How to sell your home in a falling market
It appears that house prices really are showing a sustained stutter, even a fall in some parts of the country, notably in London in the above-£1 million.
The most recent figures, from the RICS, report that during the three months to July, show that the same number of agents reported house-price falls as those who reported rises.
All this is hardly surprising as house prices have risen at a rate that cannot in general be met by the multiples people can borrow, especially first-time buyers, who ultimately prop up the entire market.
Until earnings and the availability of mortgage money to match prices becomes available to meet prices, or prices fall back somewhat to balance with the credit available, prices are certain to stall and even fall back. It’s like an elastic band, after a while it can only stretch so far and then the tension needs to be released.
Add in the political and economic uncertainties currently and there is even greater pressure pushing prices downwards.
But this is not what a crash is caused by. A crash happens when an ever-increasing number of people are forced to sell in a downward-moving market, usually because they can no longer afford to pay their mortgages, and that’s usually because either interest rates shoot up, or they lose their job.
The key feature about the current slowdown is the shortfall in homes on the market.
People are choosing not to sell because they feel it’s not the time when they'll get the best price and because the costs involved, such as stamp duty, especially at the higher end of the market, are too great to make it appealling.
It’s a period of adjustment.
But what if you really do need to sell in a lacklustre market like this?
How do you do it?
Here are a few pointers to maximizing your price.
Sell at the right time of year is always important
There’s an old saying in property that bargain hunters come out in October.
This is because Christmas is coming and this is traditionally a slow time on the property market. So why look for bargains?
Because people who sell in slow markets NEED to sell.
The big three reasons are: death, divorce and debt.
It's never good, then, to be in a position where you have to sell, and that goes for anytime of year; but if you face this prospect, it’s best to be realistic and price your property according to the market and attempt to take advantage yourself by buying again as quickly as possible.
Price realistically if you have to sell
This doesn’t mean basing a price on what you paid for a property ten years ago, it means looking at what similar properties on the market are actually selling for.
Again, ‘selling for’ doesn’t mean what price they have in the agent’s window; it means what they actually sell for. This is, ultimately, the only valid valuation.
You can find out on Zoopla, or by speaking to agents for more up-to-date info.
Watch out for stamp duty boundaries
Stamp duty puts off a lot of buys and new boundaries, especially for more expensive properties add considerably to the bill.
If you price your property just above a boundary, you are in effect saying you’ll take an offer because no one would expect to pay a price just over a stamp duty boundary.
Here are the levels:
Up to £125,000
The next £125,000 (the portion from £125,001 to £250,000)
The next £675,000 (the portion from £250,001 to £925,000)
The next £575,000 (the portion from £925,001 to £1.5 million)
The remaining amount (the portion above £1.5 million)
There’s a useful stamp duty calculator here.
Be ready, if at all possible, to walk away from a buyer
Buyers in flat markets expect to call the shots, especially those who have their finance all in place.
They’ll often play hard ball when the results of a survey come in. Take a dispassionate view of any findings of fault. How much would they realistically cost to fix? If you think the buyer is trying it on, if you possibly can, tell them ‘no thanks’ and wish them well in their hunt.
In other words, call their bluff.
It’s usually a fact that by the time buyer commissions the expense of a survey, they have, in their own mind, already bought your property and thought about themselves living there. Plus they’ve paid for a survey so they will be reluctant to walk away.
On top of this, there are some easy practical steps that are proven to help sell your house, at any time.
Just get rid of as much tat and stuff as you can. If you have shelves of books, make them as tidy as possible. Shove everything not is immediate use in cupboards. This will make your home look bigger and almost always more attractive.
Clean the house.
Fill it with nice smells, like fresh coffee or fresh flowers. But don’t overdo it as many buyers will see through your efforts and think of you as desperate. Some people are (often justifiably) suspicious of new paint jobs, as they wonder what’s being covered up.