Move 2 You

In the last post we started to look at the housing market and how we feel more secure by following the commonly accepted wisdom of the ‘the market’

One of the causes of our inclination to follow the herd when it comes to the housing market is the way we think about the market.

In previous posts we’ve discussed the concept of the “Housing Ladder”.

We strive (or we’re told we should strive!) to climb it – bigger and better. We invest so much time, effort, money and worry trying climb the ladder by moving to larger more expensive houses and by capitalising on the price increases we have enjoyed in our homes.

But the problem about thinking of the market as a ladder is that it leads to us becoming fixated on what is happening to house prices. We worry about them. And this is the reason why we can’t help reading about house prices, talking about house prices.

But should we be as fixated on house prices as we are?

Doesn’t our fixation on prices work against us, particularly when prices are not shooting upwards, by paralysing us with fear?

Think about it.

If prices rise we feel good about it and we are keen to make a move up to the next rung. Buyers are easy to come by and all is good.

But when prices fall or stagnate the story is different. Nobody wants to move, worried that they won’t make as much on their property as they feel they ought to or could have done a few months back.

And if everyone acts in this way the market grinds to a halt.

But what if we think about the market as an escalator and not a ladder?

Those of us that are home owners should think of ourselves as being on the Housing Escalator rather than the Housing Ladder. This escalator can move upwards or downwards in its own right carrying everyone with it.

In other words when house prices move up they move up for everyone – ie the escalator moves upwards taking us with it. And when prices fall they fall for everyone – ie the escalator moves downwards. But relative to each other we all move together.

And this is the really key point here; everyone is moving together on this great big housing escalator and because price rises or falls are all happening to us all we are all keeping our positions on the escalator. And unless you want to get off the escalator completely this should give us all some sort of comfort in uncertain times.

Now that we have challenged our view of the housing market we also need to look at how we make our move up and down the escalator; ie how we sell and buy property.

Selling a house in the UK property market can be an extremely frustrating process as too many people know only too well. But more than that it is a very hit and miss process as well.

Worse still it it’s been this way for a long time and if we all continue to act in a herd-like way it will be this way for a long time to come.

It is like a conspiracy and no-one wants it to change. The Estate Agents generally do just fine the way things are (ok it’s a bit tough for them at the moment), the solicitors do ok, the government collects its taxes and we, the home owners, well we just plod along selling our houses in the same old way.

Think about it – as a seller you are completely reliant on a buyer chancing upon your property amongst all the others that are out there.

So even before the pain of the move has started (i.e. the saga of the negotiation, the surveys , hoping the chain won’t collapse, exchanging contracts and all the rest of it) you are leaving your house sale completely in the hands of fate!

i.e Will the right buyer actually find my property or not?

The way the market works at the moment, if you’re selling you just sit there passively and wait for someone to come and make you an offer!

But what is to say that buyers will find your property amongst all the others? The answer is that it is largely luck. You are being what we call an Accidental Seller.

Think about it; all the houses on the market are being advertised and promoted in much the same way. There is nothing to make any one of them stand out from the others.

What does this matter you say? Houses get sold so surely things must work ok?

Well maybe when the market is buoyant. But what about when things are not so good?

Yes we all use estate agents, but they are passive as well. Sure they will advertise your property in their window, produce a nice brochure and ensure your home ends up on one of the property websites, but all of this is still the same old game – it is waiting for a buyer to take action and to find your property in and amongst all the others they and every other estate agent have on their books.

As sellers we need to think of the market in a different way and more importantly ACT in a different way.

And by this we mean:

• You need to access as many potential buyers as possible and not just those that are actively searching for property at that moment in time but also those who are interested but not active in the market.
• You have to work out from all those potential buyers which ones are more likely to be interested in buying your property.
• You need to begin a conversation with this group of more likely buyers in an attempt to persuade them to make an offer on your home.

If you can do all of these things then you really are becoming proactive and taking control and as such you are much more likely to sell your house.

There is no other topic more guaranteed to get people talking in this country than what is happening to house prices; ok maybe the weather.

When the market moves in the right direction we feel good and we feel more wealthy. And when prices fall like they have done over the last year or so we worry a lot about what the consequences might be and we feel harder up.

