Estate agent advice - selling leasehold flat in London

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82137832#Comment_82137832

You do not have accept any offer if you do not want. You can refuse a low offer outright, or you can go back with a counter offering.

Nothing is fixed until you exchange contracts- until then everything is basically just an informal agreement that either side can pull out of . Approx 30% of sales fall through before exchange of contracts.

I guess to maintain marital harmony, the initial asking price will have to be over £300k, and see if there is any interest. As said in another post, selling flats is not easy at the moment.

Bigphil1474

Try this house price index calculator. https://www.nationwide.co.uk/house-price-index

I used a random E6 postcode and it says that there has been a 12.49% increase in house prices between 2020 and now, making your property worth roughly £309k. It's not perfect, and you may get different results with your actual postcode, but I trust that more than your rough guesswork and adding £5k to what you bought it for.

If you market it at £300k, expect offers to be in the £270k to £300k range unless it's really in demand. Bear in mind average salary in London is around £60-£70k and people can usually get a mortgage around 4.5x salary, it's pretty much perfect first time buyer territory in the area.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82138314#Comment_82138314

I think you'll find the Nationwide calculator is far to crude a measure to apply to flats. Their index is heavily distorted by general house price inflation, which far exceeds that for flats.

Zoopla data Over a 10 year period since 2016 show houses have experienced an average 43% rise whilst the average for flats a measly 10%.

I suspect new build flats in particular will be suffering since they typically would have been overpriced at time of sale to deliver developer profit margin.

Best for the OP to manage his wife's expectations with cold hard facts.

Albermarle

Best for the OP to manage his wife's expectations with cold hard facts.

Sometimes easier said than done in my experience !

mta999

Agree with @poseidon1 - many flats in London (and elsewhere) are not selling even after months on the market and price reductions

Google 'flats not selling' eg

https://www.thisismoney.co.uk/money/mortgageshome/article-16135427/Flat-prices-London-continue-fall-71-000-shaved-typical-value-four-years.html

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82139859#Comment_82139859

One of the benefits of being single and childless, I have only my own expectations to manage😁

saajan_12

https://forums.moneysavingexpert.com/discussion/comment/82137864#Comment_82137864

How much do I have to pay the estate agent (if anything), if I change my mind about selling before accepting an offer?
After 12 weeks: nothing, if the property is withdraw entirely and not re-marketed by another agent within 6 months of termination.

This is very concerning. The last line suggests its essentially a 9 month minimum term - if you terminate after 12 weeks (just under 3 months) and then within 6 months of termination you remarket with another agent.

Where are you getting this from - I couldnt see it in the T&Cs screenshot?

Its more normal to have a 6 month clause where they introduce a buyer, you withdraw, then the same buyer re-contacts you separately to buy but that's very different to what you've described.

How much do I have to pay the estate agent (if anything), if I change my mind about selling after accepting an offer? (e.g. "Ready, Willing and Able Buyer" clause.)
Half their fee + VAT, plus agreed marketing expenses.

How much do I have to pay the estate agent (if anything), if I accept an offer, but the buyer eventually walks away?
Half their fee + VAT - and any outstanding marketing expenses - if the purchaser exchanges contracts but fails to complete.

This is also very concerning. Essentially its half a RWA contract, half conditional on exchange. The problem with RWA is who defines if the buyer is truly ready - what if they lower the price due to some survey issues, what if they stall for a year, what if they agree but only if you give them a bunch of unreasonable guarantees? Do you still owe half the fee? The cleaner and normal way these days is just a simple due upon exchange.

The second part re failing to complete is so rare its not worth debating. Most will charge the full fee if it fails post exchange, but it doesn't help you because you'd claim off the buyer (or whoever failed to complete) anyway, whether its full or half fee.

For all these points, find out from the other agents, and also check what exact term in the contract you're getting it from. All else equal, I wouldn't sign this contract, at least try to negotiate some of those clauses. Debatable if its worth 1/3 of the fee (£1000 higher for BE), I'd probably say it is.

Cocktailqueen

I think which Estate Agent you use is the least of your worries.

It has just taken me 14 months to sell my one bedroom leasehold flat in London. It was new when I bought it 13 years ago, in a desirable location and in excellent condition. Originally I put it up with Purplebricks after paying the upfront fee. I got an offer of 5k below asking price but it fell through after 4 months.

I reduced the asking price by 10k but still no interest. I ended up moving away from Purplebricks and using a local agent who had in the past sold 2 in my small block of 6 flats. I eventually sold it for 30k less than the offer I accepted last year that fell through because prices particularly in London for leasehold flats have been falling rapidly.

Leasehold flats are not selling. High service charges, lease extension costs and ground rents including horror stories about cladding and section 20 works etc are putting people off. Lenders are reluctant to lend where service charges are high and especially where ground rents are escalating. The Government is looking into abolishing leasehold and capping ground rents but that in a long way off if it ever happens.

Do lots of research on Rightmove/Zoopla about what is available in your area and how much they are up for and most importantly how much they are selling for as lots of properties are being reduced.

With regards to choosing an agent, ask them to provide details of their recent sales in your area and how long it takes each property they have on their books to sell.

Be wary of those who advise you to put it up for an unrealistic amount to get your property on their books and then having to reduce it to get any interest. You will see on Rightmove how many properties are being reduced so price your property realistically to achieve a sale. Also check that they advertise on both Rightmove and Zoopla. Some only advertise on Zoopla due to the cost of using Rightmove which is expensive. Good luck.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82140686#Comment_82140686

Your post is a useful dose of reality, from an actual personal perspective.

After eventually selling your flat , did you buy a house instead and perhaps moved away from London?

Given all the bad press about flats, and lenders covering themselves by way of lower valuations, I do wonder if this current depression in flat sales may turn out to be a more permanent malaise ( in England) , thereby increasing further the appeal of freehold houses and the growing divide in price compared to flats.

I further note that this is a peculiarly English phenomenon, which is not an issue ( at all) in Scotland where flat sales are still buoyant and represent around 36% of all sales.

https://www.bbc.co.uk/news/articles/c36y19re653o

One wonders what lessons England could learn from the Scots to try and stem the rot. For example Scotland's early planning rules on dangerous cladding seems to have been far more effective than England across social and private residential blocks in that country-

https://www.gov.scot/publications/grenfell-responding-in-scotland/

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82140686#Comment_82140686

I think which Estate Agent you use is the least of your worries

Yes the posts about examining the small print of the agent, seem to be focusing on a rather minor issue, compared to the poor market conditions for selling flats.