Selling your property can be a complex and daunting business, which has spawned new methods in recent years. But they are not for everyone.
Will Stisted, Managing Partner and Senior Property Lawyer explains how timing, the property and your own circumstances are the biggest factors to consider.
There are times when you cannot control or expect to know when the house needs to be sold – it may be an enforced move, whether as a result of separation or divorce, a relocation due to change in work situation or it is an inherited property which requires a sale to free up funds or pay inheritance tax, for example.
In these situations, it is about getting a realistic assessment and buyer for the property as quickly as practicable, while trying to meet your financial objectives.
Reading the Market
For those not in these situations then knowing when to move is a game that needs to be played carefully. There are a whole host of external economic factors that drive the housing market – like all economic cycles they have their peaks and their troughs and this coincides with what you will hear termed as a “buyer’s market” or a “seller’s market”.
When the economy is under strain or there is uncertainty about future prospects, then the market can stall. Demand falls and with it, on a highly variable regional level, house prices too. In this situation, it could be termed a “buyer’s market” as buyers can perhaps negotiate with more confidence for a lower price knowing the seller may be receptive if they want to move to secure their next house.
Equally, a “seller’s market” will be in play where there is a locally very short supply for that type of house, or it is in an attractive school catchment – these may be immune to external economic factors, but these are really very local influences and not always typical.
So, timing can be important. Right now, Brexit and its potential impact on house prices if a no deal scenario happens, has created some uncertainty.
But this masks a complex picture. There are plenty of transactions going on, according to the Land Registry’s latest figures. With low interest rates being maintained, lenders continue to offer historically attractive mortgage rates. There are many successful chains being completed and many first time buyers joining the market or selling to the next stage too.
So, knowing when to make a move can be a very personal decision, but it can also be weighed against understanding how the market is moving in your area.
But, in a changing world, the options for selling are now equally more complex and need to be understood – to avoid making costly mistakes or to ensure that your unique property and circumstances are taken care of.
Using a local estate agent
Most of us still look to our high street estate agent to negotiate a successful sale. This is not surprising as they are typically within and from our communities, understand the very local nature of the market and will have good relationships with high quality property lawyers (conveyancers), such as ourselves.
Agents tend not to charge a fee upfront, taking a percentage of the sale price on completion.
Choosing the right estate agent is important. The one who gives you the highest valuation may not be right for you. Their valuation might be over-optimistic or they might just be trying to win your business by inflating the price. Instead, consider the skills and reputation of the agent and assess how well they know the local market. Some agents specialise in certain types of property, so ask them how many properties similar to yours they have sold recently.
You need to be careful that the agent doesn’t automatically refer you to a conveyancer without your inspection. Referral fees exist in the market between volume conveyancers and agents – these are built into the price or taken from the conveyancer, so you may only deal with the legal issues remotely via a call centre or online and with someone who is less qualified – this could be a problem should more technical issues arise – and needs to be given serious thought.
Look for personal recommendations – whether from your friends and family or ask a firm of solicitors in your area, such as us. We work with a range of different agents and can give a good guide as to who is the most efficient and proactive.
Selling it yourself
Selling your home yourself can save you money. However, do you have the time and experience to do all the things an estate agent would do? Consider also how you will describe your home. Under the Misrepresentation Act 1967, you could be liable for any untrue or misleading descriptions.
While 95 per cent of people now start their property search online, the main property websites do not take private advertisements, so you may find reaching out to potential buyers harder than expected if you decide to do it yourself.
Equally, buyers may not feel as secure dealing direct with someone without the backup of formal business structure and process.
Online and hybrid estate agents
There has been a dramatic increase in the number of online estate agents who have heavily advertised on TV and social media in the last couple of years.
Most online estate agents charge a fixed fee, whether or not they sell your property. However, the cost is usually a lot less than the commission a conventional agent would charge. This can be highly attractive superficially, but some may do no more than promote your sales ad to one of the larger property portals. Others offer a more comprehensive service.
Always check what is included and then ask yourself how you would cover any gaps. For example, would you be comfortable conducting the viewings?
This type of arrangement can suit a straightforward property that is in high demand. However, if your property is unusual, or you run into problems, you may need more tailored assistance. High value or heritage properties, in particular, can benefit from the skills of a specialist agent whose marketing effectively reaches the audience that you want to attract.
Sale by public auction
If you are thinking of putting your home under the hammer, you will need to take legal advice from the outset. Any prospective buyer must check your title to the property before the auction through a specially prepared legal pack. Your conveyancer can boost your chances of getting the best price possible by identifying and resolving any title issues early on.
You can sell any type of property at auction. Most auctions attract a higher proportion of investors, developers and cash buyers, so it is a good way of selling properties with structural or legal problems, inherited properties, tenanted properties and development plots. Auctions often attract a lot of attention, so they can also work well for properties in high demand. TV programmes like “Homes under the Hammer” have also raised the profile of this as a mechanism.
The auctioneer should set a guide price that attracts competitive bidding from the outset, and judge the pace and activity of bids in the room to achieve the highest price.
Selling by auction is also quick and provides certainty. A binding contract is formed once the auctioneer accepts the highest bid. You can then look forward to receiving the sale proceeds, usually within four weeks. Setting a reserve will avoid having to accept a price you think is too low. The auctioneer will withdraw your property if the bidding does not reach that level.
Sealed bids are similar in some ways to an auction sale. Prospective buyers submit their best offer by a certain date. However, the seller does not have to accept the highest bid, or any offer. This means you can choose to sell to the buyer you think is most likely to proceed quickly or you can choose not to sell at all. Sealed bids can be a good way of generating interest in a buoyant market but unlike an auction, there is no guarantee the sale will proceed.
Get the Best Advice
Property lawyers like me are here to ensure that you make the right decisions about the sale of your property. As independent professionals, we are here to ensure you choose the right course of action that will suit your circumstances and your property – as each sale comes with its own unique story.
Anderson Rowntree has helped generations of families and individuals move successfully. We check all the details so you have absolute clarity and can make an informed decision.
Talk to our expert property lawyers across any of our three West Sussex offices: