Brightsale

It’s very difficult to call the market right now, some analysts are predicting doom, doom and more doom, yet others are proclaiming this is the ideal time to buy!  Who should you believe?  It seems like there is a never ending stream of contradictory information populating the media.  So what should you do?

As self-serving as this might appear, my honest opinion is that this is a good time to buy.  There are plenty of properties on the market right now which are sensibly priced, and even taking into account the fair pricing there are vendors who are still willing to listen to offers and are open to negotiation.  

The point is, countless properties on BrightSale’s books are priced to sell, even considering this difficult market.  Even in these negative times this particular still property strikes me as great value for money.

So, don’t wait for the media to report an upturn in the fortunes of the housing market before you decide to buy!  At that point it’s likely the best deals (like the one above) will have gone.

Now is the best time to buy - but then I would say that - I am an estate agent with a vested interest in selling property !

But think about it, many of the signs are pointing towards now being the best time for you to negotiate the lowest price on the property you want to buy.

If you don’t buy now you might look back at this point in time in a few months and say I wish I’d agreed to buy sooner?  Why?  Well:

1. Vendors have spent all year reducing their asking prices.
2. The media have hammered the housing market and vendors expectations are at their lowest level for years.
3. There is increasing choice in the market place.
4. There is a backlog of people who want to buy, especially in the first time buyers market, but they are wondering when make their move - when they do vendors expectations will harden.
5. Savers cannot get a decent return on their money in the bank or building society
6. If property auctions are anything to go by the property market is a good choice and investors are returning in their droves.
7. Stocks and shares continue to be high risk because of their volatility, buy to let investors feel that prices have stabilised and risk has reduced to acceptable levels.
8. Interest rates are at their lowest level since the 1950’s.
9. New build housing construction has come to a standstill so there will be a shortage of supply when the buyers return.
10. Vendors are accepting offers below what are already very realistic asking prices because they can pass their loss on to the property they buy.
11. The cost of renting has become more expensive than servicing a mortgage on a comparable property
12. Buyers are in short supply at this time of year, increasing your chances of being able to buy at the right price now.

We are confused - and we don’t mean a super-annoying car insurance advert. We are confused because for about a year now we have been assured that high street estate agency fees have been rising. The story has been that it is much harder to sell properties at the moment (which can hardly be doubted) and that estate agents are now having to work much harder (bless them) and therefore the general public are only too happy to pay higher fees for the service. It is the last point that has always struck us as a little odd. We know that in the early 1990s house price recession agents’ fees did go up. In some well-heeled areas we know that some agents even got away with charging a ‘registration fee’ of up to £500 just to list a property, and then up to 3% commission on top of that. But times have changed a great deal since then. Competition from lower cost modern agencies such as BrightSale have changed the competitive landscape – and have surely made it much harder for high street agents to simply raise prices in the face of falling demand (which is all they are doing).

So it was almost with a sense of relief that we read yesterday of the major London agent Lauristons offering customers a chance to opt out of the traditional 2-3% (this is London remember) fee in return for a non-refundable up-front payment of £999. To us this looks like a desperate attempt to get some, ANY, cash flow into their business before the year end. If you cannot make money actually selling properties, try to make it by listing them instead.

But isn’t this just another sign of a business model that simply doesn’t work anymore? Most vendors in these hard pressed times are not going to be happy forking over £1,000 in cash with no guarantee whatsoever that a sale will be achieved. So although Lauristons’ move certainly worked as a PR stunt, it will do nothing to address the fundamental problems of traditional agency: bloated costs, ineffective technology, poor client service, excessive fees etc. But as the Director of the company concerned said: “the market is changing and the current economic climate means it probably won’t be the same in the future.” Amen to that!

As unusual as it might seem for us to link to a traditional estate agent twice in a week, I couldn’t help but comment on the latest blog post from the London estate agency Chard.

It seems that Chard really don’t like “for sale signs”, which in all honesty I find quite unusual, especially for a traditional estate agent. Here at BrightSale, despite our expertise of this new fangled internet thing we really value some of the traditional marketing methods, especially for sale signs.   We also think they have some evolution left in them, after-all they have remained pretty unchanged for decades. To let you into a little secret we even have some ideas in development on how to bring them into the 21st century.  On the whole though,  we don’t think the world is ready to say goodbye to boards just yet.

