Valuation, optimism and downright bad advice

26th December 2011

Valuing houses is a funny game. Let’s start at the beginning.

You own a house and you fancy a move. You ask a few agents to your house, they have a look around. Some measure, some measure and take photos, some (like me) just have a quick nosey to get a feel for the house’s size and features. Why not take all of the details? Well I need to find out what the owner has in mind and to weigh things up.

Is the owner looking for a quick sale or looking to achieve a particular price? Many people have a figure in mind, maybe they need an amount to afford a new house or to repay a mortgage.

Being honest with owners can result in not getting the business. It is natural to want the best possible figure but it can prove to be a total waste of time and effort if the price is set at an unachievable level.

More often than not the agent who quotes the highest price gets the business in the first place only to fail to sell.

Accurate pricing is the key to a sale. With so much information freely available on the internet these days it only takes a few minutes for a would- be buyer to look for comparables and work out what other houses are selling for. So if you are overpriced, unless you have something very special to sell, your house is going to stay on the shelf for a long time.

Bear in mind that pretty well every buyer will be looking for a mortgage, which will involve a valuer, appointed by the lender, visiting your house to ensure that it provides suitable security for the loan. Should it not then it will be down-valued, the buyer won’t get the required amount and the sale is unlikely to proceed thereby costing both parties a tidy sum in lost fees and charges not to mention spoiled plans.

Banks, Building Societies and their appointed valuers are being extremely cautious at the moment.

Valuations for lending purposes are well thought through and comparable prices of recent sales of similar properties are essential to a valuer when arriving at a recommendation. The process can be pretty ruthless.

So that’s what I’m weighing up when I give advice on setting prices.

I am trying to give as accurate a figure as possible, bearing in mind that it’s not much good setting out on a house selling journey if the destination will never be reached.

That’s enough serious stuff for now. Enjoy the rest of the Christmas break.

If you have heard any funny stories, stick them on our Facebook page.

All the best.

View more: Housing Banter

MP’s Slam Government’s Solar FiT Cuts

23rd December 2011

The Government received a second blow today over its handling of the solar Feed-in Tariff (FiT) cuts, after two influential committees of MPs described them as “unfair” to homeowners, damaging to investor confidence, and “seriously inadequate” in terms of assessing their impact on jobs.

The Environmental Audit Committee and Energy and Climate Change Committee also slammed Government proposals that would require homes to meet a ‘C’ ratedenergy efficiency standard before they could receive the solar subsidy, saying they would deliver a “fatal impact” on the solar industry. The select committees published their damning verdict in a joint report. It follows a ruling by the High Court yesterday, which said the Government’s plans on solar FiT cuts were unlawful.

In their report, the committees acknowledged the FiT for solar electricity needed to be reduced, but concluded that the speed and scale of the Government’s plans to cut the subsidies smacked of retrospective action and was undermining green policy and damaging the UK solar industry. The six weeks notice the Department of Energy and Climate Change gave installers and consumers was inadequate and clumsy, they said.

The Government announced on October 31 that it was planning to cut the subsidy for solar electricity installations by 50 per cent from December 12. The cut-off date for tariff reductions preceded the conclusion of a consultation into solar FiTs review, which ends tomorrow (December 23).

The select committees’ report is highly critical of the Government’s management of the review, saying it should have taken action earlier and describing the Department of Energy and Climate Change’s (DECC) monitoring of take up of the scheme as “deficient”.”Ministers should have spotted the solar gold rush much earlier. That way subsidy levels could have been reduced in a more orderly way without delivering such a shock to the industry,” Tim Yeo MP, chair of the Energy and Climate Change Committee, said.

Energy efficiency standard
The MPs calculated that 86 per cent of homes would need better insulation before they could qualify for the FiT under the Government’s proposals – increasing up-front costs for homeowners by £5,600 to £14,000, even before the panels are purchased.”Access to FiTs should not be closed-off by the need to improve take-up of Green Deal measures. Requiring the ‘C’ rated EPC energy efficiency standard could limit access to wealthier households,” the report concludes.Impact Assessment
The Government’s Impact Assessment, which the Government based its proposals on, was also heavily criticised by the committees. In their report they said, as well as being out of date at time of publication, the impact assessment failed to “address the consequences for the industry in terms of their cost of capital resulting from any reduction in investor confidence.”It appears that the Impact Assessment was produced and subsequently used to justify a policy decision that had already been made,” the report concluded.”The consequence of the rushed, eleventh-hour consultation will be uncertainty among investors in all kinds of renewable energy, which will inevitably push up the cost of capital,” Yeo said. “This is an extremely unfortunate outcome, because right now we need unprecedented levels of investment to replace ageing power stations and reduce emissions.

“The Government should build predictability into its energy policies and then stick to it. There should always have been a review mechanism for FITs that responded to falling costs.”

Recommendations
The report makes a number of recommendations. These include, developing a system to review and adjust FiT rates “in an orderly and timely way”; considering alternative energy efficiency requirements to the ‘C’ rated energy efficiency standard; and designing a ‘community tariff’ that takes in to account the wider impacts on community groups and social housing projects; and requiring electricity suppliers to provide annual returns on how much FiTs have added to annual energy bills. The scheme is paid for through household energy bills. The report calls on DECC to look at the budget cap on the FiT, which was introduced by Chancellor in the Comprehensive Spending Review, following the launch of he FiT in April 2010.

