might be asked for during the process, such as any guarantees for damp-proofing or other work.
Once you get an offer, stay on top of your paperwork and maintain a good relationship with your solicitor. According to the NAEA, the fall-though rate is at a recent high of 10.7%. Don’t let a sale fall through because of delays at your end.
If you’re buying something else, make sure you have your paperwork in place, with a mortgage agreed and a surveyor’s report ready. You don’t want your seller to get impatient.
Once you have everything prepared, and you’re ready to move, you can look at getting more creative. There are marketing gimmicks, or there are more direct solutions.
Mike Ottewell, a 62-year-old consultant from Staffordshire has employed a few clever tactics in his time. In the mid-1990s, he wanted to sell his family home, and move to a smaller property with Wimpy Homes. At the time, they offered a part-exchange deal, but his current home was more valuable than the new house, so on the face of it, he couldn’t take advantage of the deal. He says: “I went round the village and found six houses for sale that were smaller than my property, where the owners looked liked they’d be after something bigger. I wrote to them and offered a part exchange on our home.”
From six letters, Mike had one reply, and he set up a three-way deal. The owner of the smaller property swapped with him, and paid the difference, and he swapped the smaller home with Wimpy.
When he moved again a few years ago, he was equally imaginative. “We had agreed a sale, but then the people buying from us lost their seller and the chain broke.” Instead of starting again, he set up a deal with his buyers. “I lowered the price of our house to enable them to buy it without having to sell their own home first. Then a year later, when they sold their home, they paid us the difference. It was a risk, but we trusted the buyer and it was worth it because it enabled us to proceed with our move.”
Bolton-King says there are a couple of options if you’re stuck in a chain. “I have seen people at the top of the chain buy the property at the bottom. A first-time buyer property might be more saleable, or could work as an investment. And if they buy it, they can get the chain moving.” Beyond this, unfortunately, you may have to consider the least palatable option of all – dropping the price. Bolton-King says: “It’s difficult for vendors to accept they might not get as much as they hoped, but they have to listen to their agent.”
Shipside says this can be effective, if done properly. He says: ”If you’re going to reduce the price, make it meaningful. You need the change to open you up to a raft of new buyers, which you may not get with 5%.”
If you’re really keen to sell, Shipside says you can take a fairly drastic approach: “The basic solution is to be the cheapest in the target area. People can hunt around online, and if you’re the cheapest you’ll come out on top.” Toby took this approach. “I just kept dropping the price, until I eventually looked at all the similar properties in the area and then undercut them all by about £5,000, just to make sure I got the sale.”
He eventually sold for £40,000 – a loss of £30,000 in three years. This was an alarming drop, but as Shipside points out, if you’re buying again in the same market, the chances are your target property will have fallen too.
However, before you get drastic, it’s worth thinking seriously whether you need to sell at all. In a stagnant market you could think about improvements or extensions, which may make your home more suitable. Alternatively, you can always rent it out for a while and sell when the market is a little more stable. Toby points out: “If I had hung on for a few years I wouldn’t have lost any money, so unless you have to sell in a falling market, I’d suggest you bide your time.”
Marketing gimmicks that help sell a home:
- Offer to pay the stamp duty. Rob Winfield, managing director of Chartwell Funding, says: “It’s almost assumed for new builds, but it can be used by any seller.”
- Offer your home fully furnished. Winfield says: “It’s a great wheeze. You can spend £2,000 furnishing your home, but it adds much more to the perceived value.”
- There are other relatively inexpensive offers you can make that may catch the eye of a buyer, such as gym membership, a Sky package, or even a holiday.
- Shipside mentions one seller in Maidstone who offered to buy a year’s season ticket to London for any buyer, to encourage commuters.
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.
The right to hold or use assets (generally property, but also vehicles) for a fixed period of time at a given price, without transfer of ownership, on the basis of a lease contract. Leasehold ownership of a residential property is simply a long tenancy, the right to occupation and use of the flat for a specified period – the ‘term’ of the lease, which is fixed at the beginning and so decreases in length year by year and the property can be bought and sold during that term. When new, leases are for 99 or 125 years until its eventual expiry, whereupon ownership of the property reverts to the landlord.
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.
A property chain is a line of buyers and sellers (the “links”) who are all simultaneously involved in linked property transactions. When one transaction falls through – for instance, someone can’t get a mortgage or simply withdraws their property from sale, the entire chain breaks and all the transactions are held up or even fail entirely.