Struggling to sell flat - what now?

[Wonderbug81]

I have a 2 bed flat on sale in London zone 4. Decent area, good transport links (bus, tube and train) and it's duplex which I did up to a high standard when I moved in. It's a duplex flat across two floors, 860 sq ft so generous rooms and it's a Victorian house conversion.

It went on sale in mid July at £450k on the advice of the agent, similar properties nearby etc. It had all 20 photos and a virtual video too.

We had one viewing.

I've spoken to the agent and he blamed it on a hot summer and the World Cup!

But it's not got better since. He is recommending £400k but that seems a huge jump down and leaves no leeway for price negotiation after survey etc.

Would welcome advice, not sure what price to drop to. I don't think the agent is great but then it's also a tough market.

And to add, only on the market a couple of months isn"t "struggling to sell" in this market, IMO.

It's always about the price at the end of the day, so you have to decide if you want to stick it out (for who knows how long?) at the current price and eventually have to drop the price, or drop the price now and get on with your life. Can I ask how there can be no service charge on a flat? Are there no common areas to be cleaned/heated? What happens when the roof needs repairs or the windows need painting,

Thank you, really useful context. Sounds like I need to manage my expectations. Yes upsizing (moving in with fiancè) and want to do it relatively quickly. May have to consider options in meantime.

Yes so the costs are shared when and if something needs to be done. The two flats are responsible for upkeep. Basically like a freehold. If there's a dispute it goes to the freeholder for a decision.

I’m looking on Rightmove at two-bed flat's in some parts of zone 4 North London with good travel links and the average price is roughly £400k. It was a mistake to have gone with £450k in this gloomy market so after a break reduce to £410K. Some agents will say anything to get as high commission as they can. Did you check how much comparable flats in your area sell for? Great there’s no service charges (why?) and is there anything that separates your flat from all the others out there in your area?

"Sell low, buy low"

Good advice.

I bought my flat 10 years ago and it's recently been valued as less than I paid for it, so it's not surprising that yours hasn't risen in 5 years. It's a shit market for flats. I want to sell to buy with my partner but he's in a flat too and we're just stuck. He bought his in the stamp duty break and is valued at around the same that he paid for it. We're also in a London borough. I can't see much changing in the foreseeable future with the glut of ex-rentals and 1/2/3 bed new builds in the area.

Yes, I went on the market in June this year, zone 3 London. Definitely get your listing changed to make it clear about the service fee, long lease and lack of ground rent. I was considering buying a flat at one point and just bypassed any that said ‘ask agent’ to those questions.

Why on earth would OP be wasting time running mortgage calculations? She has her own mortgage so knows roughly how much. And would have no idea how much deposit the potential buyer would have.

Yes so the costs are shared when and if something needs to be done. The two flats are responsible for upkeep. Basically like a freehold. If there's a dispute it goes to the freeholder for a decision.

^

This might be problematic. Why isn’t your Freeholder doing his/her job? You collect service charge on an annual basis to build up a reserve fund to pay for works. What happens if the roof needs replacing? You suddenly have to stump up thousands of pounds. Sorry but I wouldn’t consider buying your property for this reason.

I was looking at rentals in my area, and spotted that 2 flats that have been for sale recently are now advertized for rent.
I wouldn't even say the asking prices for sale was too ambitious, maybe just 3% (15-20K) more than I'd pay/recent sold prices for similar properties/area, and the school catchment is good.
Another flat I'm watching with interest just dropped 25K (5%), but the last flat was sold in the building for 25K less than this the new price.

But seeing this trend, I'm more inclined now to wait and buy a freehold.

Sounds an absolute ball-ache. And what happens if you fall out with your neighbours and that impacts? The freeholders really do have the leaseholders where they want them - just one more reason of a million to avoid buying a flat.

Its really not, thats just over 10%

If you dont grab the bull by the horns now - you could be trying to sell for much less than that next year. Interest rates are going to go up and stay up for a while I think. That will directly reduce property values further.

Or just stay put ?

2021 was the Covid peak and properties have dropped in value since then. I think you have been badly misled by Estate Agents telling you £450k is a reasonable price. While a property not selling isn't always a question of price, only getting 1 viewer in all this time is a pretty strong indication that your offer is not desirable in the current market. Have you looked at what else people can get in your area for the same price. If you're price is at a point where your flat is competing with houses, then you are always going to struggle.

