Is this a good or a bad time to sell? Is there a "season" for selling? I've been thinking about it and I have mixed feelings about it, not helped by mixed reports in the media. I am unemployed and have considered cashing in on my considerable equity and buying somewhere cheap abroad. On the other hand prices seem to be rising at the moment and it may be worth struggling through a bit longer, and if I reach 39 weeks the interest on my mortgage should be paid by the state, or I may even be able to get another job. Then there's the interest rate - now people are saying its next movement will be upwards whereas before it was thought that it may go as low as 3%. How does that affect matters?
I'm viewing it as a good time to sell in South London. You didn't say where you currently own property - the state of the market is pretty dependant upon locality right now. Have a look at the free postcode bases reports on
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for the trends in your area.
I don't believe the media-hype about "prices going up another 20%", neither do I expect a full-on crash next month(!). So my opinion is that prices have probably topped out, but interest rates are low, so it's still easy to sell quickly.
In my case, the not-too-bad positive equity is going to be used to generate some income to offset the rent on my new place (yeah - I'm not buying anything for a while). I'll keep my capital to:
a) Use as deposit on buying a place if prices get more sensible. b) Start a business. c) Move abroad and do (b)
A friend of mine did something similar to what you are planning - sold his house and set up in France, buying an old house to do up and rent out as holiday accomodation. He even became voluntarily unemployed to do it.
Short term view:
August is a quiet month for buying/selling but September is when the market gets going again. The market will probably quieten down either in November or early December for Christmas. So as far as time of the year goes, now is a pretty good time to go to market.
Now as for interest rates - who can tell. I think they will stay low for the immediate future. But there's an election due in 2006 or earlier and whoever gets in may have a big effect on this. Gordon Brown has become regarded as a "safe pair of hands" on the economy by many - change the Chancellor and/or the party in charge and anything could happen.
Seasonally, September/October and march/April/May, are the times of year when we sell most houses.
However, your question is not really a seasonal one is it? You are asking if prices will continue to rise, and what will interest rates do.
If you keep waiting for the top of the market, you will sell when prices are falling, assuming that they do. A profit isnt a profit until you take it, and you could easily miss it. If selling now, for the money you can get, solves your problems and meets your goal, then now is the best time to sell. If you cant afford to take a risk with interest rates, then now is the best time to sell.
I am based in Clevedon, which is on the west coast one M4 junction south of Bristol. I do not think housing in this area depends much on employment or industry, so I think any rises or falls in the price are going to be attenuated in any case. Although I am unemployed there is no immediate problem in making mortgage payments. I considered remortgaging as buy-to-let, letting out my current property, and living abroad, but the rental income would probably not be much more than the mortgage payments so I rather abandoned that idea. I could possibly get my father to act as guarantor for a remortgage and then buy the other house abroad. This would keep my options open for a little longer but I would probably end up selling anyway and then I have arrangement fees and redemption penalties to contend with. Also if I sold I could possibly buy two places and use the other for rent.
If you own 2 houses outright, one of which generates an income, and you are not working, that is almost as good as it gets! Retired!!
Guessing that you might not be able to live on the income completely, at least you dont have to earn as much/work as hard as if you had no house, (renting), and no income.
Sounds like you are on your way to most peoples dream.
OK, let's suppose that I sell and use the money from the sale to buy another property outright ( abroad ). Is there any way to eliminate the gap inbetween where I am basically homeless ( I guess I would have to put my stuff into self-storage and live in rented accommodation for a while )? It would be so much easier if I could buy my next property first, but the only way I can see to raise that kind of capital before selling is to remortgage with my parents acting as guarantors. It does not seem worthwhile to me to remortgage shortly before selling. Is there normally any gap between getting the money from a sale and actually vacating the property?
I would suggest that you dont sweat the small stuff - renting for 6 months would seem to be neither here, nor there, in the scheme of things. If you rent unfurnished, your home is where you store the stuff.
What are the pros and cons of selling it myself against using an estate agent? By the way, I have had 3 separate valuations, 1 for £130,000, 1 for £135,00, and 1 for £140,000. The obvious temptation is to go for the highest valuation. The agent reckoned he could get £137,000 for it. Does this follow, considering that other agents in the same area are presumably selling comparable properties for less?
Pick up sales brochures, look at the outside of the houses, if vacant, peek through the windows. When picking up brochures, get into a chat and ask if anything has sold locally, and for how much. In fact, they will probably tell you that some of those you are asking about have sold, so you can easily ask how much for - some will tell you, some may not.
This is probably the best you can do, but it will give you a flavour of your own property value.
It has taken me 16 years of visiting houses, selling them, researching other property sales etc. to be able to do my job, so you cant expect to be perfect, but at least you will get a picture of who is being straight with you.
In real terms, at the £130/£140K level, the £10K difference in asking price is not particularly significant. The agents are actually trying to predict the near future, and they could have differing opinions.
I would probably choose the agent I felt most comfortable with, and ask him to set an asking price at a level i wanted, (after the research), rather than his own suggestion.
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