Property Gold: What are you really paying an agent for?

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. This month, Alex explains what an estate agent is really paid for.

 

 

The sceptics out there will say this sounds like an oxymoron; however it has never been more important to have a rock solid agent that is correctly remunerated to keep their motivation.

Let’s be clear about something – getting your property on to the market with high quality photographs, floorplans, brochure and web entries is easy. You do not need to be the best agent to do this.

Matters then step up a gear when it comes to viewings and the general administration of your sale. Again, you do not need to be a great agent for this.

So where then does your estate agent commission go and what are you actually paying for? The answer lies with once you have found a buyer, or you think you have found a buyer.

Current property law means that a buyer or seller can withdraw from a transaction at any point up until the point of exchange, without any financial penalties or otherwise. It is therefore vital to keep the time between Under Offer and Exchange as tight as possible, whilst ensuring you are agreeing terms with a reliable party.

Importantly, do remember that getting the best offer from a buyer doesn’t necessarily mean running with the person who puts forward the most amount of money. One has to weigh this up with the reliability and security of the buyer – in other words, will we transact with this buyer or not?

An experienced agent will instinctively know the tell-tale signs if a buyer is serious, get the most money from them without pushing too far and losing them, ensure the foundations of their offer are robust, plus know where the monies are coming from and the situation behind the façade.

Whilst the Yorkshire market continues to charge along for the time being, getting from Under Offer to Exchange of Contracts remains incredibly demanding – arguably the most difficult I have known it in 19 years.

One of the main reasons for this is the length of time everything takes. Keeping the attention of buyers and sellers during this time, whilst pushing conveyancing solicitors and the several other associated professionals in the right direction, plus keeping timeframes to an absolute minimum in order to reach Exchange is a tall order.

If the sale falls through, then it is the buyer and seller who pick up the pieces. The extra often notional amount of money on agents’ fees, will mean that your transaction gets over the line first time and on time.

Your agent needs to have the time, experience, detective skills, relentless persistence and clout in order to see transactions through. After all, going Under Offer is only step one.

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk.

Read More: 

 

Sell your Harrogate home quickly before Stamp Duty rises

The article is sponsored by Hopkinsons Estate Agents.

If you are thinking of selling your house by the end of June to make the most of reduced Stamp Duty, you need to move fast and find an agent who’s geared up for a rapid sale.

Harrogate-based Hopkinsons will cut through the process and get your house on the market within three days, with:

Hopkinsons founder, Jeremy Hopkinson, says properties in Harrogate are selling extremely quickly at the moment:

“I’m the busiest I’ve ever been since I started selling property in 1989; because of the pandemic, more people are wanting to move for a variety of personal reasons – and we’re ready to help you rapidly sell your home. From valuation to instruction, we will have your property on the market within three days.”

3 Gilsforth Lane went live with Hopkinsons on 26 March. Five days and nine viewings later, a sale had been agreed.

To help your home sell as quickly as possible in preparation for the end of the Stamp Duty reduction, Jeremy has this advice:

If you are buying a home, Jeremy has some additional tips:

“If you act fast, you still have time to complete before the end of the tax freeze, subject to local searches. Hopkinsons is 100% focused on residential sales in the Harrogate district and have a track record of speedy sales, so get in touch.”

You can contact Jeremy and the Hopkinsons team at www.hopkinsons.net or on 01423 501 201.

 

Property searches ‘down to 12 days’ in Harrogate district

Home buyers in the Harrogate district have been given a second reason for optimism after the extension to the stamp duty holiday announced this week.

After months of complaints that its search process was taking too long, Harrogate Borough Council last night said it has reduced the average waiting time to just 12 days.

It is down from seven weeks, which buyers and estate agents said was causing significant delays to their purchases. However, at Wednesday night’s full council meeting, cabinet member for planning Cllr Tim Myatt said:

“As of Friday, we had 146 live searches in our system. In a normal situation, we would expect to have approximately 200 searches in the system at any point, therefore we no longer really have a backlog to speak of…

“We have trained additional council staff on the necessary process to complete searches and we have also contracted additional resource externally so the team are confident that they continue their positive performance.

“The team have worked very hard to overcome the challenge posed by the influx in search requests last year and I know the team are grateful for the support from members across the entire council.”

Cllr Myatt said simple searches requiring only information from HBC were taking an average of four days. For more complex searches needing information from North Yorkshire County Council, it was taking around 16 days, giving an average of 12 days.

In response, Cllr Samantha Mearns, who represents Knaresborough Scriven Park for the Conservatives and had asked for the update, said:

“We’re very grateful to the team for getting on with that, because clearly it has caused our residents some concern. It’s fantastic that you have got that under control. It’s just a shame North Yorkshire are slowing your average down.”

Read more:

News of the extension to the stamp duty holiday in the Budget this week has been welcomed by local estate agents. Chancellor Rishi Sunak announced that the end of the scheme for homes up to £500,000 would be moved from March 31 to June 30, followed by a tapering down to £250,000 until the end of September.

