Q: I want to sell my house now while the market is stable but I don’t want to pay huge estate agents fees. How else do I sell it?

A: Buying and selling online is becoming more enticing to consumers wanting to save on their costs. There’s been a definite upswing in the number of online estate agents in the past two years and they are efficient in terms of service and costs.

What I would say though, is that you must differentiate between a high street estate agent with a website and a proper online estate agent. For example, Andrews Estate Agents have a website but, when selling your property you still pay them a high street estate agents fee.

We’ve had a good look around and suggest you compare, but eMoove look good and say this:

“For too long you have had to pay through the nose to sell your home. Now, thanks to the dominance and convenience of the Internet there is another powerful way.

We are real people, in a real office but with vastly lower overheads than ‘traditional’ agents. We pass those savings on to you in order to provide a full on estate agency offering with fee options ranging from just £249.00 plus vat. Conversely, the average agency fee in the UK is 1.6% of sale price. In monetary terms that’s about £2700.00, based on the average property value, plus a lot of vat.”

Thanks Russell Quirk! www.emoov.co.uk/blog

Sarah Beeny, property television presenter and founder of www.tepilo.com, says “Times are moving on – we don’t need to pay for estate agents shop fronts, mini bars, telephone systems and branded cars – if you would rather keep the money and spend it on a holiday in Seychelles or a new kitchen when you move into your new home, then pop your house online.

“Now in 2009 most people wanting to buy a house will go online, pop into Google ‘houses to buy near Northampton’ and come up with a modern equivalent of those high streets. One click away and you are on an online portal and you can check out what is available, for how much and download the details.”

In a report by Which Money in 2009 it was found that “Selling online means home owners can avoid using traditional high street estate agents that typically charge between 1 per cent and 3 per cent of the sale price.

The study by consumer group “Which?” said fees charged by online agents tend to be much lower – from as little as 0.5 per cent. However, it warned to watch out for additional costs, such as for sale signs, which can add £30 onto your bill.

The study compared three different online agents marketing a home with an asking price of £200,000 and the potential savings made versus an average high-street agent charging a commission fee of 1.5 per cent.

But while some home owners may decide to bypass the middle man and sell independently, Which? Money warned that this option can cost time and money to market the property.

There is another way!  Why not negotiate with your high street estate agent on their fee?  Personally, I’d go with online selling and spend the savings on new furnishings!

Q:  Is there really a house shortage in the UK or is it just a myth?

A:  All our research would indicate that there is a definite house shortage in the UK at present.  There are many reasons behind this and I’ll try to cover a few to explain why.

Firstly people have been holding off putting their homes on the market for the last two years due to the poor return they believe they’ll get from selling.   In some cases this is simply due to over inflation of the prices, but in others it’s due to a fear of negative equity in the property for those who overpaid in the first place.

Secondly investors who saw the opportunities of the recession early on managed to scoop up a lot of property for buy to let investments and haven’t put those properties back on the market to sell.

If you consider that the UK needs about 240 000 houses a year then just these two factors will have an enormous impact.

Add to that the rising increase in the UK population due to immigration and birth rates.  Our divorce rate, aging population and youth leaving home earlier is also increasing the number of one person households, again driving up demand.

Question:

Online Enquiry
An enquiry has been made on the Property Price Advice website with the following details.

Name:
Claire – Oxfordshire

Enquiry:
What can I do to help my daughter buy a house?  She’s a first time buyer and finding it difficult to get a mortgage.  I’d like to help her but where will that leave me in terms of return and investment?

Answer:
There are a lot of options on offer for first time buyers if you shop around but it is very difficult to get home loans these days unless you tick all the boxes in terms of deposit, stable employment and track record.  What you’re interested in doing is probably covered by a Guarantor Mortgage but that has its drawbacks for you, the parent, so consider carefully before you agree.

A guarantor mortgage is where a parent/relative agrees to guarantee the mortgage against default.  The only thing is that some mortgage lenders want the guarantor to cover the whole amount on the property.  The nice part is that once your daughter is able to afford the monthly repayments herself you can be released from the agreement.

While all 100% mortgages have been pulled from the market recently you can apply for one with a guarantor mortgage but the parent needs to prove that their own mortgage is ending or, that they can cover the cost with their income or savings if necessary.

It would be a good idea to buy the property for your daughter to ‘rent’ back from you instead, until she is on her feet financially.  If it were a two bedroom property she could then share with a house mate and derive income to pay you the rent or the mortgage when she takes it over.
There are other issues to take into account though such as inheritance tax and capital gains which could impact on you buying another property to eventually pass to your child.  Please take legal advice on this before entering this kind of agreement.

Question:
Online Enquiry
An enquiry has been made on the Property Price Advice website with the following details.

Full Name:
Jeanne – Bristol

Enquiry:
I’d like your opinion on ‘trading in’ my 3 bed semi for a new build.  Would I be doing this at the right time?  I would also like to know more about any hidden costs or possible pitfalls of doing this via a builder.

Answer:

Timing is always an issue in any property situation and never more so on new builds with the election looming in 2010 however that shouldn’t affect a part exchange deal undertaken now as most builders part exchange where the home being traded in is no more than 70% of the selling price of the house/plot being purchased ie:  the same % applies regardless of the current market value.

A few things to watch out for are:
1) Check the limit that the builder will offer i.e. there’s usually a maximum value for your current property.
2)Be aware that at least two (2) independent valuers will value your home at what it is likely to achieve in the current market i.e. not an advertised sale price and the offer is likely to be an average of those.
3) If you cancel the deal after introduction of a buyer by the builder for your own home you can still be liable for the fees involved so check first.
4) The builder will ask for a retention bond/deposit against the condition of your old home and accurate meter readings from utilities companies of around £500

Having said that doing a part exchange for a newly built home is one of the better ways to achieve the home you want in a deflated market where selling your own home is difficult.  It provides you with a guaranteed purchase, you can move in when your new home is ready and, more often than not you save on expenses as newly built homes are economical and efficient in terms of energy saving and maintenance giving you peace of mind too!

Question:

Online Enquiry
An enquiry has been made on the Property Price Advice website with the following details.

Full Name:
Alex Sadler

Enquiry:
Don’t know if you can help / advise me. Have plans to turn my 3 bed link detached house into a 4 bed semi. Is this wise? How will it affect house value? Will it make it more or less sellable?

The Team’s Answer

You’re definitely right to add value to your home at the moment as house prices are still pretty static so riding out the downturn is sensible.  There is always the question about detached vs linked and semi but going from a linked to a semi isn’t going to affect your current market value in this climate.  If anything, it will add value ultimately as you are gaining interior space which is pre-requisite for buyers in this climate.  If you are not in the market to sell take advantage of the slump in the building market to get your work done for less than usual.  You would be well within your rights to commission a good, reputable builder at around 65 – 75% less than 2007 building prices.  Make the most of the recession in that way and you will definitely benefit in the long run.  We won’t see prices rise again until around the 3rd quarter of 2010 and that is prime rate dependant!  Go ahead is our advice.