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My Vision of Estate Agency In The UK

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My typical day as a UK Real Estate Professional

I wake up in my dream home with my beautiful family and we get breakfast on the go. I’m looking at today’s diary of appointments over a hot cup of coffee.

I drop my kids to school and I head to the gym for a workout. Whilst winding down after an endorphin boosting HIT class, I’m chatting to some other members in the sauna about house prices. I’m known in my gym as the local property expert.

I get back home, put the kettle on and get everything I need for the day (keys, property details and information about the people I’ll be meeting that day).

I pop out for a couple of hours to host an Open House where I meet lots of  lovely people. I chat with one particular couple about them putting in an offer and we got on so well that they invited me over to their place to give them a valuation of their own property.

After a couple more viewings that day, I arrive back home and start making some calls to deliver the good news to my clients about offers that I’ve generated. I’ve also got a new listing to put on the market, so I have photographs to upload and a floor plan to create. My favourite part is writing the property description, hoping to entice prospective buyers to come and view my clients homes, even without photographs!

I’m now off to pick up the kids from school!

Fabulous news! I’ve just had word from a solicitor that one of my clients sales has completed. I call to give them the good news and they are ecstatic! I’m also looking forward to seeing a few thousand pounds of well deserved commission hit my account later that evening. I make a call to the buyers to let them know of the same exciting news and to congratulate them on the purchase of their new home. I jump back in the car to meet them down at the property so I can personally hand them their new set of keys and a little moving in gift from me. That’s a photo opportunity for my social media page!

I get back home, ask Alexa to play my favourite play list and I start making the family dinner. We’re all sat around our big table and each of us chat about what kind of day we’ve had. From our dining room window we have the most stunning view over Broadstone Golf Course, another one of those “pinch me” moments.

No day is the same in this game, but as a real estate professional, I’ll be meeting new people, looking at more homes, eating well, working out and spending as much time with my family as I wish.

I’m taking home six figures per year.

I have the perfect work/lifestyle balance.

I live in my dream home.

I’m well respected.

This is UK Estate Agency as it should be, but why is this not the case for most? Estate agents in the UK work long hours, most of them earn between £18,000 and £25,000 pa, they have no work/lifestyle balance and the the public have a very low opinion of them.

It took me over 20 years to discover why estate agency is broken in the UK. Drop me a line and I’ll tell you why it’s broken and exactly what you can do to live the dream life of a Realtor, or as I call, “A Real Estate Professional”.

“Success is not a given, it’s for the taking.”

David Giles “The Property Guy

Buy-to-let tax changes explained

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Real examples of the BTL (Buy-to-Let) tax changes (aka section 24). Here’s a video explaining the changes and some examples of what the effects can look like…

How to pick the right estate agent to sell your property & which ones to avoid

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With such a broad choice of estate agencies out there to choose from, where do you start?

Online or High Street?

I’ll keep this short, DON’T use an online agent or one of those that charge a lower fee which is all upfront.

 

Real experience

I’m not saying that there aren’t some hard working estate agents out there; with good intentions, but most estate agents don’t even own their own home, let alone bought and sold investment properties. It’s very difficult for an estate agent to truly understand the needs and concerns of a homeowner or a landlord if they’ve never been through the process themselves.

 

Operating in sales and lettings

Many sales agents aren’t privy to the massive amounts of legislation surrounding the lettings industry, which makes it a risky business to instruct an agent that doesn’t also operate in lettings. Some firms do both, but you need to make sure that the person you’re dealing with is active and well versed in both sales and lettings on a regular basis.

 

Office location

Selecting the right selling agent for the job is crucial and don’t pick an agent based on their office location. This used to be important, but in this digital era, circa 98% of house sales now come from an online enquiry, via Rightmove or Zoopla for example. Therefore, it is much more important to find the best agent, not where the agent is located.

 

Lower fee upfront or a higher “no sale no fee”?

I suggest that you avoid the new hybrid agent model with their headline cheap fees. This business model has been designed to suit the business and not the customer. Although the sales fee is lower, you have to pay it all upfront, whether they sell your property or not. It has been proven many times over that this option will cost you more overall because of the ubiquitous lower sale price that this type of agent is achieving. They spend most of their time trying to find new people that want to sell instead of trying to sell your property, which is understandable, given the way the business model has been established. There is no financial incentive for them to try and sell your property or to assist the solicitors with the sales progression. Average statistics have proven that selling through this type of agent will not enable you to maximise your sale price, it will take you longer to sell and it will increase the chances of your buyer pulling out.

Here are some recent statistics that show how the average UK estate agent has been performing…

31.6% of property is reduced in price by an average of £25,000 before it’s sold.

