Top tips for buying and selling in a tough property market- Sarah Coles

Sellers

Treat estate agent estimates with scepticism

The general rule still applies that to find the right asking price you should ask three estate agents, and the right answer will be somewhere between their estimates. Unfortunately, right now, there are very few properties coming to market, so agents will be trying to win your business. It means there’s a risk they’ll overprice it in order to stand out. It can be tempting when someone comes in with a far higher estimate, but you’ll get the most attention when you first hit the market. If you overprice it, you’ll lose the initial bump, and could end up trapped in a cycle of price reductions.

Be demanding

You need to stand out, so you can’t afford to be let down by poorly worded details or dodgy photos – or indeed by someone holding viewings who isn’t selling the benefits of your property effectively. You can ask for photos and details to be redone, and for someone else to do the viewings. It may feel horribly embarrassing, but it’s well worth it.

Prepare it for sale – within reason

If you walk round your home, you’ll see the things that might be off-putting for a potential buyer, and you have a chance to address them. You’ll need to weigh up the cost of doing the work and the delay it will add to the sale – against the improvements you can make. This usually means a coat of paint or replacing one particularly disastrous carpet can pay off – but a new bathroom isn’t worth the cost or the effort.

You should think about how you present your home too. If you have single beds in double rooms, people may struggle to see the potential, and if you have too much junk packed into too small a space it can be seriously off-putting for buyers who can’t see beyond it – either metaphorically or literally.

Be as flexible as you can

The average discount at the moment is 4%, so you need to be prepared for offers. Make a decision about how much of a discount you can live with – although bear in mind that in this environment you may well be able to secure a discount when you’re buying too. If you can’t afford to move much on price, you can consider other types of flexibility. Can you, for example, move into a rental property for a while so you offer a chain-free purchase?

Put the work into a sale

Once a sale is agreed, the hard work starts. Try to stay on top of this, by instructing a solicitor as early as possible, then answering queries quickly, and chasing your solicitor if there is a delay. At the moment, the gap between agreeing a sale and completing is wider than normal, and the longer your buyer has to wait, the bigger the risk that they get cold feet, so it’s worth keeping things moving as quickly as possible.

Buyers

Don’t try to wait for the bottom

You’ll only know when you’ve reached the bottom of the market in retrospect – after prices start to bounce back. At this point, demand is likely to be booming, and you’ll be competing for a property with far more people. If you’re waiting for anything at all, you can wait for the home you want to reach a level of affordability you’re comfortable with.

Consider your mortgage

By the same token, you’re not in a massive rush. There are absolutely no guarantees that prices will fall if you wait, but there’s actually a decent chance that mortgage rates will drop back slightly, which could leave you better off. Again, bear in mind that you’re not waiting for mortgage rates to hit the bottom, because you’re not going to be able to spot this until after they’ve started rising again. You don’t need the best possible rate, you just need one you can work with.

Drive a hard bargain

If the market is falling, the best way to protect yourself is to get a big enough discount on the property that you’ll still be getting a good deal if the market as a whole keeps sinking. If the seller rejects a reasonable offer out of hand, and you’re not absolutely desperate for this particular property, you can walk away. If you leave the offer on the table, they may well come back to you if they aren’t getting any better offers.

Make sure you’re happy with it for the long term

The people who are most likely to run into trouble at a time of falling prices are those with smaller deposits, who’ll need to sell up and move on within a year or two, so you should be looking for a long-term prospect. Even if you bought at the worst possible time before the market fell in September 2007, the property value would have recovered within seven years. If you bought a year later, when things were still on the way down, the price would have recovered in less than two years.

If you take a long-term view, then even if you have a proven track record of selling and buying during a crash, it’s only a matter of time before you make up the lost ground. This is what I have to keep reminding myself of as I instruct estate agents, prepare the details, and wait for the bottom to fall out of the market.

Yorkshire’s cost-of-living Achilles heel

HL’s Savings & Resilience Barometer looks at all sorts of aspects of people’s finances – from debt to pensions - and breaks them down by region, to identify the weaknesses in each area. In Yorkshire and The Humber, the key issues are savings and spending.

After the North East, the region has the second lowest average savings balance in the country, at just over £7,500. As a rough rule of thumb, you should hold at least three months’ worth of essential outgoings in an easy access account for emergencies, and in Yorkshire only 58% of people have this recommended minimum to hand.

The other problem area is how few people have enough cash left at the end of the month to be resilient. At the start of this year, in Yorkshire and The Humber, only 20% of people did, and by the end of the year this will fall to 15%. In both cases, this is lower than anywhere else in the country.

Unfortunately, it means that as prices continue to rise, we can’t afford to take our eye off the ball. We need to keep a beady eye on all our spending, to make sure we can stretch our income further for just a bit longer – until inflation eases and we have a chance to get our breath back again.

SARAH COLESHead of Personal Finance and Podcast Host for Switch Your Money OnHargreaves Lansdown

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