It’s in the DNA of the nation. We are a nation of home owners and where we live and what we do with our houses tells others a lot about who we are. We add decking to our gardens, we carry out loft extensions, we knock down walls, build conservatories, our home is an integral part of the lifestyles we lead. It matters to us.

On the one hand just take a look at the TV schedule in an average week. Even now with all the turmoil in the economy there are programmes on every day about people buying and selling houses or developing properties or doing properties up …. if there is an angle on the housing market then there is a programme being made about it.

And on the other hand in the broader press we have been hit with so many stories over the last year about about how much money we are losing on our houses.

Why is this?

Because we read it! We lap it up!

And what do you think is the effect of these headlines on the average man in the street, with a house and a mortgage?

Well it makes us worried doesn’t it? Of course it does. That’s because it is a natural reaction to hearing bad news. But more than that, we start to hesitate about what we should do with our homes. Those of us that want to move put plans on hold, deciding to see what happens to prices before committing to a move.

And this becomes a self fulfilling prophecy and this is where we have been in the last 12 months or so. We are told that house prices are going to fall, so fewer of us are in the market for a new house – i.e. demand falls and guess what – prices fall to compensate.

Now clearly there have been some real problems in the market, no-one can deny that. We have seen for example a massive reduction in availability of finance due to the credit crunch.

But even with this the doom and gloom that is spread just adds to our woes. We develop a “herd mentality”. We feel safe if we act as a group – it is an instinct that goes back as long as we have been walking the face of this earth. If everyone else is doing something then it must be the right thing to do.

Can you see how much of what we do is all about psychology? Our mind drives our actions and if everyone feels bad about the market we feel bad about it as well.

Sometimes the right thing to do is to ignore the widely held belief, to take some control back and to act in your own best interests based upon your own individual circumstances.

What is the market after all?

It is just a collection of individuals buying and selling. So if you want to sell your home and you do manage to find a buyer who will offer you the price you want would you still sit tight and refuse to act just because that was the perceived right thing to do?

Of course not.

That’s all for now but check back here soon for more about why the way we see the housing market is all wrong.

In a previous article posted here we’ve talked about the “Housing Ladder”, and how we should really think about it as a “Housing Escalator” – an idea that opens you up to a different way of thinking about what opportunities really exist for you to move house.

But whatever you call it – ladder or escalator – there’s one key ingredient to make the whole thing work. It’s the person who should be everyone’s best friend … the First Time Buyer (FTB).

And right now the Housing Ladder looks less like a ladder, and more like a Well Fortified Castle with the Drawbridge pulled fully upright and firmly shut!

Why’s that then? (we’re just about to tell you.)

And can we help? (hint: answer’s yes – read on to find out how.)

First, let’s look at why FTB’s are finding it so hard right now. Think back to the nineties and early “naughties” – in those times house prices were rising steadily … and so were people’s pay. So lenders could be sensible, and use “multiples of income” to be confident that you’d be able to repay your mortgage.

Multiples of 2.5x – 3x income were commonplace, weren’t they?

But then the craziness started … house prices were shooting up like there was no tomorrow (turned out they were sort of right after all – eventually there was no tomorrow!) … but pay didn’t shoot up in the same way.

The result? House prices started becoming genuinely more expensive … for everyone. Especially for FTBs.

But … banks needed to keep lending … otherwise their income dried up. And they really didn’t want that to happen … not when there was so much money to be made. So they became more cavalier with their lending.

We started to see multiples of 4x … 5x … even 7x earnings.

And that’s if you bothered to tell them your earnings at all! It got to the stage when they just didn’t seem to care anymore.

Don’t have enough income? “No Problem!” said the banks and other mortgage lenders … “as house prices are shooting up, just tell us that you can afford it, and we’ll lend pretty much whatever you need … if it turns out you can’t pay your mortgage, we’ll just repossess your house, which will have gone up in value … a lot … and we’ll be able to sell it and get our money back that way.”

Two things happened as a result … one, the chickens came home to roost, so to speak. In other words, so many people could no longer afford their mortgages that the number of repossessions became enormous … so big that they effectively flooded the market with properties that were trying to be sold off “cheap”.

But the buyers slowed right down. And that led to what we all now know as “The Credit Crunch”.

And the second thing that happened was lending swung right back the other way. Banks then became so worried about lending they made sure they’d only lend if there was plenty of equity in the house.

