Crosby & Woods Solicitors tips on what to do if you a buyer faced with buying in a strong seller’s property market
- Author: David Crosby
- Posted on: 10th March 2014
- Posted in: Blog
Brighton & Hove and Sussex as a County generally is most definitely experiencing a booming seller’s market at the start of 2014. In layman’s terms this means that due a shortage of property that is available to buy (a shortage which has always been historical due to the proximity of the City to the Sea and to the Downs), there are at present many more people looking to buy than there are available properties actually for sale. The consequence of this past and present imbalance is that desirable properties in good locations are seeing multiple buyers after them making the chance of being successful with an offer much more difficult to predict. Clients and the reputable estate agents we have worked with recently have all mentioned the popularity of ‘open house’ days where it is not unusual to see not just one or two buyers attend, but anywhere from 10-20 buyers. Needless to say when the odds on being successful can be as great as 10-1 or more, then a buyer needs to do absolutely everything possible to lower those odds so their offer has the very best chance of being successful. Based on our own experiences at Crosby & Woods, and also from collating helpful feedback from our clients, estate agents and mortgage brokers, here are some of the suggestions we hope are helpful to any prospective buyers.
Speed is of the essence. If you are selling to then buy, we suggest only start making offers to buy once you have accepted an offer on your own sale. If a seller thinks there may be delays whilst the buyer markets their existing property, then instantly a cash buyer or a buyer already under offer on existing property will go to the top of the queue.
If you are buying with a mortgage, ask a reputable mortgage broker with access to numerous products to submit an application quickly so you know from day 1 if you will get one in the first place and also how much you can actually borrow. Despite articles confirming access to mortgage products has improved, there is no doubt that any application needs to be properly prepared still to have the best chance of success and a broker is best placed to maximise prospects of success. An agreement in principle off a mortgage lender is very reassuring for a seller to see as they will know the buyer has been proactive in making sure they can afford to proceed. If you are a cash buyer (i.e. no mortgage finance), then certainly giving some evidence of this to a seller will help make you look a very attractive proposition.
Make sensible offers, in a seller’s market a low offer to ‘test the water’ will almost certainly get rejected out of hand and more importantly, it is likely to leave a very negative impression with the seller. A buyer should decide what they can afford and also what they feel is a reasonable and maximum price to pay and stick to it. Unless and until the market changes back to a buyers one, now is not the time to ‘haggle’ excessively over price in the mistaken belief that the seller will eventually give in. Sellers clearly have a strong hand at the moment from rising prices and multiple buyers so our advice is make a sensible and considered offer from the start and be consistent thereafter.
Instruct an experienced and preferably local to the area solicitor at the earliest opportunity and be sure you and your solicitor are working well together as a team to make the purchase happen. The buying process can be a very stressful one so it is essential that there is a free flow of communication between a conveyancer and their client (as well as any estate agent and broker involved) and that there is confidence throughout that the conveyancer has not only the expertise and training to do the work to the highest standard, but also that they are working full time and are accessible so that no avoidable delays arise from them being absent from work. The Law Society have set up the Conveyancing Quality Scheme (CQS) and this is very much seen as a benchmark of quality and good practice. Sellers and buyers should certainly get reassurance that if they instruct a CQS accredited firm, then that firm is working to best practice standards at all times. We would also advise buyers and sellers who have a mortgage to make sure from the very start that their legal advisor’s firm is on that mortgage lenders approved Solicitors Panel. The legal profession is currently going through a period of change whereupon mortgage companies are often only allowing their panel firms to act. Clearly where the market is so competitive and is making time of the essence on almost all transactions, being certain your legal conveyancer is pre-approved to act for you and your mortgage lender is essential to avoid delays arising later on.
Gazumping – a word dreaded by all clients and a practice frowned upon by most people. It is however sadly a growing reality in a booming seller’s market and therefore it is something all buyers need to be aware of and deal with if it arises. There are not many ways to eradicate this risk but certainly asking the seller to remove the property from the market immediately after accepting an offer is helpful. This however will not give 100% certainty as it does not stop another rival buyer approaching a seller direct with a better offer or a quicker completion timescale. Unless and until contracts are exchanged and thus the seller is contractually obliged to proceed, the risk of being gazumped therefore remains.
We hope the above guidance and comments are helpful to anyone reading this and that they will assist you in being fully and best prepared to buy your property. Please feel free to call and speak to one of our property experts at the firm if you would like to discuss your requirements and to also obtain a no obligation and itemised fee quotation should you wish to instruct us to act for you. Crosby & Woods, 01273 734 600 and firstname.lastname@example.org