In the current climate, buyers can afford to be fussier than ever - so if you're thinking of selling, you need to adhere to the golden rules of closing a sale, says Annunziata Rees-Mogg.
Estate agents and house-price index compilers are becoming increasingly well known for their relentless optimism. Take the latest comment from Halifax, which informs us that prices in London increased by 0.1% in March "suggesting that the market in the capital may be stabilising". The truth is that any number as small as 0.1% tells us absolutely nothing at all - it is statistically meaningless. To see a meaningful number, look instead to transaction levels. Mortgage approvals fell to a five-year low of 82,000 in December, fell a further 3,000 in January (despite the fact that December is traditionally the weakest month), and while they recovered to 86,000 in February, this still makes them 35% below a year ago. What's more, according to Nationwide, UK house prices fell by 0.6% in March, the biggest fall since 1995 and one just about big enough to be considered statistically significant. MoneyWeek has been warning of the real fragility of the UK housing market since last May, but even now it rather looks as though the pain is only just beginning.
For further proof of this, look no further than the property sections of the weekend papers. No longer are they packed with happy features telling us of the wonders of buy-to-let investing and explaining exactly why it is that two-bedroom bungalows in Orkney are worth £120,000. Instead, their pages are full of features aimed at helping desperate sellers persuade the few remaining buyers in the market to choose their house over others.
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The Halifax might not be keen to admit it, but this is a buyers' market: in February, twice as many houses came to the market as were sold or withdrawn, yet there are 25% fewer buyers about than there were a year ago. This means that not only can buyers take their time, but they can afford to be fussier, pickier and generally more difficult. Take the case of typical buyers Colin Shaw-Downie and his wife, Sally. They sold their family home a year ago and have been renting ever since. They've also viewed 30 properties for sale, but not bought any of them. "There's a lot of property on sale, so we're waiting until the absolutely right one comes along," says Colin. "I've seen prices drift down 10% or 15% since we've been looking and there are more reductions to come. There's no point in leaping in and paying £100,000 more than in two months' time, so I'm going to wait and see what happens," he told The Sunday Telegraph.
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Two years ago, buyers had to be nice to sellers - now it's the sellers doing the accommodating. The upshot? Neutral decor, laminate flooring and a scattering of scented candles will no longer be enough to sell your house: you have to do more. Much more. For some time now, developers have been offering new buyers everything from new designer kitchens to lump sums of cash to get them to sign on the dotted line. Now private buyers are at it too - throwing in extravagant extras - to give their houses an edge over the voluminous competition. One house for sale on the Thames in Chelsea even comes with the original James Bond speedboat used in From Russia With Love thrown in for the £5.5m price tag. The boat is only worth about £25,000, "something akin to a shop-keeper sticking a free penny chew on the outside of a £1.45 box of chocolates," says The Mail on Sunday, but it might just make a buyer view this house instead of another one. Other vendors have thrown in the stamp duty - especially important if your property is going for just above the £250,000 threshold - but the most common added extras so far are furniture, sound systems and cars.
Be clean and tidy
Still, none of this means that ensuring you have an appealing and clean property isn't important. It is. Estate agents' favourite buzzword is de-clutter'. And for good reason - a buyer needs to imagine living in a house, something much easier to do without a strong personal style in evidence. The golden rule is to work on first impressions, Peter Toothill, manager of Dacre, Son & Harley in Guiseley, West Yorkshire, told The Independent. The exterior of a house is just as important as the interior. Trim the hedges, mow the lawn, sweep the driveway and weed the flowerbeds and keep doing it until you hook a buyer. As for the interior, think neutral colours, clean surfaces and space. And think twice before splashing out on major construction work, such as building a conservatory. "If someone can put in a downstairs toilet for not much extra cost, then that might be worthwhile, but it probably wouldn't be financially worth putting in a loft conversion,"Michael Thompson of Gascoigne Halman in Hale, Cheshire, told The Independent.
Be flexible
As a vendor in a buyers' market, you will also need to be flexible about viewing times and being welcoming to the buyers. It might be irritating when they accept and then stay too long, but do offer them tea. It's worth putting the extra effort in to forge good relationships with your estate agents and their clients. That way, they are more likely to come back to you with an offer rather than the difficult vendor down the road.
Cut your price
There's a price for everything, so if you really need to sell, you have to cut your price. Too many sellers have set ideas about what their house is worth'. But how much a house in the same street sold for a year ago, or how much an estate agent valued a house at earlier this year - or indeed any time - tells you nothing about your house's value: it's worth what someone will agree to pay for it and that's all. Vendors need to be willing to listen to all sensible offers, Melfyn Williams of estate agents Williams & Goodwin told The Independent, and be prepared to slash their price significantly for a quick sale. Note that if you have to sell, you really do need to make a quick sale. According to a new report by Cluttons and Oxford Economic Forecasting, there is an 80% chance of further price falls this year, and the possibility of an interest-rate hike after the election isn't going to make buyers any keener to buy. Cut your price now and you might find you lose less money over the long run.