Tim Waring, head of residential at Lister Haigh, said it was a “welcome move”. He said:

“This will at least in part avoid the “cliff edge” scenario that has created so much pressure on the residential market in recent months. Help for those wanting to get on the property ladder, as opposed to renting, is another welcome move, all of which should stimulate the market during the remainder of 2021 as the lockdown restrictions gradually come to an end.”

Nick Simpson, co-founder and managing director of Linley & Simpson, added:

“The property industry was badly hit during the first national covid-19 lockdown, and the stamp duty holiday which Mr Sunak announced last June was a welcome shot-in-the-arm.

“It is clear that he has listened to the concerns of the residential property industry, and the stamp duty holiday extension, plus 95%, will particularly benefit first-time buyers and those looking to move in the next few weeks.”

The property market in the Harrogate district was extremely busy in the autumn following the introduction of the stamp duty holiday, but prospective buyers told the Stray Ferret they were concerned delays with searches would prevent them completing in time to avoid a major tax bill.

Mr Waring said estate agents will now wait to see the impact of the news on reduced search turn-around times so local buyers to take advantage of the scheme’s extension. He added:

“The stamp duty extension might relieve pressure in the short term, but it must be remembered sales have to complete, not just exchange, by the end of June to qualify. That is only three and half months away so if local search turnaround timescales don’t improve quickly, the number of homebuyers able to benefit from the extension may not anywhere near what the Chancellor might have expected.”

Property Gold: The hidden time options when selling your home

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With over 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This week Alex looks at how you can control the sale of your property if you haven’t yet found your new home. 

 

Time. It is one of the most important factors when trying to buy or sell your home. More often than not, matters do not move at the pace you want. Don’t even get me started on local authority searches and mortgage lenders!

One of the most regular obstacles I come across is when vendors are unsure about selling their home, as they haven’t found a property they wish to move to. Their default thinking tends to be that they will be kicked out on to the streets by their buyer, before they are ready. This is not the case.

Putting transactions together on the right basis is key and there are some lesser known options that sellers (and indeed buyers) need to have up their sleeves when negotiating. Just how do you build in extra time into a transaction and still be in control of it, whilst keeping both sides happy?

Yes going into rented is the ‘go to’ option, however try looking at AirBnB. Many landlords have lost income during the restrictions and therefore if you wish to secure their property for a period of time, have the freedom to pick your own dates and at more favourable market rates, this could be an answer.

The other known strategy is to exchange and then delay completion by a several months, however, suggest completion ‘if not earlier by prior mutual agreement’. This means that both buyer and seller can make completion earlier, should they require, however neither side can go beyond the backstop date.

Read More: 

The lesser known angles and which are also win-win scenarios for both sides are:

Licence back agreements. This is where the property exchanges and completes, however the ‘former owner’ then rents the property back from the incoming buyer at more favourable rates. This means the vendor can stay in-situ in their home, has more time to find their next home and most importantly are in a top buying position. In contrast, the new owner has secured the property and has a reliable tenant already there.

An alternative angle is that once a seller has found a buyer, is to issue the memorandum of sale to all parties. However you then ask the solicitors to stop working on their respective files. This gives the buyer reassurance that you are taking their offer seriously and means that the vendor is instantly put into a proceedable position, as they can prove their property is now Under Offer.

Yes these options can prove to be useful to break impasses, however they can only be deployed when you know what the buyer and seller are trying to achieve. Indeed I have done transactions where I have used a number of these options all together. The key is to find that key middle ground and think laterally.

Housing developers pay £1.2m to fund Harrogate projects

Harrogate Borough Council charged housing developers £1.2m in 2019/20 to fund infrastructure projects, such as children’s play equipment and village halls.

The figure is revealed in the council’s first infrastructure funding statement.

The statement includes details of section 106 payments, which developers pay as part of the planning process to fund infrastructure that residents will use. 

A report to councillors revealed that of the £1.2 million generated, the council has so far collected £550,000.

Almost £200,000 of this has already been spent on schemes such as children’s play equipment, allotments, cemeteries, open spaces, village hall improvements and outdoor sports repairs around the district.

Examples of specific projects include: improving the toilets at Killinghall village hall, improving a multi-use games area in Kirkby Malzeard, installing planters in Darley and erecting village signs in Little Ouseburn

Harrogate Borough Council’s section 106 payments relate only to open space, village halls and affordable housing.

Developers also pay section 106 payments to improve education, roads and public transport but these are collected and monitored by North Yorkshire County Council.

Read more:

The report also reveals the council has collected £2.4 million in section 106 payments from previous years, which it has not yet spent.

The document says section 106 payments can only be spent when the final payment from a development has been received.

It also says it keeps the money to “avoid the risks associated with developers going out of business”.

The report is expected to be rubber-stamped by the council’s cabinet member for planning, councillor Tim Myatt, on Tuesday.

Property Gold: Are leasehold properties just modern day slavery?

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With over 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This week Alex looks at why leasehold property purchases are so controversial. 

 

Leasehold reforms seem to be here, with the Government now intervening and yet again the PLC developers are in the news for all the wrong reasons.

