Two weeks ago, a country home in Dorset sold for £210,000 above its guide
price within minutes. How? It went to private auction. Seven of the 12
invited buyers gathered in the dining room of the 18th-century farmhouse in
Gussage All Saints, near Wimborne. All of them wanted to buy the red-brick
and flint property, set in nearly five acres of gardens and paddock, with
stables and a swimming pool, on the market for £1.25m.
The polished dining table was pushed up against the fireplace and the
auctioneer took up his position with his gavel. The rest of the room filled
with rows of chairs gathered from all over the house, on which sat nervous
buyers - many willing to push their finances to the limit to get the
property. As the minutes ticked away towards noon, the tension mounted,
then, bong! The church clock next door struck 12 and the auctioneer rose.
“You could have cut the atmosphere with a knife,” says Jamie Hawksfield, who
sold the house following the death of his parents. “It was nerve-racking,
but we’re happy with the result. We’d had a lot of interest, so, when the
agent suggested a private auction, I thought, ‘What?’ But I said, ‘You’re
the expert, we’ll go with it.’ ” Only four of the seven parties invited made
a bid - the rest presumably realised early on that they couldn’t compete.
All four live locally - any City slickers looking for a country retreat were
left by the wayside this time. The underbid was £1.45m, the hammer price was
£1.46m.
It’s heady stuff - and, as a way of selling your property, it beats any other
method hands down in terms of excitement. In today’s market, moreover, it is
one of a handful of ways to more or less guarantee a quick sale - something
sellers across the country are increasingly desperate to achieve.
The number of unsold homes is building up, and anxious vendors - many of whom
have been trying to sell for the past year in the wake of the collapse of
Northern Rock and the credit crunch have seen the value of their homes
tumble and offers fall through.
Take Sue and Don Reed-Jones. The couple put their home, Grade II-listed,
four-bedroom Tump Cottage, near Avening, Gloucestershire, on the market last
September for £575,000. “It was right at the end of the summer, so we knew
it probably wasn’t going to sell over the winter,” admits Sue, 55. “Come
spring, when we thought things would pick up, we only had trickles of
interest. We reduced the price to £550,000, but that didn’t seem to have any
effect. So we put it on with other agents and reduced the price again, to
£525,000.”
This tactic seemed to work, and they found a buyer. Unfortunately, by the time
delays in the chain had been ironed out, the mortgage he had lined up was no
longer available. “We said that we couldn’t keep cutting the price, so he
had to drop out,” Sue says. “We’ve had to put it on the market again. We’d
love to sell it and fulfil our dream going to Malaysia, but all I can see is
that winter is coming again.”
They are not alone. Figures from the Land Registry suggest that the number of
transactions has fallen by as much as 80% over the past year. Henry Pryor,
the director of Housingexpert.net, estimates that the registry recorded
17,681 sales in June, compared to 105,000 in the same month last year.
According to research for The Sunday Times by the property website
Rightmove, 8.5% of houses - or nearly 65,000 properties - are still on the
market with the same agent as they were a year ago.
Even upmarket areas, which until now have withstood the worst of the property
downturn, are looking fragile. Savills estimates that the number of
transactions in London is down by 45% compared with this time last year.
According to Lucian Cook, its director of residential research, the rest of
the country has not been so badly hit, with transactions down by an average
20%. “The lower price bands tend to be more affected in the south, with the
under£500,000 and £500,000-£1m categories seeing the worst decline,” he says.
So, why the auction - and why not a public one? John Young, director of
Humberts’ Dorset office, in Blandford Forum, was the selling agent and
auctioneer. He explains that the only real difference between private and
public auctions is that the former are by invitation only. They are
sometimes held among family members or neighbours when there is land or
property that interested parties want enough to bid for. Until recently,
they were rare in other cases, but with the downturn in the market they are
increasingly being used to sell unique and highly desirable properties,
which often means those in the countryside.
“Last year, before the market turned, “sealed bids were common when you had
several ‘proceedable’ buyers,” Young says. “But they are not legally binding
and, in a flaky market, buyers get cold feet and pull out even after a
successful sealed bid. Private auctions are fair and transparent, and you
get closure - that’s attractive to both sellers and buyers in this market.”
The simple of art of selling a home has become complex and increasingly
fraught as transaction numbers tumble and prices continue to slide. Private
auctions may be making a comeback, but they are still unusual and, warns
Young, don’t suit everyone or every property. There are, however, other ways
for anxious sellers to ensure a quick - and binding - sale.
One of these is selling through a public auction. This can be a good way to
get rid of a property that needs modernising. Try www.allsop.co.uk
, www.savills.co.uk or www.a-r.co.uk
. Fees are usually about 1.5% of the property’s price, and there is a
catalogue charge of £300-£700. You will also need to pay a solicitor to
complete the sale.
