Written for Wikivorce by estate agent, Steve Lucas
In part one we looked at how to go about selecting the right estate agent and whether you should instruct one or more companies to sell your property. We also touched briefly on the differences between online firms and traditional estate agents, as well as whether you should mention divorce as the reason for selling. †Letís now move on to a few more points to consider when selling your former marital home.
Asking price and fees Get an idea of what your propertyís worth before calling in the estate agents. There is a wealth of information available on the internet to help you do this. However, bear in mind that data on house price websites can be slightly out of date. The average property sale can take anywhere between eight to twelve weeks to complete. And it is on completion that the price paid is recorded by Land Registry and in turn, the house price websites. So, if a flat goes under offer in early May but the sale doesnít complete until the end of July, the data is nearly three months old. Therefore, allowances must be made for a possible shift in prices during this period - especially in erratic market conditions. Another point to note is that house price websites will not specify if a property was sold in good order or required complete refurbishment. Once youíve researched local house prices, invite a minimum of three estate agents to value your home. If one recommends a much higher asking price than the others, ask him why? Does he have a special buyer that will pay the higher price? And whatever figures the agents provide, they should, where possible, back it up with evidence of comparable properties sold recently. If the commission rates quoted differ, donít be afraid to haggle - estate agents are often willing to negotiate (within reason) on the original rate they ask for. Iíve heard many agents say theyíd never lose a good instruction over fees. One such example is a family home located within the catchment of a popular school.
Never disclose how much you want for your home or what other agents have quoted until the estate agent in front of you has completed their valuation and presentation.
Remember, itís your home and itís you who decides what to ask for it but what it eventually sells for will be dictated by market conditions Ė providing it has been promoted correctly. Traditionally, the best time to sell is the period after Easter and before the school summer holidays. August and December are not good months to sell. You want to get the best price you possibly can but be realistic. You can test the market at an optimistic price and you might get it. If after six weeks, youíve not achieved the desired result; the property has been given the correct exposure and youíre not selling in the run up to Christmas, you can always adjust the asking price and start again. Viewing appointments
This is the inconvenient part of selling your home; having to ensure the property is presentable for people to view it Ė often at short notice. Itís also the point at which the partner in a divorce scenario whoís reluctant to move can cause problems. Not responding to the agentsí requests for appointments to view, cancelling or not being there at the agreed time and highlighting defects in the property to prospective buyers are classic delay tactics. One divorcee told her friends that she pretended to be out and didnít answer the door to the agent and buyers on her doorstep. Another decided to tell the people viewing his home about the high rate of burglary in the neighbourhood! While a consent order will stop such fun and games continuing indefinitely, avoiding having to enforce one is always best. So, even where the seller is available for viewings, the estate agent should accompany buyers whenever possible. Doing so can prevent the above shenanigans and allow other members of the sales team to see the property, not just the negotiator who valued it. Itís easier for them to sell a property once theyíve seen it. If a hectic schedule makes it difficult for you to show your property, give your estate agent a set of keys to show it when youíre not around. Ask that they phone ahead of visiting the property. That way you can monitor the number of viewings plus your agent wonít turn up with prospective buyers while youíre in the shower. Estate agents should store keys securely and not release them to anyone except authorised people such as surveyors.
Negotiating the offer
When your estate agent presents you with an offer from a buyer, thereís certain information that they must have as a minimum. They should provide you with a breakdown of how the buyer intends to finance the purchase. If a mortgage is involved, how much needs to be raised, and is it in place or subject to employer/accountant references? If the buyer has a chain, your agent should check details of that chain prior to notifying you of the offer. This involves calling the relevant estate agents in the chain below.
Your agent should never disclose to a prospective buyer how much you will accept for your home unless expressly instructed by you to do so. If your asking price is £200k, the agent volunteering that £195k will close the deal will cost you money if the buyer intended to pay £198k all along. If your property has competing offers, itís good practice for the agent not to disclose one buyerís offer to another. Doing so may create an auction scenario resulting in buyers overstretching and possibly renegotiating at a later stage. Buyers should be asked for their best and final offers and all information mentioned above confirmed.
