Advice on selling

Rachylou1981

Hi all

Will try to keep it brief

Have a 2 bed terraced in a very poor area where the main buyers are landlords. We need to sell it, renting not an option for us

House valued at 40K, up for 34,995 since June. Need to sell for 28K or over in order to pay off mortgage and fees but we are not getting any interest other than companies who want to buy for 25K to sell to investors and we also have an auction company pestering who are saying a reserve price of 25K. They both say we have to remove from our EA and go with them and are claiming there are no fees for us or hidden costs and when I ask for email info, I get generic info and I just don't believe that we will end up with a good price and not have to pay fees. I feel quite vulnerable to it all and don't want to make the wrong decision and end up out of pocket. I've also heard about companies reducing the price further close to completion.

Our EA is a local one and we are on RightMove. No tie in. But I fear once we leave them, we have lost the good photos of the property and we will no longer be advertised on RM. I just wonder if it's worth sticking with them and reducing price again - we are not in a desperate hurry to sell but at the same time, don't want to be paying for two houses for months

hazyjo

Are you talking about the modern auction method? Wouldn't touch that with a bargepole. If a traditional auction, it might be worth trying.


Will you give us a link so we can make any suggestions? Although for a house at that price, it's really down to area and if the BTL investors aren't touching it, it's very unlikely anyone else will.


You need to weigh up how much you're actually losing on it every month as to whether you should just take the hit and sell low.

System

To find it’s true value - traditional auction, not modern or online (forget those as the fees are silly and you end up selling below value)

I wouldn’t sell to a company but think you will be surprised how many investors bid at auction.

If you can decorate it and put new floor covering down, you’ve ticked some important investors’ boxes.

Selling by the traditional method of auction you can pass ALL fees onto the buyer. This will be reflected in the sale price but a least you will have no nasty surprises. Just tell the auction company the buyer is to pay your entry fee, your legal fees, search fees etc. And tell them what reserve price you want.

If it doesn’t reach the reserve you can decide to open negotiations with bidders after the auction, with auction conditions still applying.

You’ll get a cash buyer at that price and could insist on 14 or 28 day completion.

Auction House are good and advertise on Rightmove.

I say this not knowing what rental yields are like in your area.

Rachylou1981

hazyjo wrote: »

Are you talking about the modern auction method? Wouldn't touch that with a bargepole. If a traditional auction, it might be worth trying.


Will you give us a link so we can make any suggestions? Although for a house at that price, it's really down to area and if the BTL investors aren't touching it, it's very unlikely anyone else will.


You need to weigh up how much you're actually losing on it every month as to whether you should just take the hit and sell low.

I read through their info and can't find the word 'modern' in their info as I did read a bit about it all on here. It does look like they charge the buyer a fee and I just can't seem to get my head around that being a good way to sell for us because what buyer will pay up to 6K to just reserve the property and still pay 25K actual price - if they do that, they may as well just buy from normal EA method?

Not a lot of point in posting the link. It is one of the better quality houses in the area i.e. newly decorated and new boiler etc. I don't think there is anything I can do other than keep dropping the price. I've done comparison and whilst some properties are cheaper, they are in need of refurb and mine isn't. I guess the difference could pay for that refurb though

Rachylou1981

ritfor wrote: »

To find it’s true value - traditional auction, not modern or online (forget those as the fees are silly and you end up selling below value)

I wouldn’t sell to a company but think you will be surprised how many investors bid at auction.

If you can decorate it and put new floor covering down, you’ve ticked some important investors’ boxes.

Selling by the traditional method of auction you can pass ALL fees onto the buyer. This will be reflected in the sale price but a least you will have no nasty surprises. Just tell the auction company the buyer is to pay your entry fee, your legal fees, search fees etc. And tell them what reserve price you want.

If it doesn’t reach the reserve you can decide to open negotiations with bidders after the auction, with auction conditions still applying.

You’ll get a cash buyer at that price and could insist on 14 or 28 day completion.

Auction House are good and advertise on Rightmove.

