Ways to sell a small letting business i.e., investment property.

So it does! Thank you! I'm surprised it didn't show up when I type in 'house' and hit 'enter' during the 'list your item' process.

I'm trying to make up my mind if £35 per every 10 days of listing would be a healthy situation. That's £105 a month. It would be great if it produced a buyer fairly quickly, but of course, there is no guarantee of that. I am running with a very tight budget, so paying out an extra £105 per month would be a problem at present, if it didn't produce a buyer quickly. I might be better off selling through someone who charges a commission payable on completion. It'll possibly cost more at the end of the day, but since they would be a professional seller, they might be able to secure a higher final price than I could. I will have chew it over.

J A

That's right. It seems pointless to take anything less than the highest price I can get, since I am not desparate to sell immediately. On the other hand, I don't want to hang around for 6 months, entertaining viewer after viewer (and having to tidy the place up before each). I'm not really sure how active the market is likely to be between now and early Summer, but I can perhaps run it through a few estate agents by then, lowering my price each month until it sells or something like that. That's the tactic I used when I sold my previous place, and it paid off; I exchanged contracts just before the market took a nose-dive. (Late 1980s). The market was actually turning as contracts were exchanged!

But that was a bog-standard 3-bed semi. I suspect it is harder to find a cash buyer for a property with sitting tenants - unless one sells at an obviously bargain price.

I'm just a bit wary of auctions, because there is a possibility it will sell for even less than an obviously bargain price - e.g., when the the few bidders present, don't fully realise the property's merits as an investment.

J A

Last time I looked into property auctions, scanning through their terms (about a year ago), I'm pretty sure it was the norm.

J A

I see what you are saying. However, I've noticed that buyers of any product in auctions can have widely differing assessments of an item's value. And with a limited number of bidders (as always seems the case) it's more likely that the interested bidders don't fully realise the property's potential.

Even looking in local estate agents' windows, I see one house with an asking price of £150k in one estate agent's window, then another place with almost identical specs, in the smae street, with an asking price of £200k. But other evidence has led me to believe that estate agents (who are supposedly professionals) can have very differing opinions of a property's realistic asking price.

So, wile I agree completely that an auction whould probably be the way to sell it ASAP if price was not much of a consideration, I think it might pay me to shop around in a wider market-place for a buyer who is willing to pay a better price.

I'm thinking of giving each of a few local estate agents a brief chance to sell it, just in case they have a cash buyer waiting for a local property like mine.

Last time I evaluated the place, converting it back into a 3-bed semi and selling it as such would have fetched me about £150k. Drawing up leases for each of the flats and selling them separately would have fetched me about £200k in total, after a £3 to £5 otlay. So buying the place at £150k means a realistic potential quick profit of about £50k, after doing about 3 or 4 weeks' work, costing about £3k to £5k.

So, with that in mind, what would you consider a realistic asking price, selling the place with assured shorthold tenants installed, to have a good chance of a close within 8 - 12 weeks, without selling myself short?

J A

It is usuallly in the contract that vendor can serve notice. So once exchange has taken place, that date (or the latest date) to get the dosh is fixed.

If there is a sitting tenant then the market is more limited. Investors are also less likely to pay over the odds, although I expect many may be able to move faster.

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Obviously.

Otherwise all investors would be like the ones on the telly.

tim

Think about it. If every Tom Dick or Harry could enter their property at auction for nothing, setting un unrealistically high reserve, just to see how high the bidding goes, don't you think they would?

Then you'd end up with 90% *not* selling, I'd wager. At the actual auction, I guess on average the same amount of time elapses to bid a house up to the level at which no further bids are made. So whether it then sells or not depends solely on the level of the reserve. If 90% of lots don't sell, as opposed to 90% do, the bloody auction is going to take ten times as long and these chancers are just wasting everyone's time.

The seller, of course. For each potential buyer which the advert reaches, there is only a small chance this person will do more than skim the ad. If they go further and read the particulars, there is a small chance they might take things further and arrange to view the actual property. Having done that there is a small chance they might take things further and ... you get the idea.

Therefore the chance of getting even one bidder is enhanced by reaching as many "first stage" potential buyers as possible. It also enhances the chance that there might be more than one bidder.

Nothing, but that's the wrong question. Had you reached more people, you might have gotten a nice bidding war going and achieved a higher price.

