A New Seller... with a twist!

Optikal

Hi Guys!

I've owned my property for 18 months, having bought it from the council. However, in the two and a half years since my initial application the council has moved in a lot of really horrible, anti-social, horrid neighbours. This is making our life here almost not worth living From fights, to kids on motorbikes in the day... to loud music and aggravation until the early hours. As well as personal private issues i've mentioned on this site previously. The council has let the area go down the pan and seem unwilling to help the few of us that ARE respectful, earn an honest living and just try to get a bit of peace.

So i'm looking to sell. Now i know the possibility of offering it back to the council is an option, and i'm following that line of enquiry in another thread.

My question here is: I've never sold before, this being my first home bought under RTB conditions. So could someone please take me through a step-by-step of selling a house on the market?

I know my house is definitely worth more than i bought it for, so i'm also wondering how much a valuation normally costs and whether it's worth getting one done before deciding whether to even take our property to market or not?

ajaxgeezer

Can you sell after only 18 months under RTB (discounted?) conditions? I have a feeling there's a longer period you need to stay in the house, but could be wrong.

If you are ok to go ahead, a valuation is free. The estate agent does the valuation for you - you only pay the commission they quote when they sell.

As a seller your only costs are estate agents commission and also legal fees. My personal advice would be to go with a solicitor who charged you nothing if the sale fell through. In today's market with mortgage deals being pulled from under peoples' feet, that could save you a lot of money. This type of solicitor may quote a couple of hundred quid more, but it will insure you against losing £700 if a buyer pulls out for any reason.

EDIT: This was the case a year ago. I don't know anything about the cost of HIPs or how agents charge for HIPs.

EDIT AGAIN: Estate agents' fees are not set in stone, they are the agents starting point. You have the right to negotiate if you want to.

Optikal

Hi Ajax.

Yes, i can sell, but i'm legally obliged to pay back the council a portion of the discount
i recieved upon purchase. Currently that stands at 80% of 21,000 and decreases by 20% each subsequent year of occupancy.

Initially i wanted to get this house on a BTL for a few years, but i struggle to see why anyone would CHOOSE to live here now aside from the usual DSS tenants etc.

Personally, i'd happily rent in a nice area for a couple of years whilst we saved up a deposit for a nice big house. But the wife is insistant that she doesn't want to become a tenant again.

Would it be worth speaking to someone like London & Country for advice do you think?

ajaxgeezer

Sorry, I'm not familiar with anyone in the business as I'm not in the business, so can't really advise who to speak to, other than "a professional".

I hear what your wife is saying, and girls do like to 'nest' but if you could make profit on letting it then the market is hardly gonna run away from you in the next year or two is it? If you can cash in on one of those DSS tenants and their 'guaranteed income' then it may be a winner. My personal opinion is that DSS tenants are like the little girl with the curl - when they are good they are very very good, but when they are bad they are horrid. Depends how good a judge of character you are really, I guess Some BTL lenders won't allow DSS tenants, so bear that in mind before you pick a product. One of the experts on here will be able to put you right.

Optikal

I certainly hope so! Thanks for your input Ajax

Optikal

Bumping for further help...

We've worked out that if we sell now, we'd currently be looking for a market sale of around £82000 - £84000.

That's including:

Mortgage: £56000
ERC: £3,351
Fees (to Mortgage Company): £185
Discount Repayment (80% of £21450): £17160
Secured Loan: £5000

= £81696

Now, the last two houses to sell on our street (exactly the same spec) went for £84000, but that was last year. So, with all that taken into account, we'd realistically hope for between £74000 and £84000.

Now, we're not overly concerned about making a significant profit, the most important thing is not to make a loss. So we were considering either a BTL or to Sub-Let it. The thing is... we're not entirely sure on either.

So, does anyone have any advice or help they can offer regarding any of our possible options? All opinions and advice are greatly appreciated!

ncooper1974

ajaxgeezer wrote: »

EDIT AGAIN: Estate agents' fees are not set in stone, they are the agents starting point. You have the right to negotiate if you want to.

I strongly suggest you negogiate regardless! EAs are no different to 2nd hand car salesmen. Most expect to be knocked down, and their commision is no different. Besides, if you dont ask, you dont get.

moneysavinmonkey

I don't know anything about RTB schemes, but given the general principles I would be very surprised if you would be allowed to rent your property out during the discount tie-in period... perhaps check your paperwork?

moneysavinmonkey

Mortgage: £56000
ERC: £3,351
Fees (to Mortgage Company): £185
Discount Repayment (80% of £21450): £17160
Secured Loan: £5000
Selling fees (to estate agent) : £1000+
Moving costs : £200+
Buying + selling legal fees (to Solicitor) : £500+
= £83196


Now, the last two houses to sell on our street (exactly the same spec) went for £84000, but that was last year. So, with all that taken into account, we'd realistically hope for between £74000 and £84000. :eek:

Where abouts in the country are you? House prices have generally been falling since last year but some places have fared better than others.

I see you have an ERC on your mortgage... is it not possible to port your mortgage to the new house to avoid this?? If not then surely you will need to include new arrangement fees for the next mortgage as well?

Do you have a deposit to put down on the new house as it doesn't look like you will walk away with much equity from your current house?

Optikal

We're in Leeds, and looking at the market, house and rental prices on the lower end of the market don't seem to have changed very much. The biggest changes seem to have hit the £150,000+ sales on all of my local agents sites.

No deposit to put down unfortunately. When we first applied to RTB in Feb 2006, the equity on this house was supposed to pay for a deposit on a bigger one when our kids were a bit older. Unfortunately, we feel that for quality of life, we have to move sooner than we intended.

As for porting the mortgage, i'm not sure what that is? This was our first ever buy and were fleeced by one of those ever so helpful £3000 Right To Buy companies. If anyone could explain how 'porting' a mortgage works, i'd appreciate it.

EDIT: Our RTB broker told us that it's possible to BTL after inhabiting for a year after purchase.

MissEyre

Porting a mortgage is just taking the arrangement you have with your mortgage lender to your next place, so you save the early repayment charge. At least that's what I did with mine when I moved, and I think the building society called it porting