So the size of deposits required became … well … big. People are needing to find 25% or more as a deposit now. (OK, some deals are now becoming a bit more realistic, but it’s slow change at the moment).

Now, that’s the background to the absence of FTBs. But we desperately need them back in the market don’t we? They are the bedrock of housing chains.

And what we need is FTBs (and everyone else too) to have the ability to buy a house at the right price. So they need:

- the right house

- the right price

- and a deposit (that’s hard to get).

OK, so now we need to help them.

And that’s what we’re going to do here at move2you.

We’re going to be revealing the methods (and there are lots of them) that people can use to raise the deposit they need.

Of course, that doesn’t just apply to FTBs … raising the deposit is useful for anyone buying a house.

So come back here again soon … when we’ll start to reveal methods of raising deposits. In fact we’ll even reveal methods of owning a house without needing a mortgage at all … (and all completely legally, in case you were wondering!)

Only property investors know some of this stuff … and while they’re making a killing from knowing it, it’s about time FTBs benefited from knowing this stuff too.

So, we look forward to welcoming you back soon as we build up the article base of information that could make all the difference to helping you buy your first (or next) home.

Speak soon.

Chris

• First of all do your research. Speak to people you know and find out what people are saying about the agents around where you live / or are moving to. Research them on the web and try and find out some facts about each of them; for example how many properties they have on their books, how many they are selling, how long on average houses remain on their books before being sold.
• Go and see all the agents you have decided upon and talk to them. Ask them about their experience and get a feel for what they know about the market and what it is happening in it. Ask them about their professional qualifications. It won’t necessarily make them a better agent but the fact they have taken the time to get qualified might give you some reassurance that they will do their best for you and in the right way.
• Go with your instincts. If you don’t feel comfortable with an agent then they are not right for you. Make sure you find out which agent will be running with your property and spend some time with that person. Do they want your business? Will they put the time and energy into selling your property into that you want them to. This is mostly gut feel and you need to go with your instincts.
• Don’t necessarily go with the cheapest agent. The fees that an agent charges are of course important but the professionalism of the agents and their desire to work on your behalf are also important. Go for the agent that gives you the best across all these areas. Ultimately you need to select an agent that you trust and one that you are sure is working on your behalf. There are estate agents who charge as low as 0.5% who can provide a better service than those 4x more expensive ie 2%. National chains will often be harder to negotiate with on fee levels.
• Spend time investigating exactly what activity the agents carryout in marketing your property. Take a look at the brochures they produce, ask them about their database of buyers, see if they can name buyers that are looking for properties like yours. Ask what other activities they carry out. Listing with online property portals is a given now, but see if they have any more imaginative ideas in terms of generating interest in your property. If you have ideas that are a little different make sure your agent is able to act on them and to put them into practice.
• Do some mystery shopping. Phone up or get a friend to call saying your interested in a particular property. Get a feel for how well the agent deals with your enquiry, how helpful they are and their level of professionalism. Agents that respect your time and don’t make you feel like a number will probably be better at doing the real work; selling your property.
• Discuss the market with each agent you are considering. Through your discussion make sure that your estate agent understands what you want from the sale of your property. You will need to choose an agent whose view of what your property is worth matches your own. Of course if you are provided with a lower valuation you may getting an honest valuation and not a figure that the agent thinks you want to hear.
• Choose an agent that has first rate negotiation skills. This could translate into a higher sale price.
• Look for an agent who is continuing to perform well and expanding due to success. An agent that is performing well is selling lots of properties.
• Examine the contract closely and fully understand what you are committing to. You must be happy with the contract so make sure you discuss and clauses in it that you are not comfortable with it or do not understand. You should not sign contracts you are not happy with. Overly restrictive contracts are not to be entered into lightly. Flexible contracts can indicate that the estate agent is confident about providing satisfaction to the client. Find out if the contract is a ’sole agency’ or ‘multiple agency’ contract? Multiple agency contracts are where you get several agents to sell your property, the one who sells the property gets the commission. Multiple agency contracts will most likely involve higher fees.

I hope this helps those of you that are about to embark on the sale of your home. Don’t forget that the move2you website is a tool that can be used in conjunction with an agent.