The buyerís finances and chain have checked out and youíve accepted their offer. Do you withdraw your property from further viewings? If you donít, will you accept a higher offer if one is made? If you do take it off the market, will your buyer continue viewing properties through other estate agencies? In England and Wales nothing is binding until contracts have been exchanged and so there needs to be an element of trust from all involved.
Quite often, the property is withdrawn from the market to allow the buyer to proceed with booking the survey. Sometimes, the property will remain on the market until the survey has been booked as the expense of one shows the buyerís commitment. In some cases the property isnít withdrawn from further viewing until the survey has been carried out and the buyer is happy with the results. Each individual case must be judged on its own merits and a good estate agent can advise on the best course of action; however, the final decision is yours.
Much of what happens during the conveyancing stage of a property sale is beyond the remit of estate agents; however their role does not end there. A good agent should progress the sale along at regular intervals, communicating with you, your buyer, the solicitors and other agents in the chain.
What to watch out for
In part one; I said it doesnít matter if estate agents and prospective buyers know youíre selling because of divorce and that trying to hide the fact is difficult. Most people conclude that anyone selling a former marital home will want to do so quickly because of the stress and expense that comes with divorce. If that applies to you, play your situation down! No doubt youíve heard stories of corrupt estate agents purposely under pricing a property with the intention of either buying it themselves or selling it to a developer in return for an envelope stuffed with cash. Such conduct contravenes the various acts that govern the industry and explaining exactly why would take too much space here and now. Safe to say, that such scenarios are rare. If you do your research on local house prices and then invite five estate agents to provide a no obligation valuation of your home, youíll have a pretty accurate idea of its value. And if one of those five agents suggests an asking price much lower than his four competitors, youíre not going to instruct him are you? However someone with an ulterior motive can come at you in a different way.
Letís say five local estate agents have provided similar valuations of your home. One suggests a slightly higher asking price than the others and so you instruct him as a sole agent. Somewhere along the line, if he presents a really low offer to you; one that heís not recommending you immediately dismiss out of hand, you should be suspicious. He may have told a buyer of your plight and theyíre both trying it on. Stick to your guns!
Another thing to watch out for is the nasty practice of ďGazundering.Ē This is where a buyer revises their offer right at the end of the transaction, usually just prior to contracts being exchanged. A divorced couple may have each found a flat to buy and are relying on the proceeds from the sale of their house to do so. Therefore, the two flat purchases form part of the chain and are connected to their sale. Time and money have been spent, and then right at the last minute, the buyer says he wonít buy the property unless the seller reduces by £30,000 from the previously agreed price. So, either the sellers lose a lot of money or the chain collapses and they lose their prospective purchases. The couple will be out of pocket and the stress of the divorce is added to and prolonged.
Gazundering can be difficult to avoid. However, itís easier to guard against a buyer intent on using such a tactic, than it is to prevent one pulling out of purchasing your home due to a change of heart or personal circumstances.
After all, no one lays out money for solicitors and surveyors knowing they might not buy the property. And if a buyer cites a bad survey as the reason for renegotiating the agreed price, you have every right to ask to see the report. A genuine buyer will tell you about an unfavourable survey as soon as they receive it and not at the last minute.
In very rare cases, an estate agent may be party to Gazundering by introducing a buyer he knows does that sort of thing. Whether the agents know itís going to happen, or have been duped, the unscrupulous individuals who set out to Gazunder often come under the guise of a property investor.
Nowadays, professional property investors donít often obtain their stock from estate agents. They buy properties from auctions and through contacts such as solicitors, surveyors and liquidators. Such properties are either dilapidated or have problems with the legal title that might prevent the average buyer raising a residential mortgage to purchase them. The seller or their representative may require the property to be disposed of quickly and everyone involved knows itís a business deal. So if a property investor is interested in buying your former marital home, ask yourself: whatís in it for him? Does your home really have short-term investment potential at the current price?
Other bizarre attempts to exploit divorcees include devious buyers trying to bribe one of the partners into cheating their former spouse out of money. Something along the lines of asking them to persuade their ex to take a lower offer in exchange for cash for their role in the underhand deal. Donít be tempted. Donít give buyers your contact details and politely ask that all negotiations go through your estate agent. Selling the home you once shared with your partner and maybe children can be a sad and stressful experience. But it can also signal a new beginning. I hope what youíve read here helps you out. Good luck!