It won't override anything, but if you make an unconditional offer and it is unconditionally accepted, then contracts *have been* exchanged, so why should it not be binding? OK, there may be some doubt as to whether pressing an "I commit" button can truly give effect to a binding commitment, but then can the same not be said about any other items? If you bid on and win a £10 decorative flower pot, das *that* **really** create a binding sale? Not a signature in sight!

But I don't think you're really expected to bid for houses on ebay. It is accepted that property listings there are in effect no more than adverts intended to attract potential buyers and to encourage them to contact the seller directly and then to make whatever arrangements they want.

Further to this, it occurs to me that *if* bidding on a flower pot does in fact create a binding agreement to buy the item, then there is really no reason why bidding on real property should not do the same.

If statute prescribes certain hoops that must be jumped through to achieve a binding transfer of land, then pressing ebay buttons will not by itself achieve that [and neither, presumably, will bidding at a "proper" auction]. However, what the ebay buttons [and "proper" auction T&Cs] may achieve is to bind the parties to jumping through the statutory hoops.

That being the case, it would follow that forms of agreement other than resulting from an auction would also be able to create a binding commitment to a "quick" sale. Perhaps not binding in the sense that land will in fact be transferred, but at least in the sense that failure to do so will give grounds for a compensation suit.

That's not unreasonable. They are in it to make money and the sller does not have to sell. What is unreasonable is that they often charge a valuation fee just for looking at the property. Indeed, they may make most of their money from these fees. Avoid.

It's usual to set a reserve to avoid it going for too low a price.

You seem to have skipped over my caveat.

I agree.

But the solution is simple. If someone sets a reserve at the middle of the guide price, then they shouldn't have to pay if it doesn't reach that level.

ISTM that if this happens, the auctioneer has failed his duty of care to his client - either he has incorrectly valued the property or he has failed to market his auction to the correct type of buyer. Either way, he hasn't performed the contract correctly and doesn't deserve to be paid.

tim

Obviously.

But I assume that people who put houses up for sale on the likes of Ebay do it out of desperation, not because they expect a premimum price.

Under English law that haven't. Contract Exchange requires a written contract with specific terms in it to be exchanged.

That's because a verbal contract is enforcable for the purchase of a chattel, for the purchase of property it is not.

You seem to be making contradictory claims.

Either one uses Ebay for the sole purpose of making a quick sale, in which case the lack of 'visitors' is a problem. Or one uses it simply as (another) advertising channel, in which case the number of visitors is irrelevent.

tim

You are right. At the end of the auction you are presented with a piece of paper and told 'sign here'.

Now you have the binding contract.

It is not entirely impossible to back out between these steps. A small number of properties are sold to the 'under bidder' usually because the higher bidder's deposit funds aren't cleared.

tim

This is a scam.

It is not the actions of a genuine professional purchasor.

tim

No, I simply meant to explain *why* that's how it is.

Nah, that's too messy. More likely the auctioneer would refuse to handle a property which he has good reason to suspect might not reach the reserve.

I don't believe auctioneers actually value properties, they don't have time for that, and if they did, they would charge a separate fee for doing so. Their guide prices are just guesstimates based on scanty information about the property supplied by the vendor, and on experience of selling similar properties.

Mortgage Cos charge inflated valuation fees which are non-refundable and which you lose if the sale falls through.

A bit like Council Tax Valuations or Mortgage Valuations...

I believe the 'guide prices' are sometimes set low just to pull the punters in the door. The more people you get in the auction, the better the chance of a bidding war.

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Well, nobody expects premium prices at auctions except perhaps for things which are not normally sold other than at auctions (e.g. fine art).

Someone desperate might put a house up on ebay, but that doesn't mean someone who does is necessarily desperate. It's simply one additional marketing vehicle.

You mean oral. Written contracts are also verbal [they use words]. :-)

The key question is what acts an oral contract can commit its parties to. We know the transfer of a chattel is one such thing, and the transfer of property is not. But it's conceivable that an oral contract could commit its parties to the act of entering into a written contract, is it not?

Indeed, is not bidding at an auction a specific instance of just that? Isn't (in a nutshell) one of the T&Cs of attenting an auction that if you bid and win, you *must* 'sign here'?

On the contrary. The number of "visitors" to an advert is paramount to drumming up interest. The more people see the advert, the likelier it is that you will find a buyer.

You cannot say that you would use ebay either for purpose A or for purpose B. You could just as well be using it for purpose A or purpose B [the distinction being between exclusive or and inclusive or].