I am selling my 2 bedroom apartment as I can now trade house.
I’ve seen some properties that I like, but I’m afraid to make an offer because I’m having a hard time selling my apartment.
Most of the people watching it are first time buyers who I think are feeling nervous about the economy, and can no longer borrow as much as they expected because of the high mortgage rates.
Should I lower the price, take on the right buyer, or put my plans to move on hold until things are more certain?
Caught between a rock and a hard place: Our reader cannot decide whether he should lower the asking price or stay in the current market
Ed Magnus of This is Money replies: House moving is a stressful process at the best of times. You need to find and agree on a price for the property you want to buy and find a buyer who wants to buy your existing home.
If the person you’re buying from or the person you’re selling to changes their mind or walks away at any point, you could end up bitterly disappointed.
Then there are all the legal, mortgage, and survey issues — and their associated costs — that can arise throughout the process.
It all leads to a home moving process that takes months to complete and is often filled with anxiety and sleepless nights.
For now, you’re probably right in thinking that first-time buyers might feel a little nervous.
They are facing some of the highest mortgage rates on record since the financial crisis, along with an expectation of lower housing prices in the near future.
House prices fell 0.4 percent in October, the third decline in the past four months, according to the latest Halifax House Price Index.
If you’re finding it difficult to sell your apartment, you’ll need to lower the price to attract buyers — but that doesn’t mean you can’t try to haggle the difference from the home you’re trying to buy.
After all, if you’re struggling to find a buyer, chances are there are other opportunities in your area, too.
For more tips, we spoke to Angela Kerr, HomeOwners Alliance Director, Nikki StephensonManaging Director of the Real Estate Agent Group Fine & Country, Matthew ThompsonHead of Sales at Chestertons Estate Agents Ian MackenzieCEO of the Guild of Property Professionals.
Is now a bad time to move home?
Angela Kerr answers: It makes sense to hold off on making an offer on a new property until you have had an offer on your property.
Finding a buyer currently takes an average of 37 days, so give it some time.
You’re right that some buyers will feel more uncertain. The ex-chancellor’s mini-budget in September made a mess.
Dry first time buyer? Some aspiring first-time buyers will put their plans on hold until mortgage rates fall, or at least until the outlook for home prices improves.
Zoopla’s home price index shows that demand has fallen by a third since then. But there are signs that things are now leveling off, with some experts predicting that mortgage rates will stabilize at 4.75 percent instead of 6 percent.
Although unsurprisingly high rates, higher rates mean that new borrowers will find that they cannot borrow as much, and therefore bid less.
Should they reduce the asking price?
Angela Kerr answers: Before you act, talk to your real estate agent. Get feedback on offers and their vision of the local market.
Put yourself in the shoes of the buyers and look at Rightmove and Zoopla for properties similar to yours.
Is your apartment similarly priced? Is it as good as other houses? How urgent are you to move? Are others lowering their prices and selling them?
All of these will inform your decision about whether and how much to lower the price.
Autumn: The median UK house price was £292,598 in October, according to Halifax, down from £293,664 the previous month.
Ian Mackenzie replies: Depending on what’s going on locally, and your financial situation, what feels like a deduction may not even be a deduction.
Sellers often feel that prices are held back if they cannot achieve the appraisal their agent encouraged them to sign up for. Take a look at the prices at which similar local properties have recently sold.
There can be a huge difference between the marketing price you’ve seen on real estate portals and the guesses homes actually make when exchanging contracts.
You may find that your discount sale price still compares favorably, and as long as the discount doesn’t make your purchase too expensive, you’ll then feel more confident about proceeding.
And it costs nothing to see if the modest cut sparks the kind of interest you need from buyers.
Should they delay their move entirely?
Angela Kerr answers: At your suggestion, you wait until things are more certain, just be aware that there is no perfect time to move house.
We had Brexit, then the pandemic, and now the cost of living crisis – but even so, people still need and want to move home.