The average property takes 91 days to find a buyer.

26%  of sales are falling through because the deals are not progressing forward quick enough.

 

I’m pleased to say that Embarq’s statistics make far better reading than the industry average (above). This is because we have a very broad knowledge on compliance, financial aspects and being market strategists as well as estate agents, we know exactly how to maximise the market place for each individual property.

 

You must not underestimate the importance of finding the right estate agent for the job. Quibbling over the difference in fees could cost you tens of thousands of pounds. Aside from all of the aspects mentioned in this guide, just the negotiation skills of an agent will have a huge bearing on the final price that’s agreed. Without blowing one’s trumpet, I have won numerous awards for negotiation, and other estate agency related topics, which I have taught to my incredible team at EMBARQ. My guys follow a rigid process that enables us to consistently achieve the best possible price for our clients. We more often than not negotiate the asking price and in many instances, even higher.

 

If you require a FREE market appraisal to find out what your property is worth for sale or for let, please don’t hesitate to get in touch.

 

Gina Jo Giles (formally Gina Jo Parry)

Buy-to-let mortgages – Part 2 – How to pick a mortgage broker

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Picking a mortgage broker is actually a really important part of your property investment journey, yet it’s something that’s often decided very quickly without much thought. This short video will explain how to find the best mortgage broker for the right situation and help you to avoid losing money on mortgage valuation and broker fees.

Buy-to-let-mortgages-Part-1-Can-I-get-a-buy-to-let-mortgage

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Whether you’re new or seasoned in buy-to-let property, this short video series on BTL mortgages should be useful to you. It’s amazing how many people don’t know that they can get a BTL mortgage. In this first video, I cover something called NO MINIMUM INCOME REQUIREMENT MORTGAGES and how mortgage lenders calculate whether they’re going to give you a BTL mortgage or not.

 

 

Buy-to-let mortgages-Part 3-How to pick a mortgage product

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There are so many mortgage products to choose from and it can sometimes be difficult to choose the right one. Some have lower interest rates and a higher arrangement fee and others have higher interest rates and lower or no arrangement fee. There’s a very simple way to work out which product is the cheapest, which you can discover in this short video.

Part 2 of 12 – The Basics – MORTGAGE BROKERS – Getting into home-ownership or property investment

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The Basics – Part 2 of 12 – Mortgage Brokers

Before I start explaining how to buy your first home, become a landlord or how to become a property developer, you’ll need to understand some of the basics first, otherwise, you’re likely to find the whole process confusing and perhaps stressful, especially when using unorthodox strategies to buy a home or property investment, typically for those with a lack of funds and/or good credit rating.

Throughout your property journey, you’re going to encounter a number of different professionals, which ones will depend on whether you intend on becoming a homeowner, landlord or property developer. Here’s part 2 of 12 on MORTGAGE BROKERS.

MORTGAGE BROKERS

Mortgage brokers can help you get the right mortgage, or not. Expect to pay them a fee for mortgage advice and then they’ll get paid again by the mortgage lender if they successfully get the money for you. Request a copy of their terms from the outset to avoid being sent an invoice for their time if you decide not to use them. In an ideal world, you find a broker that will only charge you once they’ve obtained a mortgage offer on your behalf. If there is a small fee to cover their time in the event of you changing your mind then this is not unreasonable.

If you can’t get a mortgage right now then you still need to know the role that mortgage brokers play in the buying process. It’s actually very important to get a good broker and this is no easy feat. Many of them nowadays simply enter your details into a system which then chucks out a few different lending products for you to consider.  Aside from a broker having access to a wide panel of mortgage lenders and products, you need a broker that has a deep understanding of lenders criteria and the process of the lenders underwriters. This will potentially avoid failed applications and aborted valuation costs. You’ll also want to select your broker based on the type of property you’re intending to purchase. This is because there are specialist brokers that should be used for specialist cases, such as help-to-buy applications, homes of multiple occupancy, bridging loans and development finance, to name a few.  Estate agents are often paid commission to introduce you to a mortgage broker so don’t expect to get a good one just because an agent is recommending one to you.

Part 1 of 12 – The Basics – ESTATE AGENTS – Getting into home-ownership or property investment

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The Basics – Part 1 of 12 – ESTATE AGENTS

Before I start explaining how to buy your first home, become a landlord or how to become a property developer, you’ll need to understand some of the basics first, otherwise, you’re likely to find the whole process confusing and perhaps stressful, especially when using unorthodox strategies to buy a home or property investment, typically for those with a lack of funds and/or good credit rating.

