Property expert, Phil Spencer, reveals the tricks of the trade when it comes to buying and selling your home…
As Phil Spencer will tell you, buying a home is one of the biggest investments of your life. Getting it right is about doing the research, spending lots of time going through everything with a fine-tooth comb and knowing what you want right now – and in the future also.
Phil advocates house buying as a move to be made as soon as you are in a financial position to make it. And once you’re on the housing ladder you can start moving up it – the tough part is getting on the first rung.
‘Buying a house is about taking on 25 years of debt. It might be tedious having to carry out extensive research to make sure you have all the information you need so you can make the best decisions, but I can’t emphasise enough how important this is. What’s more, you must tailor your research to match your needs – everyone’s criteria is different.
Buying a property is about what you want, what you need and what you can afford. There is a huge amount tied up – emotionally and aspirationally – in the properties people buy. There are lots of dreams attached to your purchase. Everybody thinks they know what they want but often, what they end up with is often quite different from that.
If you’ve seen a property you love, don’t let that cloud your ability to make a sensible and rational decision because if you do, you may well end up regretting your purchase and you certainly won’t feel at home in the house.’
Phil’s top tips for buying
In an ideal world the objective is to out perform the market, so how do you find a property that is likely to make you money?
‘Essentially, you need to buy a property you can improve in terms of layout and fittings, a property that you can extend, or one in an area that becomes more popular while you’re living there,’ explains Phil. ‘The best opportunities combine all these key elements. The well-worn mantra, “Location, Location, Location”, remains the unalterable truth. It is often the case that up-and-coming areas are adjacent to locations that are already popular. Most buyers will be prepared to compromise a little on where they live in order to buy a larger house – hence the ripple effect. Even in mature markets, you can still find a few postcodes that are surrounded by more expensive property.
‘If the architecture in these areas is strong, but the neighbourhood has historically been considered shabby or unfashionable, then the anomaly in values is likely to correct itself at some point,’ says Phil. ‘Today, Hackney, in East London, has become the Chelsea of the 1950s, with the largest concentration of creative people anywhere in Europe. The architecture is good, as is the transport and there’s even some green space.
‘Another buy-signal is Government spending. Cardiff is a recent example of an area where Government-incentivised investment has caused property prices to rise. Urban regeneration schemes, such as the one underway in Liverpool, will improve trade, travel, retail and housing. As it becomes an attractive place to live, demand, and prices, will rise. London’s Elephant and Castle is to have £1 billion spent on it, which will have an enormous effect in years to come.’ Phil also reckons patience is a virtue. ‘Take the London Docklands development of the 1980s,’ he says. ‘The area didn’t take off until the long-delayed transport links were established. Transport links are essential, so look for improvements to road or rail.
‘Other signs of a mini-boom include a small increase in the number of consumer-led businesses, such as gift shops or a smart café. Builders’ skips and scaffolding outside houses are also good signs, as is the proximity to good schools, advises Phil.
And, according to Phil, you’ve probably missed the boat if you see a surfeit of estate agencies, bars, bric-a-brac shops, neat lawns and Montessori nurseries. When it comes to specific properties, look for large plots and outbuildings that you could convert.
Properties that meet most of the above criteria are most likely to attract attention, and least likely to require lots of phone calls, ads and viewings, to sell.
‘Any property can be a good deal – if you buy at the right price,’ advises Phil.
Phil’s top tips for buying
‘The first step is to consider your target market. Who do you think might buy your property? Then try to tailor your space to appeal to the main group without alienating other groups that might also be interested.
‘If you feel a professional couple would be ideal occupants, then leave the second bedroom as a bedroom – rather than a study – and make a space for a work station elsewhere in the house.
‘Potential buyers need to imagine themselves living in your house, so get rid of ornaments and photos – especially posters in children’s bedrooms. Put things you don’t really use on a daily basis in the attic or into storage. Large pieces of furniture should also go into storage as this will make rooms feel much bigger. Clear away clutter in the hallway, hide all your products in the bathroom and clear the surfaces in the kitchen.
‘A fresh coat of neutral paint, new tiling or lino, and a couple of new kitchen doors can do wonders to smarten up a tired-looking property.
‘If you’d rather not re-decorate, it is still essential that the house is spotless. Getting industrial cleaners in to make your home sparkle is money well-spent. Have the carpets, sofa covers, oven and windows cleaned while you’re at it. Pay special attention to the kitchen and bathrooms, which need to be inviting and hygienic. Finally, the garden is now seen as an additional room, so be sure to make your garden feel like a great space for entertaining and relaxing.
‘Always try to get three agents to value your property. Don’t necessarily go for the one with the highest valuation, or the one that you may also buy through – this is an old trick used to win clients. Many agents will often try to tie you into a 12-week exclusive contract – negotiate the minimum
time possible, so that if you’re not happy with the service, you can change. It’s a good idea to instruct a solicitor to do your conveyancing early. Ask him to prepare a draft contract and apply for the title deeds, while you pull together all your own paperwork on the property.
‘Given estate agents’ fees, it’s cheaper to sell sole-agency rather than multi-agency, so I recommend staying with one agent for the first four weeks and giving them the best chance and motivation to sell your property fast.
‘Always have a board up, and tell your neighbours – word of mouth is a powerful tool. You never know who might live just around the corner, waiting for your house to come on the market.
‘The person who offers the highest price is not always the best choice. Listen to your agent’s advice on buyers and push your agent to find out as much about the buyers’ circumstances as possible.
‘How are they financing the purchase? Cash buyers are best, but if, like the majority, they are raising a mortgage ask to see
a mortgage “in principle” letter from their lender. Are they first-time buyers? If so, they will need some hand-holding by the agent and could protract conveyancing. Do they have a related transaction? If they have something to sell, then it should be under offer before you take your property off the market.
‘Your agent will be the middle man and should present every offer that is made. Make sure you insist that he has all the background information to hand on the potential buyer’s position and their ability to move quickly. Ask that offers be made in writing.
‘The longer it takes to reach the stage where you exchange contracts, the higher the chances of the deal falling apart.
‘Keep in weekly contact with your solicitor and agent to ensure that the channels of communication stay open. You need to be kept informed of where the conveyancing is at, and how your buyer is feeling about the progress.’
‘There are thousands of mortgages available from different providers and it can be a bewildering task to find the right deal for you,’ admits Phil. ‘Start your search with your bank or building society. Then, widen it to include the Internet. You should also onsider a good independent financial adviser.
‘Read the small print in the details to see if there are penalties involved, should you be in a position to pay off your debt suddenly or want to switch providers. You want the mortgage money now – and probably as much as you can get – but think about how making the repayments will affect the way you live.
‘What you need now and what you’re going to need can be directly affected by the mortgage deal you take out. There are tempting offers that promise low rates, cash back and mortgage holidays, but are these facilities what you really need?
‘The fact of the matter is you don’t get something for nothing. The banks are businesses and they operate to satisfy the profit wishes of the shareholders. You should demand and expect good service – don’t allow lenders to baffle you with overcomplicated deals.’