One of the key benefits of the site is the ability to use it to find people that are looking for properties just like yours. The site works like a dating site for property and as soon as you have a match with a prospective buyer you can use the site to make contact with them safely and annonymously. You can at any stage choose to get an agent involved or deal with it the sale yourself (maybe in a future post we could look at the pro’s and con’s of private selling versus using an estate agent).

Take care.

Ok, back again.

We were talking about HIPs in the last post. The fact that you need to spend £300 to test the demand for your house. It’s the law and there isn’t much we can do about it.

As much as we don’t like it and as much as we want it to change you do need a HIP if you want to market your property.

But what about reducing the risk of the gamble? What if you just want to test the market (like you used to) to see if there is any demand for your property before you actively market it as being ‘for sale’?

Wouldn’t it be great if you could instantly see the demand for your property, before you made the decision to pay the £300 for a HIP. If demand was poor wouldn’t it be good to know this before you write the cheque?

Well …… now you can!

Ok it’s a bit of a plug but we’d like to talk you through the move2you website, a website that lets you test the water first without any need to pay for a HIP.

Property websites are nothing new of course, we are all used to searching for properties when we think about moving. These websites don’t help the seller of course - they are just the online equivalent of putting your property in an estate agent’s window.

But this isn’t the reason for the post. As we talked about last time the problem right now is being able to test the market and see if your property is going to generate any interest at a price you are happy with before parting with a substantial amount of your hard earned cash.

This is where this site comes in. . It’s simple: it’s a bit like a dating site for your house. It matches people’s interests with people’s houses and then you take it from there.

A dating website puts people together – it takes information about what kind of person they are (age, job, hobbies, interests, looks etc.) and matches that with what other people are looking for (because they’ve told the website they’re interested in people who are … i.e. “this” age, with “this” personality, “these” interests etc.)

Move2you does the same thing, but for houses.

You let the website know that you’re interested in “this” kind of house, in “this” price range, in “this” road, village/town/city, with “these” characteristics.

And owners let the website know that they own “this” type of house, in “this” price-range with “these” characteristics.

And here’s where it’s different from other property websites – not only does it match owners with people looking, it also gives them the ability to “post a virtual note to them” – anonymously (unless you want to give your name).

So …. The site tells you who might want to “move2you”

And …. you can log an interest in someone else’s area or street to say “I might want to move2you” helping them see the demand for their property.

The really, really neat thing about this site is that you don’t need to be marketing your house to use the site - you could be “just interested” to see how many people want to live in your place. That’s why you don’t need to pay for a HIP - because the move2you website matches interests with properties even if they’re not on the market.

Of course if the demand is good and you do want to move, then you can take things forward.

So what does this mean for you? Well:

• You don’t need to gamble on a HIP.
• You can instantly see the demand in your place before you put it on the market.
• You can safely contact genuine potential buyers.
• You can sell your house by finding buyers directly.

And if you’re buying a house as well

• You can be the first to find out if a place you like is about to come on the market.
• You can safely contact genuine potential sellers.
• You can increase the chance of securing your dream house by getting in there first.

Sounds great doesn’t it? Well this is what you need to do to get started:

Well the first thing you need to do is register for free at www.move2you.co.uk

Then you add your interests – i.e. the locations you would be interested in moving to. This helps to create the demand.

Then you add your own property so you can see the demand.

This is when the matching process starts and you get the information that may help you find your buyer, and your next place. It could save you a packet too.

And what’s more, you can contact potential buyers safely and anonymously to see if they really are interested. If they are then it is up to you how you take it forward.

Seeing the level of demand for your property can be accessed for free. Don’t forget to do this the traditional way you need to register with an estate agent and then pay your £300 just for the privilege of seeing if anyone wants to buy your home.

Find out for free, or gamble £300. I hope you agree, that’s not too hard a decision!

Has anyone else noticed that there seems to be a bit of a surge in the number of houses on the market at the moment? This is purely anecdotal but in my home town at least there has definitely been a increase in for sale signs around and about the place.

There could be a number of reasons for this.

Maybe sellers are beginning to believe that prices have fallen as low as they are going to go.

Perhaps they are beginning to get fed up with hanging around and just want to get on with things.

Or maybe houses are stacking up because no-one is buying them!

There could be many reasons of course whatever the reason one thing is clear; they aren’t shifting. If you stick you home on the market it won’t be selling anytime soon.

