Selling House? Good time?

googlemyusername

Hi I have £64000 left to pay on my house, 2 estate agents reckon it's worth £210000 so I am thinking of selling it before prices go down the pooper and then rent for a while. Has anyone else done this recently?
Would a target of £200000 be possible given the current climate? Thanks Mike.

Trick

Its worth what someone will pay in this climate.
I recently put my house on the market after umming and arring about it since January, and with all the estate agents hassling me to do so.
Ive had 1 viewing and no offers.

My issue is that i need to move closer to work since i changed jobs about 4 weeks ago. But IF i do sell, i`ll rent for a 6 months and take advantage of the inevitable drop in market values.

However, also worth considering what mortgages will be around then...so might even be better to bag a mortgage now instead of waiting until after the market drop.

Its difficult to judge.

i recently viewed a property that was for sale at 236k, and it sold a week later - for 228k. had been on the market for 4 weeks.

The average sale price vs market price is around -5%, but depends on area really.

hope this gives you food for thought.

Rich

Nenen

Well... we have done it, although not deliberately because of the expected HPC but because we had to relocate for work and, having had two sales fall though, we decided (when we got another buyer but couldn't find anything we liked and could afford to buy in this area) that we'd rent for a while to put ourselves in a stronger position. As we were selling and buying anyway we haven't incurred too many extra costs. We were very fortunate in our timing (sold in March 2007) so a few months prior to all the recent market events and are now waiting with baited breath to see what will happen before we leap in again!

However, in your position you'd have to factor in all the extra fees you'd pay if you sold to rent and it would be a bit of a gamble as to whether house prices fall enough to make this really worthwhile... for example, you'd probably get stung for some (if not all) of the following:
EA fees (at least £2500 inc VAT if you manage to get them down to about 1%.... ours cost almost £4,300 at 1.75% which was the cheapest we could get them down to in our area)
Solicitors fees (selling and then buying) probably around another £1,000 (might be more if you have any abortive sales/purchases)
Stamp duty... if you bought another house for around £200,000 this would be £2,000
BS mortgage arrangement fees... can be up to £1000
survey fees... £500-£900 and you may incur these more than once if a prospective sale falls through
removal costs: we're allowing approx £1,000 each move so at least £2,000 (more if you get moved on by your LL and have to rent several different places while you wait to buy again)
Letting agents fees... and credit checks etc too... probably about £250 per let
Storage costs if any of your furniture has to go into storage... maybe about £50 per month
Looking at the above (and there might be other things I've forgotten) possibly you'd be looking at around selling to rent costing you around £10,000 :eek:

If you only have a £64,000 mortgage I'd take a rough guess you are paying about £5-600 per month. Depending upon the type of property you rent and the area you are in you may or may not be able to rent something similar for the same sort of money. In my area you need to pay at least £900 per month for a 3 bed semi (so potentially you could be about £3-400 per month worse off). :eek:

On the plus side, you can invest your equity ... assuming that would be about £130,000 you would probably get a monthly income of around £500 which you could use to offset your rent (all my figures are very rough guesses and you'd need to research thoroughly to find out what they would actually be) . You also don't have to pay for building insurance or maintenance costs for the house which can be a huge relief as well as a big saving! Selling to rent is cost effective for some people but it is very dependent upon the area you are living and the cost of renting etc.

Finally... and this is the killer for me.... you have to think of the emotional costs... when you've been used to owning your own home it can be quite difficult to be living somewhere you can't decorate to your taste, put pictures/shelves up where you want etc etc etc. Worst of all you have very little security, most tenancies are 6 month ASTs and then two months notice so you might have to keep moving. Depending upon your circumstances, if you have children etc this can be very disruptive and difficult. You might also have a difficult LL and have problems with getting repairs done etc and have to live with being 'inspected' on a regular basis. However, some people find they love the way the burden of home ownership is lifted from them and feel great about the freedom renting offers... it all depends upon your circumstances and personality!

If house prices only fall 10% then you'd be able to buy something similar to now for 20K less but it would probably have cost you around £10,000 and you'd have had all the stress of moving at least twice etc. If they stay the same and simply stagnate you'd be £10,000 down! :eek: However, if they drop 20%+ you'd save £40,000 when you buy again... so even with your £10,000 costs you'd be a lot better off.... you just need a crystal ball and a good accountant!

googlemyusername

I'm not sure how I thank you on that post Nenen but thats a great reply. I had 2 more estate agents around today and these 2 said £190000 rather than the first couple's £200000 so I'm thinking I may forget the whole idea and just get back to overpaying the mortgage. We spent £3000 on windows 2 years ago and £5000 on the kitchen last year. One of the estate agents was a really nice bloke which threw me, he said It's a bad time to sell and also said those damn HIP things are a waste of money as no one ever looks at them!

googlemyusername

Found the thank button now