Throughout your property journey, you’re going to encounter a number of different professionals, which ones will depend on whether you intend on becoming a homeowner, landlord or property developer. I’m going to start off with ESTATE AGENTS. Takes one to know one…

ESTATE AGENTS

Estate Agents market properties for sale on behalf of sellers (vendors) in exchange for a sales commission, typically on a no sale, no fee basis. An on-line breed of agent has entered the house selling arena as of late, some of which charge a fee upfront, irrespective of whether they sell the property. Typically, an online agent is cheaper but they have no incentive to sell and it’s been proven; on average, that it’ll cost vendors more to sell with an online agent, because they tend to achieve less for the property. Like all industries, there are good and bad. Finding an experienced agent isn’t enough, you need an experienced and knowledgeable agent that’s proactive and up to date on all legislation, together-with access and the know-how of the latest marketing techniques.

You need to deal with both good and bad agents in order to maximise your opportunities. The grades and qualifications bar is set very low to become an estate agent in the UK which is why it’s plagued with the ubiquitous stereotype. If you want the best property deals from them, then treat them with respect, keep in regular contact and tell them what they want to hear in some instances.

Most want to know that you are serious and that you have the ability to complete a purchase swiftly. This is so they can get paid as quickly as possible. If you don’t have the money and/or the credit to be able to purchase a home or property investment in the traditional manner and you are intending on adopting one of the unorthodox strategies to enter the property arena, then you’re wasting your time and energy trying to explain your proposed methods to most of them. If they don’t understand it; which is likely, then they don’t want to know. You just need to submit an offer amount, in certain strategic ways, and then either try and arrange to meet the seller directly and/or converse your proposed strategy to them via your solicitors.

If you’re intending on buying, controlling or selling a leasehold property, then agent selection could make a significant difference to how the deal ends up. Leasehold is a minefield compared to freehold and there are many other specialist property types, such as HMO’s, commercial, land, mixed-use, etc etc, that should be dealt with by experts in these fields in order to maximise performance.

It also makes a big difference to deal with an agent that has a broad knowledge of the interconnecting industries, such as mortgages, conveyancing, tax, investment, strategy, planning and development.

You’ll be surprised how much VALUE you will gain from selecting an expert level estate agent over the alternative.

Watch out for our next post on MORTGAGE BROKERS.

David Giles – Partner

Selling A Tenanted Property

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One of the most frequently asked questions that I’m asked is,

“Should I evict my tenants before I try and sell my property”?

Many landlords believe they should evict their tenants before putting their investment property on the market, but I believe that it really depends on three factors:

  1. What are the tenants like?
  2. Will putting up the rent increase the selling price?
  3. Will the property appeal more to homebuyers or landlords?

1. What are the tenants like?

If your gut feeling is that the tenants are likely to put off prospective purchasers from buying, then I would consider evicting the tenants prior to marketing for sale.

2. Will putting up the rent increase the selling price?

If you’re going to sell your property tenanted, then before doing so, you may want to consider increasing the rent to the current market value. Many landlord buyers are driven by yield, so, increasing the rent prior to marketing will enable you to promote a better yield to your prospective buyers. You may even be able to achieve a higher selling price by increasing the rent.

For example: 

Current Rent – £1000 pcm (per calendar month)

Current Sale Value – £200,000

Current Yield – 6%

As an example, if you increased the rent by £50 pcm and a prospective landlord buyer has a minimum yield expectation of 6%, they might be prepared to pay £10,00 more (£210,000) because the higher rent at £1050 pcm still delivers a 6% yield. This isn’t always the case because house prices are also dictated by supply and demand. If the identical property next door is for sale at £200,000, then you’re probably not going to achieve £210,000, irrespective of the increased rent that your achieving. It’s worth noting that raising the rent to increase the selling value doesn’t work so effectively with single AST sales, in comparison to commercial sales, blocks of flats, mixed-use assets and HMO’s (Homes of Multiple Occupancy).

If you do decide to increase the rent then you’ll need to serve your tenant with the appropriate notice. You’ll also need to review the terms of your AST to determine whether any conditions are attached to this process. If you’d like my opinion on your particular situation then feel free to get in touch with me. Click here to contact Gina

3. Will the property appeal more to homebuyers or landlords?

The current market conditions alone can dictate whether you’re more likely to get your best offer from a home buyer or another landlord. The various market cycles can have a bearing on this but the property type and/or it’s value is going to be the main factors. As mentioned earlier in point 2, many landlords are yield driven so larger family homes are going to be less attractive to them as an investment. Remember, a property is only worth what someone is prepared to pay, so, if your property appeals to both landlords and home buyers, you should obtain a valuation for both instances. Often these valuations will be the same, but not in all instances. For an accurate market appraisal assessment, you will need to engage with an expert in valuation methodology, which you’re unlikely to find in the average high street estate agency. If this is something that you’d like me to assess for you then please don’t hesitate to ask. Click here to contact Gina