The committees also recommend that DECC and the Department for Business, Innovation and skills collaborate on finding a way to get the FiT scheme to encourage solar panel manufacturing in the UK.Reaction
Today’s report was welcomed by the Solar Trade Association chairman Howard Johns, who said: “We are particularly pleased the Committees have urged DECC to abandon the more extreme energy efficiency eligibility proposals (EPC-C) which could stamp out the UK solar market next year. They have also urged DECC to look at how the budget cap could be loosened under different budget classifications – that might sound a rather dry recommendation but it is an essential one if we are to retain a UK solar industry. The Committees have rightly pointed out that these changes hit social homes and communities hardest and have already hit confidence in the sector.”Cathy Debenham, founder of YouGen, a website that helps people find information on renewable energy for their homes and businesses, said she was “delighted” with the findings of the select committees report.”We have be calling for DECC to uncap the FiTs budget, extend the reference date for the introduction of the new tariff, set up a generous community tariff and drop the requirement for buildings to reach EPC (energy performance certificate) level of C to qualify for FiTs,” Debenham said.”We are delighted that these are all issues addressed by the committees and hope that DECC will take them on board. Given that DECC did not do a sufficient appraisal before including the Feed-in Tariffs in its spending review and capping the FiTs budget, we trust that they will revisit that decision and make more money available for this popular technology which is rapidly falling in price.”

High Court ruling
Yesterday, Friends of the Earth and solar companies Solarcentury and Homesun won a legal victory against the Government’s solar FiT cut plans, when the High Court ruled Energy Secretary Chris Huhne had acted unlawfully.

View more: Energy Performance Certificates

Happy Christmas to (all) our readers!

Well the shops are stuffed with people buying six loaves of bread etc., preparing for the one day when the shops will not be able to purvey their endless, good natured battle to get us to spend all of our money.

In the world of estate agency this is usually a quiet time when most calls to the office are to report dead central heating boilers and other problems.

This year, however, we have been quite busy. A couple of sales this week and viewings going on today and tomorrow.
We put a nice detached onto the market earlier this week, we have had an offer already. Good going!

Other agents had advised the owners not to bother putting up for sale till the New Year as nothing would happen until then.

This is the time of year when thoughts do turn to moving. Boxing Day can be good for online house shopping.
When you are stuck in the house with loads of presents that you can’t find space for, relatives taking up all of the comfy chairs and you are stuck in a corner on a foldy garden seat you brought in from the shed after dusting off the cobwebs.

Have a look on www.renownestates.com

Let’s hope that we all have a good 2012.

View more: Housing Banter

Renown cup cakes. Yum yum!! ht…

20th December 2011

Renown cup cakes. Yum yum!! http://t.co/AHhnpfZ3

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Yes Mr Smith! We are doing our best.

Yes I know you want a quick sale Mr Smith, But the market is a bit quiet over Christmas.
No, avocado suites are coming back into fashion, it shouldn’t put anyone off.
No lift? Well your flat’s only on the 7th floor so it will be OK for a younger buyer.
Storage heaters? They are still quite popular with people frightened of gas so that’s not much of a problem.
The wood panelling is a good insulator and, with everyone looking at green issues, the draughtproofing strip round the windows is a plus and the single glazing means that you don’t get that cloudiness that you get in double glazed units.
The dogs? So long as you scoop the big lumps up before you get a viewing and use a scented candle or two. Have you still got the four bull terriers?
The boxes stacked in the small bedroom could be piled up a bit more neatly if you have any spare time and may lessen the condensation and damp spots on the outside wall. It may be an idea to scrape the fat off the cooker hob too.
The price? If you want to leave it high it will leave room to negotiate. I think Your Move’s recommendation to ask for ” offers over ”
may be a little optimistic but “You’re the customer “.
And a Merry Christmas to you too Mr Smith. Let’s hope things pick up in the New Year.
Is this the fourth year we’ve had your flat for sale? Doesn’t time fly.
How many agents have you instructed? Just the six of us!
Ah well we don’t want to look like we are desperate do we.

View more: Housing Banter, Promotions & Offers

Touting for business. Yes or No?

14th December 2011

One thing we haven’t ever gone into is touting for business.

What’s that? Well, in Estate Agency terms it’s when one agent targets owners of houses that are already on the market by either sticking letters through their doors or bombarding them with leaflets and phone calls promising all sorts of quick fixes.

They usually suggest that they have several, scores or even hundreds of buyers on their books just waiting to buy your house.

It gets worse when the market is quiet as houses tend to be on the market for longer. In some firms the staff are all on targets and expected to do this sort of thing. If you have a for sale board in your garden you are fair game.

The truth is that potential buyers are more likely to be scouring the internet for a house, probably at home, probably in the evening when most offices are closed. They contact the selling agent after seeing something they like. In truth, no agent has control over this method of buying other than to ensure your house is publicised on a good web site, displayed with lots of good images and described as well and as accurately as can be.

Try searching for Renown on Google and you will find us top of the first page.

Of course theres a lot more to it than this but that’s often where thing start to happen. Buyers tend to register with every agent, although fewer actually visit offices these days according to national statistics.

We at Renown Estates aren’t too keen on touting.

Having been around in Cramlington for a long time and having probably sold more houses than any other agent in the town we don’t like it or need to do it, and we don’t think it’s very ethical. In fact, it’s frowned on in bettter circles.

As a Licensed Member of The National Association of Estate Agents (NAEA) and having been chosen (for the last 15 years) as the best local agent by the world’s largest Relocation Company, we work very hard to maintain standards and provide the best possible level of service that we can.

View more: Housing Banter, Promotions & Offers

First-time Buyers deserting Mortgage Market?

12th December 2011

Are first-time buyers deserting the Mortgage Market?

What!!

5th December 2011

Going to Birmingham and back on Wednesday by train, business not pleasure. Not first class mind you. Just checked cost against a return flight to Paris out of interest…

It’s cheaper to go to Paris.

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