In the meantime though, what is your opinion on agency boards? Do you love them or loath them? Have your say in our poll to the right.

Admittedly and ashamedly, I’ve been quite quiet on the blog post front this month. The reason for this is that the birth of my first child, Lilly, occurred on the 31st August and as those of you that have experienced this life changing event will concur, I have been kind of busy for the past three weeks!

Being in my early thirties, children were appearing everywhere around me. The majority of my friends were having them and nights out were just deteriorating into conversations about nappy contents and first smiles/words/projectile vomits etc etc. I couldn’t understand what was happening, why was no one else interested in the latest vodka flavour, the cocktail shown on ‘Something for the Weekend’, and the latest ‘Wolf in sheep’s clothing’ by Audi? Until now, I had no idea.

I think the realisation is simple, times change, people change and priorities change. The friend that always had the Robert Carlyle ‘Begbie’ moment whenever he had too many to drink had suddenly become a calm doting father. The friend who seemed to know lots of men in Epsom when she drank was suddenly settling down with baby and its father. Its strange, but these are people I had never envisaged changing.

Now, I know your waiting for the tenuous estate agency link somewhere, and so as not to disappoint, here it comes. Agency is changing, the ‘New arrivals’ would be the internet, ourselves and some of the other online agencies that are appearing and the old friends changing their ways would be the Spicerhaart’s and Connells of this world, once stuck in their ways but now grasping the web with both hands. One London agent, Chard, even has a blog!

My concern however, is for that friend that never changes, he or she is still sitting in the corner of the local pub that you first drank in, single, lonely and probably living at home with mum. Compare them if you will to the agencies denying that anything is wrong or that technology is beneficial, until one day you walk past and they are boarded up, just like your unfortunate friend.

The news that the unfortunate new owners of Foxtons have called in NH Rothschild’s to perform a ‘strategic review’ of the business made us smile. They say that in the land of the blind the one eyed man is king. But in the land of estate agency, Jon Hunt appears to have had a telescope when everyone else was using a microscope.

Foxtons was bought (as everyone now knows) right at the top of the market by the private equity group BC Partners. How much insight BC Partners put into UK estate agency is not clear (their previous acquisitions were in healthcare and publishing), but one suspects that their vision was positively 20/20 compared with the two groups that put up the bulk of money: Bank of America and Mizuho, who between them lent BC £260 million to fund the purchase. We are certain that Rothschild are a top quality investment bank, but we wonder whether the venerable old firm is really the right person to advise on the future of estate agency in 2008.

So here is our offer… in April this year we wrote a report entitled (co-incidentally) The Future of Estate Agency(PDF) . We are prepared to let Foxton’s executives have a copy of it FREE, as an alternative to their multi-million pound ‘review’ by the blue-blooded bank. Our note sets out clearly how the branch-less online model works and how it delivers superior customer service at a price vendors judge to be fair and reasonable (i.e. a long way from Foxton’s 3% tariff).

With the money they save on the advice, Foxtons might even be able to fuel their minis for another few weeks…

We wouldn’t normally condone a flippant and pretty irreverent poll such as the Rat and Mouse’s ‘Which Property Celeb will go Bust first?’ - but given that people are rather depressed at the moment we thought a quick plug was justified to lighten the mood just a little. Some of the comments are quite funny (not the rude ones of course which we deplore). But we do agree that to some extent the ‘property expert’ community did have a small role in helping to whip up the hysteria at the top of the market and hence deserves a little playful ribbing as we slide the other side:

http://poll.pollcode.com/RALe_result

Enjoy.

In the current climate you would expect your agent to be marketing your property to the best of their abilities wouldn’t you?

Take a look at these then….

1 This is the lead photo that Knight Frank have for a property worth…wait for it!…£45,000,000!!

2 Benham and Reeves advertise this £2,350,000 detached house like this…

3 Are Eastons of Epsom a garage or an estate agent?

4 Surely J P & Brimlow of Manchester realise that prospective purchasers looking at this property can see just how long it has been for sale by the trees in the background?

Simple rules can make photos of properties so much better. No cars on the driveway, seasonally correct, no bins in front of the house and ideally a sunny day (admittedly not under the agents control, but they can always go back).

In this tricky market every effort has to be made to present properties in their best possible light. Your agent, if he/she is any good, will demand that the interior of your property is immaculate for every viewing.

