One In Four Brits Resent Estate Agent Fees And Plan To Move Online

Three-quarters of homeowners say they would ditch high street estate agents for cheaper online alternatives, according to a new survey.

One in four (27%) admitted their decision was driven by their resentment of being forced to pay the high commission fees associated with traditional agents, while 1 in 10 confessed they now lacked any trust in high street branches.

Online estate agents typically charge a one-off fee as little as £349 (+VAT), in comparison to the typical 1.5%+ charged by high street agents.

The national poll of 2,000 homeowners by My Online Estate Agent also found that over half of those surveyed (55%) sited saving money as the main reason for opting to go online, with one in four (27%) aware that selling online saved an average of £3,000 per home.

And it is not just the financial savings which are enticing sellers online, one in three (35%) believed their home would sell quicker using an online agent.

David Grundy, CEO of My Online Estate Agent confirmed this viewpoint:

“Online agents offer a slicker, more technology-led service, and by charging a fixed fee there is a strong commitment to providing a quick and professional service rather than waiting for a commission-led transaction.”

Nearly one in five (17%) said they plan to use online agents as they guarantee their properties will feature on both Rightmove and Zoopla. The recent launch of OnTheMarket means high street agents using the site can only advertise on one or the other, but not both.

David said: “Sellers are getting increasingly more aggravated by rising estate agents costs, which have collectively rose by more than £500m in the past two years, and so it’s no wonder they’re looking to sell online to save thousands, yet still receive a full and professional service. Using an online agent is the modern way to sell your house.

“And with OnTheMarket confusing homeowners even further about where their property will feature and what restrictions may apply, this spring seems the perfect time for the much anticipated and inevitable online estate agent boom to begin”.

To date, My Online Estate Agent has sold more than 1000 properties and has saved its customers more than £4m in total fees.

Online estate agents typically charge a one-off fee as little as £349 (+VAT). In comparison to the typical 1.5% (+VAT) charged by high street agents, the average individual seller could save approximately £2,900 by selling online. For more information visit www.myonlineestateagent.com.

April 2015 Property Trends from Rightmove

There is one major conclusion that can be drawn from the Rightmove April 2015 house price index – now is a great time to sell!

The index offers data and insights into the property market based on houses put up for sale over the previous month. In contrast to many other surveys which look at completions – such as Nationwide and Halifax – the Rightmove index gives a feel for seller behaviour.

Rightmove HPI April 2015 Key Comments

Rightmove’s latest data highlights a few points of interest:

  • Asking prices are at an all-time high – £286,000.
  • There remains a relatively small in number of new houses coming onto the market – 4% down on the prior year. Not quite the “slump” that Rightmove call it, but still important.
  • Buyer activity is at record levels, at least based on number of site visitors to Rightmove, so there is certainly demand out there.
  • The property bubble that is appearing will be a major challenge for the new government.

So why is now a great time to sell your home?

Based purely on the Rightmove analysis we are very much in a seller’s market. Prices are on the up, and there is a shortage of available properties. These two factors are combining to reduce the average period it is taking to sell – Rightmove have calculated this at 72 days, which accords with our experience at My Online Estate Agent.

In addition, mortgage rates remain very low, and will continue to be so for the foreseeable future. Fixed rate deals below 2.5% are commonly available, and few commentators expect a rate rise within the near term, so it is possible to plan for low mortgage costs for the next few years. This means that houses are more affordable, increasing the available population of buyers that might be attracted to your property.

“I’m waiting to sell, for further price rises …”

One question we are repeatedly asked at MOEA is whether waiting a bit longer may enable you to get an even better price for your property. This is certainly possible, and whilst the seller’s market remains the upward trend will continue. But, equally, nobody knows what is around the corner, so waiting and then trying to sell when there is suddenly a glut of properties could be counter-productive.

It is also worth remembering that summer is just around the corner, when housing activity stagnates, and a hung parliament could cause confusion. As such, there is no certainty on where the market will head over the next 6 months.

My advice for buying and selling this month

Nobody has a crystal ball to tell you where the market is heading. It is thus important to take decisions based on what you know now. If you are keen to get a good price, now is definitely a great time to sell, and you should get close to your asking price in a short period of time.

Of course, waiting may be the better strategy, but it could also be the wrong approach. The key question to ask is this – if you got close to a recommended asking price for your property, would you be happy? If the answer is yes, don’t worry about whether prices may go up, because nobody knows, and put your house for sale!

For more insights on Rightmove’s index, take a look at the full report here (pdf) and if you’re considering selling your property, be sure to check My Online Estate Agent’s fixed fee seller packages.

