Opinions on how our house sale is going

[LittlePickleHead]

I'd just like to know whether our attempt to sell our flat is faltering, or if we should stick at it. I'm starting to get disillusioned but there are a few reasons for that

We are trying to sell a 2 bed garden flat is SE London. We have now been on for exactly 3 weeks. We had 4 different agents round, who all gave us the same valuation of £280k to achieve upwards of £265k. I checked other properties and can see why they gave this valuation based on our area and size - similar properties in nicer roads are actually being sold for closer to £300k so it seemed reasonable. We signed up with the market leader, and at the last minute he said we should try £285k. I was wary as I know this puts it into a different search bracket on rightmove but he was very convincing so we did it.

Since going on the market we have had around 12 viewings, 1 second viewing, and two offers of £250k (which we can't afford to accept). Viewings are now slowing down - there was one tonight (no feedback as yet) but no more booked in. Feedback has been mostly positive, negatives have been too small (it's actually a good size, two double rooms and 16 foot lounge, all on the web so shouldn't be a surprise) and one person said that they didn't like it being in the basement, obviously not something we can change.

Not sure where to go from here. As the market is still quite fast moving in our area it was made clear that if we didn't get a sale within the first 5-6 weeks it would be very tough.

Since going on the market I've found out I'm pregnant so the move is getting more urgent as we already have DD aged 3 and we are really stuck for storage (we've decluttered for the viewings and most of it is with relatives at the moment to try and give the illusion of space).

I'm thinking we should change the price to oiro £275k in the hope we get more people through the door? In order to fund the move we can't accept anything less than £270k, possibly £265k at a push.

Is there hope? Should we keep going? Or take it off the market, do the few bits I'd still like to do (add a fireplace, some built in wardrobes in the bedroom and sort out a small damp problem (not apparent but will be picked up in a survey) and then try again the spring with a lower initial asking price and hope we have more luck?

All opinions very gratefully received :)

Property - I actually did this prior to the photos and took on board some advice about clearing some of the obvious signs of a small child, and decluttering the kitchen. Since then we have had a few friends round and they have all said 'its lovely, it'll be snapped up' haha!

I think we are now going to wait two more weeks, but tell the agents that it nothing positive happens in that time then we will remove it from the market. We'll then do the bits of work and save like mad and try again next year, hopefully the extra savings will give us more leeway if we do still only get offers at £250k

One thing you can do to sneak an extra few quid out of people is to offer to pay the stamp duty yourself.

This might tempt people into parting with a bit more of their cash knowing that it is all going on the house and not going to the exchequer.

i.e you might get offers of for example 260k which will net you 252k (before agents fees etc)

You never know, you might even get higher offers if people think that they're getting good value by not having to pay stamp duty.

At the moment though, it seems that people are only too aware of the 250k threshold; take it away from them and you might get somewhere.

Is that legal though? I read on the other thread linked to here that it is dodgy and could cause trouble if its picked up by the tax man?

No, its fine...its just you paying the tax, not the buyer.

I did it 3 years ago on the last property I sold...sneaked an extra 6k above the threshold that I simply wouldn't have got if I hadn't paid the extra.

What happens in practice is that you come to the agreed figure and work backwards...they still actually send the cheque off but it comes off the fiure you've agreed.

Ask you estate agent about it...the idea came from my estate agent when I was selling.

It's not dodgy and is a good idea.

Basically the issue for many buyers at that level is that they don't have enough cash to fund a deposit AND 3% stamp duty. They can get a big enough mortgage to make an offer above £250k but they wouldn't have enough cash at completion to pay the stamp duty. Mortgage company won't lend them money to pay stamp duty, it will only lend them money to buy the house itself.

So, IF you have the cash, you can offer to pay the stamp duty which makes their life easier as they only have to find the cash to cover the deposit. Then mortage lender will lend them the rest of the purchase price, even if it's a higher purchase price (assuming survey says it's worth that much).

Hope that makes sense.

One question: you say properties nearby are selling for 280-300. Do you know they are actually selling for this amount, or are they just asking this amount? Big difference...