If you want to go it alone, consider listing your property on the online
auction site eBay in the hope of catching bored office workers surfing the
web in their lunch hours - you might even spark a bidding war. To list a
property, you’ll be charged a flat fee of £35, which will keep it posted for
28 days. It’s not mandatory to give a reserve price, but set one just in
case.
Another option is to sell your home to a developer in a part exchange. You
negotiate an offer - usually about 90%-95% of the value, based on two or
three valuations - and the developer buys your house. Meanwhile, you move
into the developer’s newly completed property in your preferred location.
The advantage is that you can get out quickly and the deal is completed
within a month. On the down side, you will get a new-build, which could well
fall further in value.
What about buyers? If you are angling for a bargain and planning to wait, then
think again. Cook warns that, come next year, the potential bargains could
begin to dry up. “The more discretionary sellers will move out of the
market, and there will be low supply to match low demand, creating
stability,” he says.
“Buyers will head for quality, so, if you’re going to get the transaction
through, you need to be sure you’ve minimised the risks. People will buy the
best property they can in the price bracket they’re looking at. Even if you
have a great house, you might have to be prepared to accept a bit less for
it, but it’s more likely to sell.”
Additional reporting by Anna Mikhailova
Be your own house doctor
Having trouble selling? Try these tips to tempt half-hearted buyers into
making an offer.
Drop the price If your house has been languishing for a while, it
could well be that it’s too expensive. When you lower the price, you should
make the reduction significant. “You have to bring the property into a new
band of buyers,” says Ed Mead, director of Douglas & Gordon’s
office in Chelsea, southwest London. “If you have a property on at £595,000,
reducing it to £575,000 is going to do no good at all. You need to bring it
down to £550,000, which is in the range of people looking at the £500,000
market.” Be warned, though: go too low and your home could look so blighted
that it fails to attract any interest.
Be flexible “Try to accommodate your buyer and offer flexibility in
the sale,” says Christopher Bramwell, head of Savills’ office in Chiswick,
west London. “If that means delayed completions, or reducing the price
because work needs doing between exchange and completion, it’s worth it to
hold the deal together.”
Call in an expert House doctors are back and business is booming.
Indeed, it is probably the only area of the housing market that is seeing
growth. Even estate agents are paying for the service to clinch a deal –
and their commission.
“Recently, we helped a couple who were living with a small child in a
riverside flat in east London,” says Polly Maxwell, whose company, Milc (www.milcstyle.co.uk
), advises desperate sellers on strategies for selling their home in the
shortest time possible. “They had these two huge electric-blue sofas in a
really big open-plan reception room with windows looking out over the river.
When you walked in, all you saw were the sofas, and you didn’t notice the
view. We told them to put them into storage, then furnished the whole flat
in a contemporary style. It sold really quickly.” Prices for house doctors
vary - Maxwell charges from £175 for a one-day makeover, and suggests that
clients spend about 1% of a property’s asking price on smartening it up.
Home Stagers (www.homestagers.co.uk
), a nationwide agency, offers tailored consultations that cost £250 for a
two-hour visit, written report and proposed time scale for changes. The
company says that 60%-70% of the properties it handles sell within three
months.
Create a good first impression There are some things you can’t
influence, such as the location of your home or its proximity to the
gasworks, but there are other things you can. Start with the kerb appeal.
“Repaint the front door, fence and gate,” Maxwell says. “Tidy up your front
garden - pop out to the garden centre and buy some plants. Make sure the
doorbell works - people always forget that one.” Inside, keep it spotless -
kitchen and bathroom gleaming, with everything tidy. “I’ve seen places that
people were trying to sell with dirty underpants all over the place and
washing everywhere,” Maxwell says. “ You’d think it would be blatantly
obvious, but no. Don’t leave your washing-up piled in the sink. It’s just
the basics.”
Do a little DIY “Buyers don’t like to be faced with problems,” Maxwell
says. “A lot of people are quite lazy: they like to walk in and know they
don’t have to do much.” So, tighten the door handles, check your wiring and
paint those scruffy skirting boards. Maxwell also suggests changing the
handles on kitchen cupboards and replacing dull old taps in the bathroom
with shiny new ones.
Get the look “Switch all your lights on when showing someone around,
no matter what time of day it is, and place table lamps to get rid of dark
corners,” advises Maria Ford, creative director of Home Stagers. “It’s
important to try to give the impression of a show home.” She recommends
tactically placed artificial plants, which won’t need maintenance, and
adding mirrors to bring in light, especially in dark hallways.
Meet and greet Be there to meet prospective buyers. “People like to
have someone who knows the area, and you’ll be able to point out details and
create a nice atmosphere,” Ford says. Sellers will be able to receive
unfiltered feedback and gauge the market for themselves.
Lucy Denyer and Anna Mikhailova
