BritishGuy36

I already lowered my expectations by 12% and still can't attract many offers, those that I do get are another 5% down on the already low asking price. Almost 20% off last year's price is crippling, you have to have a boatload of equity just for it to be even worth selling.

This only works if you have a very small mortgage at present (I presume this only applies to a minority) and a LOT of equity. You suggest taking on a BIGGER mortgage to release some equity? Then how are you supposed to rent it out when the rent you can get won't even cover anywhere near the bigger mortgage payment you just took out. It doesn't add up mate.

Englishmum

At least in the UK when you rent out your property, the tenant is responsible for paying their own Council Tax (We rent out our house in Essex and we do have to pay for the water rates, although there isn't a water meter, just a fixed monthly fee).

We investigated renting out our house here in New Jersey - my spouse is relocating to Singapore later this week on another expat posting - but our housing tax is just under $13,000 per year! If we were to go ahead and rent our house out, the income would barely - if at all - cover our mortgage and property tax and that's before doing any repairs or maintainance.

Also in New Jersey if a family moves in and then stops paying the rent you can't evict them (unless you prove that you're moving back in yourself).

The market is pretty flat here too. My best friend is desperately trying to move home to Australia and has a gorgeous six-bedroomed Victorian with a wrap-around porch, just 15 miles west of New York City. She can't find a buyer and has reduced the asking price from $639k to $589k. Compared to prices in Greater London this is an absolute bargain....but with lots of layoffs in Wall St people are reluctant to take on a new mortgage.

fatbrit

???

Mallory

[QUOTE=Englishmum;6768740]

At least in the UK when you rent out your property, the tenant is responsible for paying their own Council Tax (We rent out our house in Essex and we do have to pay for the water rates, although there isn't a water meter, just a fixed monthly fee).

We rent out 2 houses in the US. You adjust the rent so that the council tax is inside the rent - so the tenant IS actually paying it - to you, and then you pay the tax yourself. Not only are you then sure it has actually been paid, but it is also tax deductible. It is an expense of renting out the property. Also HOA fees, management fees, yard work, etc., are tax deductible on a rental.

So all in all, it is financially a better deal.

Jerseygirl

I have just purchased a house in the UK negotiating approx 20% off the asking price for a quick sale...it had been on the market for 3 months. The house had previously been 'sold' but the propective buyers couldn't get a mortgage.

If you want to sell your house you must list it at a realistic price for today's market. IMO now until spring is a bad time to sell a house in most parts of the UK.

BritishGuy36

Well the lady from the new EA just left. She appears confident, and says she can't understand why the house hasn't gone at the price we had it up for. Who knows if that's true or a blag. She said it was on too low (!?!?) and advised us to go back up £5k and says it will be back on tinternet by Friday ready for weekend viewer searches.

Here's hoping for some interest!

cranston

Good luck BG.

Let us know how you get on with new EA.

skydivingisfun

I am in a similar boat, i dont want to sell just yet so i contacted my lender and negotiated changing my mortgage to interest only this has bought the payments down low enough that i can rent it out and even make a few quid every month

BritishGuy36

Out of interest, can I ask what kind of reduction (as a percentage) does it work out at when you go interest-only?

Giantaxe

It may make a difference (and a lot of sense) to your cash flow, but if you think about it it makes no difference to your overall financial wealth whether you're paying interest-only or interest and principal. You may be paying more in the latter case, but as that additional amount is paying off loan principal, you are increasing the equity you otherwise wouldn't have in the house. Of course, you may choose to have that "wealth" as available cash rather than tied up in the house.

Btw, other factors to consider when renting are the loss of interest on any equity in the property, and the cost of insuring it.

Giantaxe

Yeh, but which spring?

Socal Local

Personally, I would be very sceptical about that. We rented our house out for 2.5 years when we first came over and put it on the market in the spring to try and sell before any capital gains liability kicked in. Having now seen a little of the RE market in the US I was surprised how much the UK estate agents seemed to use a 'finger in the air approach' for assessing the value of a property rather than looking at comparable recent sales like they do here. It does seem that this information is not quite as readily accessible but I found the site www.ourproperty.co.uk does report sale prices, although usually a month or two behind. We actually ended up going with the estate agent that gave us the lowest valuation mainly because he was the only one that actually based it on comparable properties. We then decided to list just slightly below the competition and sold in less than a month - interestingly the comp property we looked at took another 4 months to sell and eventually went for 50K pounds less than ours.

I realise that there is a lot of luck involved and that the market has changed dramatically for the worse since the spring, but I think cutting through the EA bull and working out what is really a correct price for the current market makes all the difference.

Englishmum

If we did that, then it would put the rental price way above the prevailing market price for a similar sized house in our area - it's very expensive to live in the New York metro area so rents are much higher than in many other parts of the country ...

We're just going to keep the house and my son will continue to live in it (luckily we can trust him not to turn it into 'party central' LOL! ). I'm going to be coming and going all the time, too.

Englishmum

To the O/P:

Perhaps you might want to take a look at (and perhaps even post your experiences or queries) on the forums here:

http://www.housepricecrash.co.uk/forum/

http://www.housepricecrash.co.uk/ (home page)

Giantaxe

Very good advice. I personally wouldn't use a real estate agent who couldn't back up their so-called valuation with recent real data for comparable sales.