The current property market is seeing a surge in activity with many reporting it as “frenzied” or “turbo-charged” -- a seller’s market. But what does that mean if you are trying to buy or sell a home now? We explain what to consider and offer you our top tips to help you navigate the property market now..
The current property market
Rightmove report this month that house prices have rocketed to an all-time high, with properties selling at the fastest rate ever recorded. Our latest House Price Watch reveals that while huge demand from buyers is driving prices up, this is against a backdrop of a lack of properties for sale. Buyers are snapping up properties due to the stamp duty holiday and the new mortgage guarantee scheme. But many homesellers are waiting until lockdown is over and the vaccination programme rolled out before they list.
Is it a ‘seller’s market’?
Yes. Demand from buyers is far greater than the number of properties on the market. This means that competition amongst buyers is fierce and sellers have the upper hand commanding higher prices and faster sales. Rightmove report the number of potential buyers enquiring about each available property is at a record high. Almost one in four properties that had a sale agreed in March had been on the market for less than a week. If you’re looking to buy in the current frenetic market, then you need to be on your toes and ready to move quickly. With buyers eagerly awaiting fresh choice coming to market, this the best sellers’ market in ages.
Tips for buyers in a seller’s market
If you’re buying, don’t despair, while competition is strong at the moment there are some things you can do to strengthen your position…
· Avoid being in a chain if you can
From a seller’s point of view, knowing that you aren’t in a chain and likely to hold the sale up while you find a buyer, will certainly edge you closer to the front of the buyer’s queue. If you put in a decent offer, it is likely that you will be preferred to a ‘chain’ buyer that bids a similar amount. Selling before you buy also means you’re likely to be able to move more quickly and less likely to get gazumped.
· Be proactive
With a shortage of homes available for sale, many of the best houses and flats are sold before they even reach the market. So, it is really important to establish relationships with local estate agents in your search area and to show them that you are a serious buyer in a good position. That way, you’ll be first to know about new properties. Read more about how to get to the front of the buyer’s queue.
· Act quickly
With lots of competition between buyers, the risk of being gazumped also increases, so you need to act quickly once your offer is accepted. Securing your mortgage agreement in principle before you start your search will put you in a stronger position, as will finding a conveyancer to ensure you get all of your ID checks done in advance. Knowing you can afford their property and won’t delay the process with applications and solicitor searches makes you a more reliable buyer.
· Prepare for sealed bids
In the first quarter of 2021, 36% of sellers received offers from three or more buyers, so be prepared for a bidding war. A significant minority of negotiations are going through the sealed bid process, where buyers put their bids in sealed envelopes for the seller to pick the top offer. Richard Freshwater, Director at Cheffins states “On average, every house we put on the market at the moment sees over 40 requests for viewings. Sealed bids have become the order of the day, with over 25% of sales since February ending up in a best and final offers situation.”
But while sealed bids are designed to get the highest offer price, they can sometimes be beneficial in helping buyers stick to their budget. Find out more about making an offer and how to haggle.
· Be careful not to pay too much
With prices already inflated in a seller’s market, making sure you don’t pay over the odds and sticking to your budget is vital. But with competition high it’s also important not to underbid. So make sure you do your research and check you’re not paying over the value of the property. To find out how much other houses in the same area or street have sold for in the past, the best website is the Land Registry. While the stamp duty holiday is in place until 1st July, it’s also worth putting aside some contingency budget in case you miss the deadline.
Tips for seller’s in a seller’s market
· Find a good estate agent
In a seller’s market, estate agents will be competing for any new properties coming on to the market. With more buyers in the market than properties available, estate agents will promise the earth to get your property on their books. So you need to make sure you’ve shortlisted, compared performance, negotiated the fees and checked the contracts before you sign.
· Instruct your conveyancing solicitor early
The conveyancing process usually takes around 12 weeks but, the pandemic, coupled with increased buyer demand, is causing a huge backlog and delays are inevitable. Some are even finding it difficult to find a conveyancer at all. So you need to ensure you find and instruct quickly. Don’t wait until you’ve received an offer. Our advice is to get a conveyancer on board as soon as you choose your estate agent.
· Be upfront with your property information
Usually before you exchange contracts, there are a number of questionnaires you will need to complete. This information is provided to the buyer to give upfront information on the property. You will need to complete a TA6 form providing information on boundaries, disputes, known proposed developments and utilities. But it will also help to have any other paperwork ready, such as your certificates of building works, guarantees or copies of your lease. Here’s a checklist of essential house selling documents.
· Choose a buyer carefully, and remember don’t just focus on price
In a seller’s market there will be no shortage of buyers for your property. However while getting the best price for your property will be high on your list, it’s important to consider other factors. Knowing the position of your buyer will be key to you accepting an offer, such as whether their mortgage is agreed and the length of their chain. Accepting a high offer on your property may be the dream, but if a buyer has offered over the odds you’ll need to be sure that their mortgage offer is able to stretch to that price. Choosing what price to sell your home for may not seem like a challenge in a seller’s market, but it does affect how long it will take to sell your home.
· Selling a leasehold property
If you are selling a leasehold property, the process will be more complicated, but don’t worry, it’s still possible with a little preparation. Before you list your home, you will need to find out how long is left on your lease; a shorter lease will determine the sale price of your property. Buyers will also want to know what the service charges and ground rent fees are, what the building insurance costs, if the property is share of freehold and if there are any planned works on the development. You may also need to request an EWS1 form to confirm the building is safe and free from cladding. Your solicitor will be able to advise you further.
· Selling a home with a Help to Buy equity loan
When you buy a home with Help to Buy, a second charge is placed on your property title at the Land Registry. This means you can’t sell your home unless the Homes and Communities Agency (HCA) is repaid their loan percentage. You can sell your home normally on the open market but you will need to contact Target – the firm the HCA uses for all administrative duties regarding Help to Buy once you’ve received an offer.
Comments