Eviction process

Evicting a tenant successfully isn’t a straight forward process. A high percentage of landlords and letting agents fail to do this correctly, due to the numerous complexities involved. I’ve even known solicitors to get it wrong and it can be a very costly process indeed. Invalid notices can delay evictions by months at a time and paying court fees twice or more is an expensive affair. Some tenants stop paying the rent when they receive an eviction notice which can really start to rack up the costs. With all of this in mind, it’s really important to use the services on an evictions expert. You need it to work on the first attempt and the whole process to be dealt with as swiftly and as smoothly as possible. Please feel free to get in touch with me if you’d like to discuss this process further. Click here to contact Gina

Length of lease (leaseholds only)

If you’re selling a property which has fewer than 82 years remaining on the lease, then this is likely to restrict your prospective buyers. Additionally, once your lease falls below circa 75 years, the number of potential buyers will decrease further and the value will begin to fall quicker from this point compared to when the property had a new lease. The obvious answer is to extend a short lease prior to a sale, but many sellers don’t have the available funds to do this. The good news is that there’s a solution to this problem if handled correctly by the right combination of selling agent and solicitor. Although this strategy is not commonly known by estate agents, it’s possible to offer a short lease property to the whole market; at the price it would be if it already had an extended lease, without having to pay for it before the property is sold and completed. This is a lengthy topic which cannot be covered in this short article, however, please don’t hesitate to contact me for more assistance on this matter. Click here to contact Gina

Conclusion

Some landlords will only purchase investment properties with tenants in situ because they want to start receiving rent from day one. Others may insist on the property being vacant for numerous reasons. Some home buyers will be put off by tenants living at the property – often because they worry about how long it might take for the tenants to leave whilst they’re waiting to buy and move in themselves. Sometimes frustrated homebuyers will decide to buy a tenanted property with the intention of evicting them straight away so they can move in themselves soon after. What many homebuyers don’t realise is that they won’t be able to get a homebuyer’s mortgage on this basis. They would need to first get a buy-to-let mortgage and then switch it to a homebuyer’s mortgage before they can move in. The costs of setting up two mortgages and redeeming the first one early just to buy a family home is not financially advisable.

Whatever the situation, it’s very simple and can be very effective to market a property with tenants in situ “IF” you have the right estate agent handling the sale. The wrong agent can cause all sorts of problems, especially those that aren’t privy to tenancy law and the terms of your existing tenancy agreement. For example, tenants require at least 24 hours written notice before access can be granted. Additionally, depending on which stage the AST has reached, you may not be permitted to carry out viewings at all. Tenants are entitled to “peace and enjoyment of the property” as well as other benefits detailed within the clauses of your tenancy agreement. You must ensure that the selling agent you instruct is totally au fait with tenancy law, which is unlikely if they don’t do lettings and even if the firm itself has a lettings division, it doesn’t mean that the agent handling your sale won’t breach the terms of your tenancy agreement on your behalf and expose you to litigation.

I hope that you’ve found this article useful and if you do have any unanswered questions or you’re looking for a competent estate agent and property manager to assist you with anything contained within this article, then please don’t hesitate to contact me.

Gina-Jo Parry

Sales & Lettings Manager

Click here to contact Gina

 

HOW ACCURATE IS THE ZOOPLA ESTIMATE?

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ONLINE VALUATION TOOL VS ESTATE AGENT MARKET APPRAISAL

An interesting question that some people ask is…

“Can I value my property online”?

It’s not possible to accurately value your property online because there’s not enough data available and the variables are too vast. Elements such as garden size, condition, restrictive covenants and leasehold status; to name a few, make it almost impossible to arrive at an accurate and realistic selling price. The property portal “Zoopla” have an online valuation tool but it relies on recent and comparable evidence. The only way Zoopla can get anywhere close to an accurate valuation is when a very similar property has sold on the same street in the last couple of months. More often than not, Zoopla is way out on its online valuation and should not be relied upon in any circumstances.  In any case, there’s no need to find an online valuation tool when estate agents are willing to come out to your property to provide an accurate valuation, free of charge in most cases.

If you would like a FREE valuation then one of our senior team members at EMBARQ will accurately value your property, taking into account all elements and variables. You can expect sound and honest advice from an industry professional with no pushy sales techniques and without any obligation to sell your property in Bournemouth, Poole or other Dorset location.

David Giles – Partner

Click here –> Contact David