In September, the four largest house builders were investigated after ‘troubling evidence’ was uncovered about how leasehold properties were being sold.

The CMA (Competition and Markets Authority) found that some leasehold buyers were being hit with ground rents that doubled every decade, pressurised selling tactics and informing buyers they could buy the freehold for a small sum, only to find out latterly this cost had increased significantly. This left many people in a position of never being able to sell – a modern day slave to leasehold ownership, you might say.

Whilst the Government took action last year against the developers, the ban was not retrospective. This left many stuck in unsellable homes with crippling ground rents. Too little, too late for them unfortunately.

How then has this all come about?

Be under no illusions, the PLC developers are all about money and profit margins. Ethics and morals aside, selling a leasehold house gave a PLC developer more angles to make money.

They could sell the freehold to an investor, who in turn could ratchet up ground rents and the developer doesn’t get their hands dirty. This would provide (up until now) a useful additional income stream and was all legal.

How, then, have people managed to buy such properties and be unaware of the pitfalls? Could it be that some PLC developers had a monetary referral system with a panel of ‘recommended’ conveyancing solicitors, who then overlooked updating buyers on the finer detail?

It’s easy money with limited input required – keep ground rents high for additional income (which also commonly had annual percentage hikes) and charge leaseholders to alter their homes. Combine these with poor building management and these properties become even harder to sell – hence the birth of the ‘fleecehold’ movement.

Now that the Government claim they want to resolve matters, will leaseholders have the opportunity to retrospectively claim their costs back for lease extensions or purchasing the freeholds? Equally, could this now open the floodgates for legal cases against the PLC developers?

What is clear, is that the PLC developers created various angles to squeeze more money out of a deal, meaning higher share prices, happier stockholders and bigger executive salaries.

Whilst the Government have promised that leasehold reforms are coming, there’s no reason to celebrate just yet. All eyes are on the detail, which will do little for those owners who have been already hoodwinked and are now enslaved to their properties. Thank your lucky stars you have read this and won’t fall for the same tricks!

Property Gold: Virtual Tours – are they worth it?


Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With over 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This week Alex explains the benefits and pitfalls of selling your home using virtual tours. 

When it comes to selling your home, we are consistently told that estate agents need to use every tool at their disposal – from accompanied viewings to drone imagery and social media campaigns. However one relatively new bit of technology is getting a lot of coverage both by agents and indeed the property portals – virtual tours.

From the comfort of your armchair, you can now have a ‘virtual look’ around a property in high resolution and never leave your own home. Given the Covid circumstances we currently find ourselves in, there is a strong argument to create a virtual tour of your home. Afterall they look great, buyers seem to love them and if it helps sell your home then why not?

However as I see it, there is another angle to virtual tours and the way they are generally used in the marketplace currently is questionable.

Firstly and most importantly, a virtual tour is a significant security risk. Having interviewed a former Royal Marine Commando who now runs his own security business, he concurred that given the high resolution of these tours and ability to zoom-in, meant he could easily find out where alarm panels and sensors were, family photographs and documents to research the vendor, where keys were kept, high value items, plus of course take an in-depth walk through. Thankfully he was one of the good guys, but what if he wasn’t?

Read More: 

The other issue is that virtual tours are often casually placed online, however it gives too much information away up front about a property. You are letting interested parties make up their own minds about your home, without them engaging with the agent, which somewhat defeats the object of the exercise, especially if they have got the wrong impression.

It is always encouraging to hear that you received several hundred views of your virtual tour, however the agent can’t follow any of these viewers up, as they and the portals do not know who actually viewed it.

Instead, I feel the key with virtual tours is to keep them offline and for the agent to retain control by offering ‘accompanied virtual tours’. This means that an interested party can still virtually look around your home, however the agent shares their computer screen and talks the viewer through in real time. This means you will get better feedback, more engagement and don’t unnecessarily add to your digital footprint.

The key with virtual tours – less is more!

 

Local property business expands

The 101-year old property business Lister Haigh has expanded its workforce with five new recruits.  

The company, which was started by Oswald Lister at Clint and Hampsthwaite in 1919, has offices in Knaresborough, Harrogate and Boroughbridge.  

The company’s expansion comes a week after the Stray Ferret reported a ‘manic’ July and August for the local housing market. 

Tim Waring, head of residential at Lister Haigh, said: 

“The majority of our appointments are due to expansion of the business post-lockdown. Our agricultural consultancy is as busy as ever. Our residential agency business is getting busier and busier, which we expect to continue into the new year.” 

In July, the Chancellor Rishi Sunak increased the threshold for stamp duty from £125,000 to £500,000, which has boosted the house market. This will continue until April 2021.  

Read more:

Surveyor Richard Duffus has joined the firm from London and will be based in Boroughbridge where he will work alongside Paul Johnston on residential and commercial lettings.

William Pheasey has been appointed assistant rural surveyor at the Knaresborough office.  

Samantha Paterson has joined the Harrogate residential property team as a sales negotiator.

Two administrative appointments – Gill Harris at Knaresborough and Annie Thompson at Boroughbridge – complete the list of new starters at Lister Haigh.