It was recently reported in the media that asking prices had been cut by 5% but homes were still failing to sell. The research comes from Rightmove, the country’s biggest property website who say that sellers have reduced their asking price by an average of 5.4%, compared with one year ago. However, this would appear to be nowhere near enough as agents say that sales are being agreed at around 20% lower than last November. The large gap between the two is the reason that most sales are currently falling through.
Some ingenious estate agents are now combating the slump by arranging house-swap parties. One such agent is the Edward Mellor group, based in south-east Manchester and Cheshire, who invite sellers to discuss what they are looking for and what they can offer over a cup of coffee or a glass of wine. The scheme has been something of a success with up to 50 people attending each event and the office in Marple, near Stockport, having completed 10 swaps – which equates to 20 sales.
So how does the process work? Well although it is termed a “house swap” it is more of a house match and is essentially two sellers agreeing to buy each other’s houses. The beauty of this process is that it is a closed loop with no chain and is therefore much less likely to fall through. Although the basic swap involves two sellers it can often be a three-way “swap” or even, in the case of the Cornerstone Estate Agency in Yorkshire, an ambitious five-way swap with the owner at the top end of the market buying the cheapest property to ensure that the sales went through.
Knight & Rennie in Leamington Spa now run a “lonely-hearts” club for houses and have arranged three swaps since September. They believe it is just as important to advertise what the vendors are looking as well as the details of what they’re selling. Property swaps are treated as normal sales for tax and legal reasons and, just like a normal sale, the parties involved will agree a price, arrange a survey, arrange a mortgage where necessary and organise a completion date. Stamp duty is payable as usual, as are agent’s fees; house “swaps” are particularly palatable for the agent as they will receive two sets of fees for every one the complete.
If you think that a house swap may be the way forward for you here are some points to be aware of:
• Go for an agent with a history of successful “swaps” and make sure they now exactly what you’re looking for
• House swapping can be highly localised – the best swaps happen with a ten-mile radius
• Go into it with an open mind and you’ve got to be ready to compromise • There are also specialist websites that you can register with such as homeswapper.co.uk and partexmyhome.com
• Continue to view properties whilst you try to sell your own to alert agents of your interest