Moving house in a market downturn
In periods of very strong demand, houses virtually ‘sell themselves’. But in a market downturn when the going gets tough you need to focus on the most important factors when selling a house:
First impressions are vital because most buyers respond emotionally to a house within the first thirty seconds of arriving. It costs nothing to tidy up and get cleaning and polishing to make rooms look lighter and brighter.
Decoration is the next most cost-effective thing to do.
Price it keenly
A high price is not going to get potential buyers through the door, so don’t be too ambitious with your asking price. If it still doesn’t sell, it’s probably too expensive.
The key thing to remember is that what you lose on your sale you should gain on your purchase.
If it’s sticking, take the house off the market for a couple of weeks before launching it with a new agent at a price at least five per cent lower.
By dropping the price substantially you can suddenly appeal to a whole new level of buyers. Or instead of setting a conventional ‘asking price’, try putting it on at a lower ‘guide price’ to solicit ‘offers above’.
Focus only on your sale
Going into rented accommodation for a few months between selling and buying will boost the chances of a successful sale, because you can fit in with your buyer’s agenda.
It also means that if your buyers muck you about, you won’t be stressed-out about losing the new place you want to move to. Also, having sold already, and with no chain, you should be able to negotiate an excellent deal on your purchase.
In a quiet market there are fewer buyers out there, so you need to try harder to reach them. By all means appoint an estate agent, or more than one. But be wise to private selling opportunities also listing your home on the best private sellers’ websites.
Pick the best
Make sure you select the best estate agent for your type of property. A lot of the ‘easy money’ brigade who set up in the boom years don’t know how to work a tough market to secure a sale.
Deciding what’s included
Before putting your property on the market, it’s worth considering what ‘fixtures and fittings’ you are prepared to leave behind. These can later be a useful bargaining chip, enhancing your negotiating position. So if you’re sick of the sight of your carpets and curtains, they may be worth throwing in as a sweetener, saving the buyer a lot of hassle and money.
Normally one of the first documents your solicitor sends you as a seller is the ‘fixtures, fittings and contents form’.
However, at this stage it is not always advisable to mention this in the sales particulars because it’s rarely an issue until later on, when you come to negotiate the sale. If you do make a big thing about including them, some clever Dick buyer could later demand a discount for not wanting them, on the grounds of ‘saving you the trouble of having to remove them’.
This subject becomes more contentious when you realise that no one actually seems to be 100 per cent certain precisely what constitutes a ‘fixture’ or a ‘fitting’.
Of course, there are rules of thumb. A fixture is something that’s permanently fixed in place, and being attached to the building can’t be picked up and walked away with. Fittings, on the other hand, can be easily removed and are normally packed up and taken away. The test is whether removing the thing would damage the property.
So things like light pendants and laminate flooring are considered to be fixed, and are left in place, as are TV aerials, fitted hobs and ovens, and anything that is obviously part of the house, such as the doors! But it’s the grey areas that can be a fruitful source of argument.
Plant pots can be moved, unless of course they’re incredibly heavy, and what about shelves and curtain rails?
Appointing an estate agent
The time-honoured way of selling residential property is to put it in the hands of a local estate agent. Although it’s true that agents have enjoyed years of easy pickings, their job is rarely as simple as we sometimes like to imagine.
Much of the hard graft, such as accompanying endless viewings and patiently holding chains together, gets carried out below the public’s radar. Although it’s now easier than ever to sell privately, the vast majority of properties are still bought through estate agents, who are by far the biggest source of homes for sale.
The law says…
Under the Consumers, Estate Agents and Redress Act (2007), all estate agents are required to join a Redress Scheme approved by the Office of Fair Trading (OFT) that can investigate complaints, resolve disputes and offer compensation (the best known scheme is run by The Property Ombudsman/TPO).
The industry is additionally regulated by a hotchpotch of legislation; from the Estate Agents Act dating from 1979, right up to recent Consumer Protection Regulations and Business Protection Regulations, described in Chapter 16. This makes it an offence to give false or misleading descriptions, although many breaches go unchallenged or cannot be proved.
The law says that:
- Agents must pass on all offers promptly and in writing to their client – the seller. This includes those made long after a property goes ‘under offer’. The only exception is where the seller has told the estate agent not to pass on certain offers – for example, all those below a certain price.
- Agents are legally obliged not to deliberately mislead or misdescribe something.
- Agents must state in their sales particulars if anyone working there is a ‘related person’ to the seller. This is to avoid potential conflicts of interest arising. So if you want to buy or sell a property that your estate agent (or one of their associates) happens to own or have an interest in, they must declare their involvement.
- Recent legislation places a duty to provide the ‘material information’ that the average consumer needs to make informed decisions. So before signing a contract to appoint an agent they must inform you of such things as what services they provide, all fees and charges, terms of business and any tie-in period.
In the first instance a written complaint should be sent to the firm’s head office. If this doesn’t resolve the problem, write to local trading standards. Write to NAEA if the firm is a member, or ask the Property Ombudsman to review your case.
If they support your complaint, they may award compensation. Estate agents ‘regulated by RICS’ have stricter complaints procedures.