I say this not knowing what rental yields are like in your area.

Thanks, the house is in excellent condition with new carpets, new boiler etc. It's one of the best in the area.

So the auction - do I just put it to auction myself rather than use a company to do so? It's all a bit confusing to me. There always seems to be some kind of middle man talking about fees whether we pay or buyer does and as you will see from other post to HazyJo, I don't see why a buyer would pay 25K plus a big fee which I've read can be up to 6K (unless this fee is only for higher buy properties)

Rent in the area is 350-400 - I could get top end for my property easily

hazyjo

Rachylou1981 wrote: »

I read through their info and can't find the word 'modern' in their info as I did read a bit about it all on here. It does look like they charge the buyer a fee and I just can't seem to get my head around that being a good way to sell for us because what buyer will pay up to 6K to just reserve the property and still pay 25K actual price - if they do that, they may as well just buy from normal EA method?

They will word it differently. You have described it already - it's where they buyer pays the EA fee basically, although it's hugely inflated. Buyers hate it. EAs sometimes push it. Usually unfavourable tie-in clauses too. Advise you not to touch it - add it into a traditional auction if you want to go down that route.

System

Yes approach the auction company yourself. You don’t need a middle man/ company.

6k is ridiculous. Your entry fee should be <1k. The buyer fee should be about 750. Search fees about 300 and solicitors <500. Get the auction company to quote you and get a solicitor quote. Then go back to auction company and have them enter it with special conditions stating the buyer is to pay all of this. This is a very common way of selling and familiar to investors. You can simply take the sale price less 0 in fees.

Rachylou1981

ritfor wrote: »

Yes approach the auction company yourself. You don’t need a middle man/ company.

6k is ridiculous. Your entry fee should be <1k. The buyer fee should be about 750. Search fees about 300 and solicitors <500. Get the auction company to quote you and get a solicitor quote. Then go back to auction company and have them enter it with special conditions stating the buyer is to pay all of this. This is a very common way of selling and familiar to investors. You can simply take the sale price less 0 in fees.

To be fair, the 6K figure has come from me reading stuff on here so I am properly way off and this was an example for bigger properties. The info they've sent give no figures and is often brief purely to give me some info because I've asked (which rings alarm bells).

Thanks for your advice. Will avoid the companies which has been my gut feeling

eddddy

Get some other EAs to look at your house, and give their opinions.

If you're keen to sell it, you could ask the EAs what they think about putting it up for 'informal tender' (sealed bids).

i.e. They advertise it with a guide price and a deadline for submitting their 'sealed bid' offers - maybe 2 weeks away.

Then you look at all the offers, and decide which one you want to accept (if any).

Rachylou1981

eddddy wrote: »

Get some other EAs to look at your house, and give their opinions.

If you're keen to sell it, you could ask the EAs what they think about putting it up for 'informal tender' (sealed bids).

i.e. They advertise it with a guide price and a deadline for submitting their 'sealed bid' offers - maybe 2 weeks away.

Then you look at all the offers, and decide which one you want to accept (if any).

I had it up with a different EA back in 2016 with no interest which makes me know it's a price issue. The house itself is fine and I doubt any other EA could sell it as it is.

I don't think I would get any offers unless I dropped it very low - which is my plan but in increments and it was doing this Vs going with a company/auction who are trying to entice me with investors on their books who will buy within a quick timeframe and no fees

eddddy

Rachylou1981 wrote: »

...Vs going with a company/auction who are trying to entice me with investors on their books who will buy within a quick timeframe and no fees

Unfortunately, that logic doesn't really work. (It sounds like you may have been taken-in by the hype of 'quick sale' companies and auctioneers.)

Those investors will be looking at Rightmove as well.

• So those same investors are seeing your property on RM at £35k, and they're not interested

• So they will be equally disinterested in paying you £29k + £6k to the auction company

• And equally disinterested in paying you £27k + £8k to the 'quick buy/sale' company

But some EAs are better than others, and appointing a new EA (maybe with a price reduction) will cause a bit of new marketing activity.