I'll definitely speak to the agent a I know one of the couples that offered did have a problem with the cash for stamp duty.

I know that a couple of properties have definitely sold for those prices, some were a few months ago and the price are on mouseprice, and I guess we just have to trust the agent on the more recent ones. Bit gutting what a difference a few streets away can make!
Anyway perhaps it's too late now. We have no more viewings booked in, and the agents have been crap about getting back to us on mondays viewing when normally they give us feedback unprompted.

Hmm it sounds like perhaps you need a new keen agent (once you're able to ditch this one) especially since they basically told you there was no hope after 5-6 weeks which frankly I think is crap of them, really what they mean is they can't be arsed any more after that long.

Perhaps hint to the agent that you are thinking of switching and see if they buck up?

By the way, if you do use the stamp duty wheeze, what you mustn't do is overstate the sale price in the sale agreement. For example, the agreement needs to say eg "£273k sale price and seller to pay stamp duty of £8k". It shouldn't say "sale price £281k" and then you just give them a cheque for the £8k. The latter could be facilitating mortgage fraud if the buyer tried to borrow a mortgage for a sale price of 281 if actually they are only paying you a price of 273.

I have no real advice on the saleability of the flat, but just wanted to say that if you have a DD who is 3, will she be starting school next September? If so, you'll need to be within catchment of the school you want her to go to relatively soon (certainly before next spring - in our LEA, the closing date for next Sept is January 31st). Only make the point as that might influence your decision. Good luck.

Just on the issue of offering to pay stamp duty... It's not as great as it sounds. We've investigated this recently and mortgage lenders consider the seller paying stamp duty as being a discount on the house, so will lower the valuation of the house accordingly.

That means if your potential buyers are close to the line with percentage ratios to get a mortgage, it doesn't help.

Very simplified example where the maximum loan to value for the mortgage is 85%:

Buyers have £40k cash for stamp duty/deposit
Mortgage agreed in principle for £230k (85% of a house worth £270k)
Buyers offer £270k on the house if seller pays £5k stamp duty
Bank treats seller paying the £5k stamp duty as a discount
Bank values house at £265k accordingly
Mortgage given is for £225k (85% of a house worth £265k)
Buyers are 5K short of the agreed £270k - same as they would be if they paid the £5k stamp duty themselves.

Hope that makes sense!

Spirael I don't get that. First, surely the valuation for the purpose of the mortgage is meant to determine whether or not the mortgage company will recover the mortgage monies if it has to repossess and sell. So if as a matter of market reality the "value" is £270 then why should it make any difference that the seller has effectively agreed to sell for "a discount"?

Second, the SDLT on £270k wld be £8,100 wouldn't it?

The numbers I fudged to be very rounded, just to give a relatively simple example. If anyone calculates them, then the 85%'s aren't the exact numbers either.

And this explains it better: "Where an incentive is being offered as part of the property purchase, then the maximum loan is based upon the net purchase price (after deduction of the incentive). Any incentive offered by the vendor is deducted from the purchase price before applying maximum LTV"

Offering to pay stamp duty counts as an incentive, unfortunately!

Unfortunately from my initial explorations into this I think you are right Spireal. It sounds like it could cause problems once a sale is agreed so I think we're not going to go this route.

And yes, we do have to apply for school for dd but we may just have to leave it to chance and then apply late if we do move too late - I'm not too hopeful of us being moved by mid jan now.

Just spoken to the agent who are obviously not keen for us to go off the market and said its about to get busy yada yada. Advise to drop to oiro £275k. They know we can't afford to take £250k at the moment as I said to him we can accept it if that's all we'll get, but we need 6 months to save the shortfall, so surely they must think we'll sell or why is it worth the effort?! It's confusing me. Mouseprice has revealed 8 2 bed flats have sold in our area for over £250 in the last year (obv that's only up to July) so maybe it still can happen?

Quick extra question - if you saw an 'offers in excess of' price would you still be likely to offer a lower amount? Or does it clearly show the bottom line?

I think offers in excess of is disregarded by many buyers. I know a house locally that was offers in excess of x and the actual sale price was £25k lower.