Posts Tagged ‘quick house sale’

A quick house sale example

September 21st, 2009

On the 7th September 2009 an enquiry was received from someone in desperate need to sell fast, they needed to raise over £100,000 in 8 days.  OK, maybe we should have called this a quick flat sale rather than quick house sale, anyway, the property was a flat in East Croydon on Lower Addiscombe Road.  The flat needed some refurbishment work but otherwise it was structurally sound.

Within 24 hours we were on site appraising the property, we made an offer of £100,000 there and then.  It was a cash offer to ensure we could complete very quickly.  The next step was to instruct solicitors, we had ours appointed the same day, the vendor solicitors were appointed on 8th September.  The conveyancing work then got into gear.

The next steps was to transfer the funds into our solicitor’s account so that they would be ready the moment the contracts were ready to exchange.  There was a slight hiccup along the way, mainly getting the vendor identity documents verified (always ensure these documents are submitted to your solicitor for verification at the beginning).

We avoided many of the usual question and answers exchanged between solicitors and shortened the land registry enquiries by taking out insurance against any adverse checks, this enabled the conveyancing to be completed in 5 working days, which is pretty good considering the slight delay on vendor identity documents. 

By the 14th September we were ready to exchange and complete, the £100,000 was transferred to the vendor solicitor the same day, and by 15th September the funds were transferred on from the vendor solicitor to the vendor.  Overall that was a very quick house sale, just 8 days from offer to funds in the vendor’s bank account.

There was quite a discount on this property, in fact over 30%, because of this risks were taken with the purchase, full searches, structural surveys, etc, were not undertaken, had these thrown up any serious issues the property discount could have turned into a loss.  With a more “normal” process of 4 to 6 weeks for completion a much higher price could have been paid as full surveys would have been carried out.

If this type of quick house sale sounds like it may be of benefit to you call RM Properties on 0800 8600 285.

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Quick House Sales

July 16th, 2009

The term “Quick House Sales” seems unrealistic to most people in the current property market, but the fact is it really can happen.  Most people use the traditional method of selling a property with an estate agent, they sign the letting agent’s contract, pay out for the HIP, then wait for a potential buyer to ring on their doorbell.  The reality is very few buyers ring on the door bell and when they do that is the last you see of them.

For a quick house sale it means selling to a private investor or company. They will buy fast, usually an offer is made within a few days and the purchase completed a few weeks later, which is great, but you would have to sell below the current property valuation. So what are the costs?

For a quick house sale in today’s market you would expect to receive an offer of between 20% and 30% below the current market valuation.  Investment buyers make the lower offers for several reasons; clearly they want to make a profit, however they also have to pay around 4% in financing fees, stamp duty and legal fees, totalling to around 5% to 6% of the purchase price.  Then they also factor in that prices are still falling (at time of writing), so add in another 10% to allow for this.  Overall that leaves about 5% profit, which is a lot of money, but then they are taking some risk.

Let’s compare this with an estate agent sale.  Around 2% + VAT commission, legal fees, HIP cost, and say 6 months to sell.  In that 6 months, based on current market conditions, let’s say prices fall by 3%, then there is the cost of mortgage interest, lets say 2% over 6 months.  Also any buyer in today’s market is going to want at least 5% off the asking price.  Overall the cost is going to be around 13% of the selling price. 

So by comparison selling to a property investor will have a net cost of 7% to 17% compared to a private sale via an estate agent.  This is still a lot of money, but once you have sold the property you can then take advantage of market conditions to get a discount on the property you are buying.

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Getting a mortgage

June 24th, 2009

Doing some research today on mortgages.  Overall there are some signs of improvement however the common theme amongst most lenders is that the lowest interest rates were for mortgages with low LTVs (loan to valuation).  For example the Woolwich at time of writing was offering a mortgage at just 3.24% but the LTV was 60%, in other words you need to find a 40% deposit to buy your house. 

Of course this is not of much help if your equity in a property has fallen to say 20% or so and you want to re-mortgage, in fact in the current market for many this is not an option.  Worse still for those in arrears who are either trying to re-mortgage (today its almost impossible) or taking a desperate action for a quick house sale rather than wait for repossession.

Overall it appears that with the shortage of credit the banks are building loan books (mortgages to the likes of you and me) with very low risk ratings, e.g. with a 60% LTV it is very very unlikely the bank will ever lose money should the property get repossessed.  This helps the banks improve their own risk ratings, and in the longer term it will help them improve overall availability of mortgages and place these within the reach of first time buyers.  Time will tell.

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Posted in Mortgages

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