House sold.. do I buy again or bide my time?

poppy38_2

I've recently moved from the Isle of Man back to the UK. I moved so that my daughter could pursure further education. My house had been for sale since June, but it has now been sold (I hope) and buyers want to exchange and complete in next week or two.

We have been living in Wigan for 3 months now, so paying rent, a mortgage and 2 sets of household bills has been crippling me. So I'll be pleased to reduce my outgoings after the sale, but really don't know what to do next.

I haven't lived in the UK for 15 years, so I would appreciate some advice on whether or not this is a good time to be thinking of buying my next home. Do I hold out for another potential drop in prices, or do I bank the profit from the sale of my house and sit tight while still renting?

I should make £140k profit from the sale of my house and in an ideal world would like to buy outright in this area, which is possible as the houses are cheaper here. I just don't know if now is the time to do it.

Also, I have no other savings, so have to allow for conveyancing fees, and stamp duty (if necessary) out of the £140k.

I am currently viewing houses in the £135-£150k price range. For example, today I saw a house for £145k that I liked, and was liveable in, but at some point would need new bathrooms and possibly the 2 smaller bedrooms knocked through. It also needs new stair carpets and some cosmetic work (new internal doors, some floor tiles replaced, etc). I don't want to offend the buyer with too low an offer. But in this climate, could anyone offer any advice on what offer I should go in with first?

I do have a limit and I won't go over it. But if I can still have some cash left over to do work on the house then that's a bonus.

The sellers are a divorcing couple. Wife has moved out with the kids. Husband (who did our viewing) is desperate to keep the house as they've lived in it since new (1999). But the court has ordered them to sell and wife has been awarded a 90% share of the equity. Husband is moving back in with his parents as he can't afford to buy her out. Wife doesn't want the house. Not sure if this all puts me in a stronger or more vulnerable position as a potential buyer.

Any suggestions gratefully received as this is all new to me and I can't afford to make a mistake.

Many thanks,
Alison

mo786uk

Well no one can totally accuratley predict hosue prices.

I think house prices COULD still go down but they will recover and probably stay steady after a while - I dont think they will rise as quickly as they did a few years back.

So if I had the cash right now I would probably buy right now as its a hassle to wait and spend money on rent when in reality the drop down in prices over the enxt year may only be a few k our of 130k.

Others may say the worst is over and buy now.

Best bet is to get some professional advice - but remember they are all biased too and cannot predict the future.

zzzLazyDaisy

If you can afford to buy outright, that will put you in a secure position (I am mortgage free and it is the best thing I have ever done). Now is as good a time as any (in my view). It is possible that prices have further to fall, but no-one has a crystal ball, and as long as you intend to stay put for some time, the ups and downs of the housing market won't affect you. If you wait, you are paying rent in the meantime, which is better in your pocket than your landlord's.

However, personally, I would not go for a house where the husband is only moving owing to order of the court. He has no incentive to deal with things promptly and every incentive to delay. He is also likely to be obstructive regarding any offer you might make. It is a buyers market, and as a cash buyer you are in a strong position. Personally I would keep looking.

It is worth keeping an eye open for houses that are already empty and/or with no onward chain. This is usually because there has been a death/repossession/relocation which often means that the seller is looking for a quick sale and is more likely to consider a reasonable offer, and also the actual moving process should be smoother.

If you have a job you might want to consider taking a small mortgage to give yourself a cushion for anything that might need doing around the house once you have moved in.

Good luck!

Emmzi

When the FE is finished are you likely to move again to where the work is?

House move costs I don't know - £10k to buy and sell? I might sit tight for the sake of a couple of years. Unless Wigan feels like home, but I don't believe the job market is so good there? Might be inclined to move somewhere more commutable for London but not so far south it's a nightmare pricewise. Brum has a new commuter line.

johnbusby

Emmzi wrote: »

When the FE is finished are you likely to move again to where the work is?

House move costs I don't know - £10k to buy and sell? I might sit tight for the sake of a couple of years. Unless Wigan feels like home, but I don't believe the job market is so good there? Might be inclined to move somewhere more commutable for London but not so far south it's a nightmare pricewise. Brum has a new commuter line.

Not every job in the country is in London, plenty of the other big cities offer good job prospects....

NeverAgain_2

All you have is £145K, which is a lot of money to spend in Tesco, but a relative pittance in the property market.

I take it you are risk adverse - don't want to lose the money - so this makes you firmly a nester, not an investor.

Your capital will only just buy something suitable, so any upward blip in the property market will leave you stuck in rented.

A downward movement would assist you, but each month you are paying presumably £600ish rent, which wipes out most of any likely reduction, given you are operating at the lower end of the market.

Buying now is the low-risk strategy - you will always have somewhere to live and to sell.

Having said that, I agree it might be wise to give the divorce house a wide berth - too tempting for the reluctant-to-move husband to make the transaction difficult.

He may be reckoning on messing around a string of potential buyers for a few months at time, thereby allowing him to stay in the house for another year or more.

poppy38_2

Thank you for the replies.

I lived in Wigan until I was 17, but have been away for 26 years (11 years in London, 15 years on the Isle of Man). I have friends and family here, which was partly my reason for relocating back to this area. Plus the College my daughter now goes to has a great reputation. We have 2 years of A levels and a 4 year degree (within commuting distance of Wigan) before my daughter gets a job. By then she will be plenty old enough to fly the nest and buy her own home.

As far as work goes, I arranged a job here before we moved. I am a single parent and always make sure I can provide for my daughter. I don't know about local unemployment. All I know is, I get offerred more work than there are hours in a day, so no worries on that score. I could earn more in London, but that would be eaten up by increased costs of housing, commuting and general cost of living. Even if I was mortgage free I could continue to work full time to fund any repairs/updating to the house.

The man living in the house is desperate to move. He is currently paying the mortgage and maintenance for 2 kids, and can't afford it all. he has already made plans to move back in with his parents. Coincidentally, we also just found out that this man works with my cousin, so we can possibly get a bit more background knowledge before we consider an offer.

I am looking at this as a long-term investment, so I see your point about the market possibly dipping and recovering during my time there. I just need to give some thought to what I want/need to offer. I have seen 3 properties and have 3 more to see this week.

Even being in a strong position, it's nerve-wracking stuff

poppy38_2

My relative pittance will buy me a 3 or 4 bed semi-detached / detached house in Wigan.
We have lived in a very small bungalow on the Isle of Man for 15 years, so we can now get a bigger house mortgage free.
I know it's not a lot of money in the property market, but it's a lot of money for me

zzzLazyDaisy

Sounds like you are well on top of things! Well done!

If you look around on forums, you'll often see that people advise going in with an offer 10% less than the asking price, and negotiate up from there. But in my view that really depends on how realistic the asking price is to start with.

There is a site called 'up my street' where you can see what prices property has sold for recently (this isn't the price the house was advertised at, but the amount that was actually paid and registered at the land registry). This might give you an idea of what the house is worth - also remember there is a time lag so you'll be looking at prices from the summer so you can figure in a drop for the time of year and the fact that nothing much will be selling at the moment. Also you are in a position to move quickly, as a cash purchaser, so that gives you the edge too.

Good luck and let us know how you get on.

Dx

dawyldthing

NeverAgain wrote: »

All you have is £145K, which is a lot of money to spend in Tesco, but a relative pittance in the property market.

I disagree with this, there was a 5 bedroomed house round here for 100k not long back, and its not a bad area at all really (mid Derbyshire), low crime rates and good links all over the country. Depends where your looking really

poppy38_2

Thank you for your advice Daisy. I hadn't heard of that website so I'll check it out.