Buyers are just not in the buying mood.

And the mixed messages coming from the Treasury about Stamp Duty really don’t help, we need to encourage buyers not put them off.

The fact of the matter is that sellers can’t pin their future success in the Housing Market on help from the government, the Bank of England in terms of Interest Rates or anyone else for that matter.

Sellers need to take back as much control as they can. I make no apologies to repeating this message time and time again in these posts, but it is important.

If you want to sell your house and you want to make a move then you need to do everything you can to ensure it happens. You can’t sit back and hope – if you do it will cost you time and money.

If you want to sell you property, do everything you can to find a buyer, don’t leave it to chance. Otherwise you’ll have that ‘For Sale’ sign outside your house for many months to come.

First posting for a few weeks as I took the family away on holiday to the beautiful island of Menorca. On the plane on the way there I was reading an article about the state of the Spanish housing market which is also going through a tough time, we’re definitely not the only ones.

Lots of commentary in the article but no advice about what to do.

On returning to these shores I saw an article in the Independent called ‘House rules: The truth about today’s property market’. The headline promised a lot but unfortunately again the article failed to deliver.

As before there was more commentary then answers; the overall theme being one of it’s tough out there but there are glimmers of hope. If you read it you will see that it provides a good summary of where the market is but again there is little guidance or real help for home owners or prospective buyers.

Now you don’t have to be a genius to work out that it’s tough do you?! You donlt need the papers to tell you.

And this is the problem with most of the commentary in the papers, it’s full of this is happening and that is happening but no-one will stick their heads above the parapet and actually give us some advice that will help.

That’s one of the reasons why we decided to do something and how the move2you concept was born.

Actually it would be wrong to say that nothing has been happening on this whilst I have been away. Chris has been working very hard with the website team to push the move2you website along and we will soon be inviting a select group to test it and put it through its paces.

The market might well be tracking down at the moment as per the article in the Independent but we don’t believe this automatically means that all activity in the market should just stop.

The real difficulty is for home owners that want to move because of the shortage of buyers right now.

But if you are a home owner that wants to sell and you can find the right buyer and negotiate a realistic price and then why wouldn’t you move?

And this is the philosophy behind the move2you site.

It gives you control.

By letting you see the existing demand in your property and enabling you to communicate with potential buyers you are taking proactive steps to sell your property rather than sitting back and waiting for the buyer to find you.

In the mean time before it goes live if you are a seller then you need to do everything you can to get your property noticed.

·         Don’t assume the estate agent is working tirelessly for you – check them out by asking a friend to act as a mystery shopper.

·         Research similar properties in your area – go and see some of them and see what their owners are doing to make them more attractive.

·         Price realistically – the market has shifted and you need to recognise this, price too high and people won’t even bother viewing it.

·         Consider giving away something with the property to encourage the buyers to make a move – e.g. a plasma TV or 6 months worth of free cleaning (not you doing it a cleaner!).

All of these things will help you sell but you are still dependent on a buyer finding you.

With the launch of move2you this will change and you will be able to go out and find a buyer.

And if being able to do that helps you sell your property it’s got to be worth checking out hasn’t it.

That’s all for now,

Dan

With the slowdown in the housing market it is becoming a real challenge for sellers to find a buyer at the moment. On the whole home buyers are playing the waiting game and are not taking the plunge into the market.

This is presenting a real problem for thousands of people up and down the country that want to or even worse need to sell their house and move.

It is an example of how market sentiment can build up a momentum of its own and influence the behaviour of many many individuals within the housing market.

And of course it works in both directions. When prices are rising everyone wants to cash in and buy buy buy and when they are falling no-one wants to do anything at all and it all grinds to a halt. No surprises there, but if you need to sell at the moment then you have a real issue to resolve; how to find that buyer.

If you are a seller then you can’t have failed to have noticed how you are very heavily reliant on a buyer finding your property amongst all the others out there, whether it’s in an estate agents window, in a paper or on a property website.

And as the pool of buyers diminishes the chances of a buyer coming across your property also diminishes.

In the market as it is today sellers must work harder to uncover the pool of hidden buyers that are out there. And by hidden buyers we mean those people that would be active in the market if it wasn’t for all the negative sentiment out there at the moment.