Rightmove

[Source: Rightmove Property Portal]

Four Ways to Kick Start The Housing Market

Estate agents warn targeted approach needed to bring momentum back to housing market.

A leading online estate agent has warned that the UK housing market will remain ‘subdued’ unless the new government introduces more targeted help for homeowners and those looking to get on the property ladder.

CEO of My Online Estate Agent, David Grundy, believes programmes aimed at getting university students onto the property ladder, helping homeowners in negative equity and incentivising the bank of mum and dad are the key to breathing life back into the market. In addition, incentivising refurbishment of empty properties will also contribute to the need for more housing stock.

David Grundy said: “The housing market is nervous in the run up to the general election and the biggest fear is that May’s result will leave us with a hung parliament. This uncertainty will reduce whatever little confidence there is amongst buyers to zero and could bring the market to a complete standstill.

“Improving economic confidence is critical to building the market, and a minority government or looming second election will worry anxious buyers even further.

“Nervousness amongst sellers means instructions are already considerably down on last year, and although it’s clear the government has been trying for some time to stimulate activity with Cash for Lending schemes, it is struggling to find any real ways to inject confidence back into the market with such a generalised approach. The recent Help to Buy ISA announcement is to be encouraged, but the impact of this is years in the future – it may encourage savings, but won’t benefit the housing market until the end of the next parliament when savings have been accumulated. “

Grundy believes that to see real momentum return, any new government needs to introduce tailored schemes aimed at specific groups of buyers. He said: “Trying to rely on a ‘one size fits all’ generic approach has had very little impact on the overall housing market. To achieve real results we need to start targeting the people who have the potential to really drive things forward.”

According to Grundy, these include:

Bank of Mum and Dad

Encouraging parents to assist their children by gifting them the money needed to buy their own property will not only help their children but is also good inheritance tax planning for parents

Grundy said: “If parents genuinely have the money to offer their children, especially without having to borrow or lend any of the sum, then giving the money to children should be sensible inheritance tax planning, and would stimulate the first-time buyer market. The financial cost of a first home deposit is often an affordable sum for parents, but of great benefit to children.

“Under present rules, this gift forms part of the parent’s inheritance tax for seven years. By removing this potential tax liability the government would incentivise parents to support their children. In reality, the lost inheritance tax is a very low amount, and far outweighed by the benefits of clear and focused government encouragement.”

Empty property refurbishment

Previous governments have provided financial support to demolish and rebuild derelict properties. However, there still remain a significant number of empty properties that are suitable for refurbishment, and can be targeted for social housing and areas in need of economic regeneration.

Various incentives to registered housebuilders and renovators could include:

  • Reduced purchase prices, if under local authority ownership.
  • VAT exemption on energy efficiency. There is a 5% VAT rate applied to certain “green” products, but this needs widening significantly, to include double-glazing, external wall insulation and energy management systems.
  • Stamp duty exemption for those buying such renovated properties.
  • National Insurance exemption on recruitment of local apprentices employed on refurbishment projects.

Although there is a need for government financial support, there are wider benefits to the local economy and will also stimulate the construction industry as well as the housing market, ensuring the financial cost has multiple benefits.

Students

Incentivise university and higher education students to get their foot on the property ladder by offering a two or three year moratorium on student loans when they take out a mortgage.

Grundy said: “Students are essential contributors to the UK economy and getting them on the property market early would be a significant step in the right direction. Thousands of graduates leave university each year with substantial debts to pay off, and this impacts their ability to take out a mortgage. It is clear that the student debt regime is not working, with a significant number never completely repaying the debt, and this needs to change.

“Offering assistance to ease this burden if they buy their own property could offer them a win-win solution and provide just the push they need to buy their first home. In essence, student loan repayments would be waived during the early years of a mortgage. This is the time when graduates are building their careers and are still at relatively low earning levels. By not having to fund student debt repayments they have more potential to fund a mortgage.

”Whilst there is a direct cost to the government of this scheme, it is essentially the same as if the student debt is written off later in an individual’s working life. Given this is increasingly common, the net impact to the taxpayer is minimal.”

Homeowners in negative equity

Thousands of UK homeowners are still in negative equity and don’t have the capital to put down a deposit to move. Whilst the financial burden of the mortgage may be manageable, given low interest rates, the ability to secure a new mortgage is a different story. It is now challenging, if not impossible, for buyers to get a 95% mortgage, meaning they are stuck in their current home unless they can save substantial sums or house prices rise.