You as the vendor must demand the same level of attention to detail from your agent when if comes to your details, floor plans and (in particular) your photos.

If you like this sort of thing, check out this bunch of photo howlers from our friends across the pond on the REagent blog.

The guys over at Zoomf also have some interesting thoughts on this subject along with one of the strangest property photographs I have ever seen!

“I got home last night and my wife demanded that we go somewhere expensive…so I took her to the petrol station.”

With national press and TV coverage bemoaning the state of the economy and specifically the housing market, it’s no wonder that the typical British trait of poking fun at ourselves in times of need begins to surface once more. All we are hearing is ‘house prices are falling’, ‘cost of living increasing’, ‘fuel bills to soar by 15%’. My point is that we know life does go on. We make these jokes to soften the blow because in reality people still need to buy houses and people still need to sell houses.

The trick is making the most of both what your property offers, and every opportunity that your agent provides you with be it an open house day, professional photography, floorplans, a specific advert for your property or just a For Sale board. Grasp them with both hands. Make sure your agent’s description focuses on the very things that made you buy the property, because you can be sure that if they attracted you to it, they will attract someone else to it.

In return though, and I think I speak for most of my competitors here, a simple request : Please, please prepare your house for viewings! With buyer activity limited, the buyers out there are not only thin on the ground but also very knowledgeable. Your home needs to stand out from its competitors and if you cannot do that by being cheaper than them, then you need to be better. Below are some general pointers that will make all the difference.

Kerb Appeal

The viewers pull up to the front of the property, open the car door and look around. If the neighbours have five foot high grass and old bathtubs/fridge-freezers/washing machines/car parts (delete as appropriate) in the front garden it really doesn’t help. Whilst I understand that you don’t have any control over what your neighbours do, a polite request or even a helping hand to clear any unwanted ‘rubbish’ wouldn’t go a miss. Now, your own front garden will of course not be in this state, but we need to go a couple of steps further. Firstly cut your lawn (stripes are nice, but not essential!), remove the bins from the front of the house. If you have a driveway nearly finished, finish it. If you have a driveway finished, clean it. No oil spills and a quick weed will go down a storm. The percentage of purchasers whose first request when registering with agents is ‘off street parking a must’ is phenomenal, it saves money on car insurance and is hugely convenient, so as they say, if you’ve got it, flaunt it.

Tidy up

Rooms look larger and more inviting when they are neat and uncluttered. Put clothes away and close cupboard and wardrobe doors, make the beds, do the washing up, clean the sink and remove any limescale from taps. Kitchen work surfaces should be clear, make sure bathrooms are clean and toilet seats are down. Remember that the presentation of your kitchen and bathroom are very often key to leaving that good impression. If you have an extractor fan with a light, use it! Light up the glistening hob beneath, if you have under cupboard lighting use it also, sometimes in preference to your main kitchen lighting. Your home should look warm and cosy both inside and out. Replace any dead bulbs, open the windows, (even for a few minutes – to get rid of any cooking or pet odours). If it’s winter, make sure your home feels warm. Empty the kitchen bin, make sure the windows are clean inside and out, turn off the TV and put the radio on softly and tidy away any children’s toys you have. Control pets as much as possible, for instance people who don’t like dogs can be really put off a house by an aggressive loud barking dog.

During the Viewing

While people are viewing your property, you have an opportunity to find out what’s important to them. Listen for clues and, where possible, tell them about the features of your home and the neighbourhood that you think would appeal to them or are relevant. There is no point in bringing to their attention the excellent pub 100 yds down the road that has live music every night if that is not what they are looking for. Once you have told them everything you think is useful, let them look round the property again on their own so that they can gather their own thoughts and impressions. Ask them what your agent was like setting up the viewing. Was he or she helpful and informative? Did he/she really ‘sell’ your property. This will give you an excellent insight in to how your property is being marketed.

Conclusion

Contrary to popular belief, the market isn’t Dead. There will still be more than 600,000 homes sold this year even under the very worst case scenarios; and there is no reason why yours shouldn’t be one of them.
As the Scouts say ‘Be prepared’, and as Henry Ward Beecher said, ‘The difference between perseverance and obstinacy is: that one comes from a strong will, and the other from a strong won’t.’
You will sell your property if the price is right and you have prepared properly.