Most of our customers are taking out bridging loans in order to purchase and develop a new property, flat or house. After spending thousands on renovations, one of the most important things is being able to sell the property at the end. After all, this is where the developer will exit, generate their real income and also be able to repay their bridging loan.
However, one must not take for granted that selling a home is easy. Depending on the property market and the taste of buyers, selling your newly renovated place is not a sure thing. Our guide below gives the best tips for selling your home on the open market, including the following:
- Get the right valuation
- Decide who is going to sell your home
- Get some kerb appeal
- Create a smell
- Give them room
- Choose the best buyer
Get The Right Valuation
One should not simply guess the valuation of their property when they put it out to market or take a valuation based on an online calculator. Some property experts suggest getting valuations from 3 different surveyors and getting their opinion in terms of how much you should put the property on the market for and who is the ideal buyer. Should you be pitching to families? The elderly? Getting the right amount is important especially that potential buyers typically bid underneath the asking price. (Source: Which.co.uk)
Decide Who Is Going To Sell Your Home
This is crucial when selling your home and the most obvious option is to try to sell through your local estate agent. They will know the area very well and what to expect, unless of course you know and live in that area already. Estate agents will also have some very interested buyers on their books already who will be looking to move, maybe chain-free. Not only can they provide you with signage to put in front of your house, they will also give your property exposure in local newspapers, magazines, shop windows and online portals like Zoopla and Rightmove. The only issue with using an estate agent is whilst they might be free or low-cost in the short-term, they tend to charge a sale fee of 1.5% to 2% and this can eat into your profits as a developer.
Other options include trying to sell the property on your own or using new alternative sites like Tepilo or HouseSimple where you pay a one-off fee ranging from £495 to £795 to put your property on property portals like the ones mentioned above. Whilst this is much lower rate and way to avoid estate agency fees, it means that you have to play the agent and show people around the house and book appointments etc. If you have all the information and the charisma to keep up, this can be a viable and cost-effective option.
Get Some Kerb Appeal
This is the term coined to make your house look good from the kerb. This includes making sure exteriors such as the front door, windows, paintwork, front garden and number sign all look presentable for passers-by and potential buyers. These very subtle and cost-effective changes can make a world of difference to the amount of interest that your property gets and since people like their homes to look nice, it can be the difference between a sale and not.
Start by putting some nice flower pots outside your home and making sure that your door looks spick and span. You only get to make one first impression, so make sure that it’s a good one.
Create a Smell
Similar to the first impression, visitors get a smell when they work in and the last thing you want is for it to be smelling like your domestic pet or kid’s football kit. Give the punters something nice to whiff on with a vanilla diffuser costing only a few pounds from your local supermarket. There are rumours that putting fresh bread in the oven or the smell of coffee can trigger the senses, making people feel at home and more likely to show interest.
Give Them Room
No one likes the homeowner cramping their style. It is important not to hang around or pester the visitors and get them the space they need to look around. It is also essential that you do not seem overly keen or desperate when trying to make the sale as this will give off the wrong vibes and make the buyer think that they can bid lower than necessary, eating into your bottom line.
Should You Try Getting Cash For Your Home?
There are a number of companies that specialise in giving you cash for your home and this allows for a sale within just a few days or weeks, compared to pre-longing for several months. Companies such as Nested and Ask Susan can assist with that quick sale and turn you into a cash buyer very quickly, but just note that they will typically undervalue the property for the convenience of a fast deal. In addition, they may have to take a view on properties with complications.
Choose The Best Buyer
Once the offers are on the table, your next big job is to choose the most reliable buyer. The best ones to have are those that are ‘chain free’ meaning that they do not need to sell their existing home in order to move into yours. According to statistics, 10% of property buyers in the UK are chain-free.
Being without chains speeds up the process massively and means that they have a good idea of how much they can afford and can also move in as soon as possible. Other good buyers include those in rented accommodation because it also suggests a quick move is on the cards. In addition, those that are cash buyers, meaning that they do not require a mortgage allows for a speedier process and fewer property chains involved.
What Happens If You Cannot Sell?
When you have used a bridging loan to purchase your property and make renovations, you will have around 12 to 24 months in order to make repayment. So the idea is that you make the sale before or around this time so that you can exit and repay your loan.
However, depending on the building work and the demand, there is always the chance that your development does not sell. However, you do have options:
Rent It Out
Rather than sell, there might be a bigger demand for tenants so you can always rent out your property on the open market. Your bridging lender will appreciate that you are still generating income and they will give you options in terms of making repayments.
Sell Through An Auction
If you are desperate to sell, you can auction off the property through the different auctioneers and houses. This has become big business in the UK and through auction finance, people have to complete the entire sale within 28 days or risk losing the property – so it is an effective way to move your estate. The only issue is that people typically go to property auctions to get a discount so you may find that your asking price is cut by 20%.
Refinancing
Bridging lenders will commonly allow you to refinance your loan if you do not sell by the end of the loan term. Of course, there are several factors that come into it such as the state and condition of your project and your plans for it. The terms will likely be different and less favourable, but it still gives you some extra time in order to sell your property and generate a high return.