A house is meant to be lived in, and if your personal circumstances dictate that a larger house is good for you – and your finances allow – this is as good a time as any
A home is meant to be lived in, and if your personal circumstances dictate that a larger home is good for you—and your finances allow—then this is as good a time as any.
Home prices are expected to fall next year, but since you’re buying and selling at the same time, the effect is likely to be proportional: You might sell for less, but you should aim to negotiate a similar percentage on your next purchase.
Matthew Thompson replies: You should consider shelving your plans or lowering the asking price once all options have been fully explored.
Keep in mind that if you hold off selling and confidence returns to the market during that time, prices are likely to go up and you could be priced out.
I would suggest reviewing how long the property has been on the market, how many viewings have been made and what the comments are.
To give your selling plans another boost, find out what your agent does to reassure first-time buyers that now is the time to buy.
In most cases, buying still makes more financial sense than buying, but the agent must act on your behalf to secure the sale.
Although the majority of your views are from first time buyers, what else can an agent do to appeal to other buyer demographics?
Should they sell before they buy?
Nikki Stephenson replies: This is a difficult time for homeowners looking to trade. The increasing volatility of the mortgage market has caused many to put their plans on hold.
One option is to sell your apartment first and either rent or stay with the family until you find a home that meets your needs.
This may save you the grief of losing your dream home after your offer has already been accepted, but there is obviously a significant cost attached.
Bargain: If you are selling your property for less than you had hoped, try to buy a property for less than you expected
An extra word of caution for those considering a return to renting while buying – competition in the private rental sector is fierce at the moment and rents are going up all the time. Landlords can pick and choose who they want, and you may find yourself being ignored.
It’s also possible that your landlord will want you to sign a one-year lease, and you risk losing your deposit if you complete a purchase and decide to move out early.
Any final tips?
Ian Mackenzie replies: The real estate industry is currently in a state of flux and this means that it is very important to focus on the home price spread – in other words, the difference between the price you pay and the price you get for your existing property. This is the deciding factor in this scenario.
It may be unhelpful to think of your current apartment as having earned you a handsome profit since you bought it because it is all relative. Do not comment on prices.
If you get rid of this way of thinking, you will find it much easier to make good decisions with a clear head.
Some parts of the market are consolidating right now, so if you can find a buyer for your apartment by lowering the price, but make that money back by securing a discount on your next property, it’s clearly the ideal outcome.
For example, lower your asking price and secure the same discount on the home you want to buy and you’ll be good to go. You’ll be a little better off because you’ll pay less stamp duty on your purchases.
What to do if you need a mortgage
Borrowers who need to find a mortgage because their existing fixed-rate deal is coming to an end, or because they’ve agreed to buy a home, are urged to act but not panic..
Banks and building societies are still lending and mortgages are still being accepted with applications accepted.
However, rates change quickly, and there is no guarantee that deals will stick and won’t be replaced by mortgages that charge higher rates.
This is Money’s best mortgage rate calculator powered by L&C that can show you deals that match the value of your mortgage and property.
What if I need to re-travel?
Borrowers should compare rates, talk to a mortgage broker, and be prepared to work to secure a rate.
Anyone with a fixed-rate deal that expires within the next six to nine months should consider how much a remortgage will cost now — and consider a new deal.
Most mortgage deals allow a fee to be added to the loan and then only charged when you take it out. By doing this, borrowers can secure a rate without paying expensive arrangement fees.
What if I’m buying a house?
Those who have agreed to buy homes should also aim to lock in prices as early as possible, so they know exactly what their monthly payments will be.
Homebuyers should beware of overexerting themselves and be prepared for the possibility of home prices falling from their current high levels, due to high mortgage rates limiting people’s ability to borrow.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to talk to a good broker.
You can use our best mortgage rates calculator to show matching deals for your home value, mortgage size, term needs and flat rates.
Be aware that rates can change quickly, so the advice is that if you need a mortgage to compare rates then speak to a broker as soon as possible, so they can help you find the right mortgage for you.
> Check out the best fixed rate mortgages you can apply for
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