Grundy believes introducing a new scheme could help homeowners raise a recommended 25% deposit to buy a new home. 5% would be put up by the homeowner and the other 20% provided by a second loan, but secured by a government sponsored insurance policy. The insurance policy would provide protection to the loan provider, with the one-off premium added to the value of the mortgage. In this way, mortgage providers can lend with sensible security levels, and the top-up provider has security from the insurance policy; from the individuals perspective the additional cost is spread over the life of the mortgage, so much more affordable.

All of this allows lenders to lend with confidence, and allows individuals to consider moving house, at no cost to the taxpayer.

Notes to Editors

MOEA is one of the UK’s leading and most established independent, online estate agencies – offering both Sales and Lettings services to property owners and landlords across the country.

It offers the same services offered by a typical high street estate agent, at a fraction of the cost and without compromising on reach – MOEA properties are advertised on all the major portals such as Rightmove and Zoopla.
The significantly lower prices are deliverable as the business does not have expensive property and ancillary costs. In addition, a focus on the use of technology allows operations to be delivered in a more efficient manner. Despite operating on a national basis, a country-wide network of property assessors ensures Sales instructions receive a local service.

Selling Property At Auction – What You Should Know First

With the rise in alternative and modern ways to sell your house – including online estate agents such as myonlineestateagent.com and DIY home listing services, there has been increased interest in use of auctions to sell properties. This blog looks at how property auctions work, and the pros and cons, answering the questions you may have about how to sell property at auction.

The property auction process

Most house sales use an estate agent to market a property, awaiting offers from prospective purchasers, and then agreeing terms that are acceptable to both parties. This can be a time-consuming and uncertain process. Using an auction process can work in a faster timescale, with the typical process as follows:

• The property is advertised as being sold at auction, on a given date.
• Ahead of this date potential buyers are given the opportunity to view the property and conduct surveys, legal searches etc.
• On the day of the auction the auctioneer will invite increasing bids for the property. If a reserve price is met or exceeded the highest bid wins.
• Immediately, the purchaser must sign a legally binding contract for purchase of the property, and pay a 10% deposit.
• Completion occurs within 28 days of the auction.

Specialist estate agents can be used to sell a property at auction. They will act in a similar way to normal estate agents, including providing an indication of value, and their charges are much the same, often around 2%. The specialist auctioneer may also require a fee for their services.

The advantages of selling property at auction

By far the biggest advantage of selling your house via an auction is time, and hence why auctions are most commonly used for vacant properties. The date of the auction is set in advance, usually only a few weeks from when marketing starts. Although a reserve price can be set (and hence it is not certain a sale will complete) the date for exchange and completion is known.

This is much quicker than a normal sale, where it can take months and sometimes years to agree an offer, and then more time to complete the conveyancing process.

The time advantage is why auctions have been popular with banks who have repossessed properties and want to realise cash to cover interest arrears. However, it can also be relevant in other circumstances, such as death or divorce, where there is a necessity to sell quickly.

The disadvantages of selling property at auction

If time is the biggest advantage, the flip side is value. By only giving a short period of time for potential buyers to conduct due diligence (remember, they sign contracts as soon as the auction is over, all surveys etc are done beforehand, at their cost) there is a commensurate reduction in the price you’ll expect to receive – 25-50% discounts are not uncommon!

Indeed, most people using auctions as a way to buy properties understand this fact, and set their price limits accordingly. To them, this seller disadvantage is to their advantage, and bargains can be had if you are prepared to take on the risks of buying at auction.

There is a middle-ground – closed-bid property auctions

If you are looking to sell a property quickly, but still believe there is potential to achieve a good price, then estate agents can conduct closed-bid auctions. The agent can market the property in the normal way, but making potential buyers aware that they are required to submit sealed bids for the property by a given date. The highest bid is accepted, and an accelerated process of survey and conveyancing is then entered into. At myonlineestateagent.com we have used this process a few times in London, where there has been high and competitive buyer interest.

If you are prepared to accept a lower price in return for a quick sale, then an estate agent can market a property in the normal way, but with a lower asking price and making it clear in the property description that you are seeking a quick sale. This will highlight to buyers that they could get a bargain, but without the discounts that are common through traditional property auctions. Online estate agents can be effective for this route, as their lower fees reduce the impact of a lower selling price and they are less concerned about the impact of pricing on their commissions.

Final thoughts

Closed-bid property auctions are possible, but only in certain circumstances. Otherwise, if you are looking to sell very quickly or have tight deadline you are working to then a normal auction process may work, but you have to accept that you will be selling at a significantly lower value.

For anyone considering selling property at auction for the first time, it’s worth attending a few auctions first, to see how the process works, and also speak to a few estate agents to see what price they could achieve within a quicker-than-normal speed. Don’t forget to include online estate agents in your research!