Finding hidden buyers isn’t an easy thing to do of course, but there are some things you can do.

·         You can set up multi estate agency deals to increase their exposure.

·         You can advertise you house yourself on numerous sites that offer services to people who want to do it themselves.

·         You could advertise it in local papers.

·         Generally you can be much more proactive in the marketing of your property

But all of these ideas still rely on you reaching someone that is actively looking and this is a problem we are working on to solve here at Move2You because it’s not the way the market works today.

Sellers today don’t have that level of control, and the reason for this is that they generally don’t have the tools to go out and find and then connect with hidden buyers.

The tool we are working at Move2You will be launched soon and we think it is exactly what is needed to help get the housing market moving again.

If a seller can find and connect with a buyer then a deal can be made, no matter what is happening in the broader market.

Speak soon,

Dan

With house prices continuing to show signs of weakening in many areas of the country are we right to be worried about this?

The media love this sort of thing of course, generating attention grabbing headlines telling us how we are all going to be worse off.

And of course it is worrying to think that the value of our homes is falling. We are a nation of home owners and the fact that our homes have increased in value so much over the last 10 years has created a feeling of prosperity and indeed for those people that have actually jumped out of the market or relocated to areas where prices are lower it has created prosperity for them.

But should we be as fixated on house prices as we are, or is this a ‘problem’ that has been blown out of proportion by the media and our natural inclination to follow the herd?

Doesn’t our fixation on prices work against us, particularly when prices are not shooting upwards, by paralysing us with fear?

Let’s take a look at this.

Traditionally we have viewed the housing market as a ladder, all striving to climb the ladder by moving to larger more expensive houses and by capitalising on price increases.

If prices rise we feel good about it and we are keen to make a move up to the next rung. Buyers are easy to come by and all is good.

But when prices fall or stagnate the story is different. Nobody wants to move, worried that they won’t make as much on their property as they feel they ought to or could have done a few months back. Better to just wait and see what happens to prices and stay put for now.

Of course when everyone does that the market grinds to a halt.

But viewing the market as a ladder with people climbing up or down it isn’t quite right.

Here at Move2You we like to think of the market as an escalator. Those of us that are home owners are on the Housing Escalator rather than the Housing Ladder and this escalator can move upwards or downwards in its own right as well as people individually moving up it or down it.

Let me explain.

When house prices move up they move up for everyone – ie the escalator moves upwards. And when prices fall they fall for everyone – ie the escalator moves downwards.

Of course it’s a little more complex than this in reality. The higher up the escalator you are the faster the escalator moves. This is because if house prices move by 10% the more your house is worth the bigger in the change in value in absolute £ terms.

So as prices rise those houses that are further up the escalator move a little further away from you with each percentage increase and likewise you move a little further away from the houses below you on the escalator. In a falling market those houses above you get close to you in affordability.

The principle however is that everyone is moving together on this great big housing escalator and this should give us all some comfort in these uncertain times.

It can be more worrying if the escalator has moved far enough in a downwards direction for your property to be worth less than you owe on it. But of course even then this situation only becomes a reality if you actually need to sell. If you don’t then it’s a case of holding your nerve and waiting for the escalator to move back up.

For the vast majority of us however this isn’t going to be a problem and we should try and be a little less fixated on house prices. Yes prices will go up and yes they will go down, but they are also doing the same for everyone else on the escalator.

So the key variable is if you want to make an individual move up or down the Housing Escalator and what you can so to ensure that such a move can be achieved successfully whatever the market conditions.

To do this the focus needs to be on the transaction(s) you will actually be involved in; i.e. you need to find a buyer for your property and find a suitable property to move to.

Right now finding a buyer is a really difficult thing to do as many of them play a wait and see game or are finding it hard to get a mortgage.

The buyers are out there however, they are just hidden or reluctant to make a move.

So this means you need to work hard to find these hidden buyers and then do everything you can to encourage them to make an offer.

With the way the housing market works right now finding a hidden buyer is not easy. It isn’t geared up to helping you do this. Right now you are dependent on potential buyers taking the necessary steps themselves to search for a property and then actually stumbling across yours.

And this is the problem we are working on solving at Move2You.

We are developing a tool that will enable you to access the hidden housing market and we think it is going to make a massive difference…..

Until next time,

Dan