You need to look at actual sold prices for comparable properties, not listing prices. And you need to resign yourself to the fact that nowadays you don't get your money back on renovations, and for a mid-priced London flat definitely not when it comes to what things like replastering and "high spec finishes" will have cost you. When comparing sold prices with other flats, try and look at dooer-uppers v fully done and see what that differential actually is.

Also look at whether comparable properties are selling at all. If there are very few sales at all in your area, then you may be in a position where it's not personal, but you just have to resign yourself to a long wait. If other stuff is selling then the problem is your flat - and if as you say it is all done up it only really leaves the price being out of whack for what you are selling.

If you've only had one viewing it suggests that there's something off-putting in the listing. Even if it's over-priced (and it sounds like it is), people will still view an appealing but over-priced property with a view to offering low.

You'll get much better advice if you share the listing.

Since 2001 interest rates have gone up a lot. And there has been a lot of turmoil in the market for flats because of things like cladding and onerous service charges/conditions.

So expecting to make £64K on the transaction is pretty ambitious ?

Houses really aren't that hard to value. You just have to look at what has sold recently in the area and make some slight adjustments if yours is better/worse.

I don't think the online tools for estimation of prices are always realistic.

But your flat hasn’t increased in value by £64k so reduce to a sensible figure and take what you can if you want to move on. You bought when the market was at its hottest - it was always going to cool.

Thanks for the messages. A few people have responded saying the price is unrealistic. Clearly for the market now it is unrealistic but when I put it on I spoke to three agents who took me through local sold prices and comparisons and said £450k. They know the market, they had the data and they could see the state of my flat (plus it's a duplex with considerable floor size which is unusual vs other flats).

It's been 7 weeks and it's not getting viewings so I know I need to cut hence my post.

Not really. The contracts say we have duties to share upkeep of the property. If there's an issue the freeholder intervenes (never been an issue).

No nebulous inflated service charge and a fallback in case of issues. I would say it's like having freehold but with the protection of a freeholder who can enforce costs when needed.

No, she bought the flat when mortgage costs were much lower, the head in the sand approach won"t work in this market, you need to know how much your potential buyer can afford and how much other similar flats are discounting prices because most buyers now are hyper focussed on how much their mortgage debt will cost them monthly, and they are all using price trackers like PropertyLog etc.

The only way to know the right price is when viewers start turning up, you should cut in 25k amounts, less just doesn"t get attention. None of my business but isn"t giving up your own flat to move in with someone a risk? Wouldn"t you be better letting it out?

It’s odd then that you’ve only had one viewing in two months if the flat is realistically priced? Has the market changed so drastically in such a short space of time? But in any case I wish you well either way your flat sale and onward purchase.

The thing with estate agents is that when they value their property they are also giving you a sales pitch. They want your business and the number one way they can get it is to promise they can get you a high price for your property. Very often they will value above what they realistically expect to get, and then once they've hooked you in, get you to start reducing the price to a point where they can actually make the sale. It's very standard practice and why it's generally a bad idea to go with the estate agent that offers the highest "value". Obviously in this case, they've all gone for the same over-value, but it's still not necessarily an honest appraisal.

Also if you are wanting to get this over and done with quickly, you need to specify that you want the valuation for a quick sale - inevitably getting shot quickly means putting it on at a "value" sort of price rather than trying to get the most you possibly can. That's where you need to figure out what is a priority for you - neither is wrong, but maximum price and quick sale are really an either/or rather than a both in our current market.

It might be worth getting an entirely new estate agent in to value based on a realistic appraisal of where you are - given that you've tried at 450 and had no bites, and there may be extra info that you didn't tell the original agents re urgency, it might just help you get to a realistic price for the specific property rather than just going with what feels comfortable as a "drop" from a price that no-one really knows how realistic it was in the first place.

Oh and just to add you really need to try and think in the overall cost to you of going through this - in the sense of stress, mortgage payments, inconvenience etc. It's easy to look at dropping price as "I'm losing 20k I thought I was getting" but if you spend a year having the worry and keeping the house neat for viewings and paying bills etc, maybe the fiance in rented accomodation, whatever the situation is for you, actually you can find it is actually worth it to you to not get that 20k and just get shot of the place.

How would OP know how much a buyer could afford? It could be a cash buyer buying a place for their child for all she knows.

Love the way you keep referring to a mortgage as ‘mortgage debt’. Is that supposed to be your way of psychologically influencing people to drop house prices.