Tuesday 16 January 2018

Improved outlook for sellers

Timing can be crucial when it comes to selling a house and, while there appears to be a shortage of homes in some key markets, now looks like a good time for some sellers to take advantage in areas where prices are on the rise.

This is especially so for those market sectors where the shortage could be reversed when banks increase their sales of repossessed homes.

Remember, while apartments may dominate buy to lets, this sector also includes family houses.

During the boom, sought after areas such as Dublin 4 attracted buy to let investors and already receivers have been selling a number of those.

Traditionally most sellers wait until after Easter to launch their houses on the market as the gardens look nice and Spring's feel good factors lift the spirits of buyers.

As a result April and May can see increased supply and so sellers face more competition from neighbouring or similar houses in the late spring and early summer.

In this current market where many rural sectors continue in the doldrums this may also be an opportunity for senior Dublin home owners to cash in their chips in the capital and take advantage of the widening price gap by downsizing to a smaller home in a regional town well served by transport links.

This would also allow those with equity in their homes to invest such funds for their pensions. Likewise for those in families in large homes they may be able to sell and reduce their mortgages to more manageable levels.

There are signs that some banks are beginning to facilitate such short selling investors.

For some of these people the prospect of banks foreclosing on 37,000 buy to let investors whose mortgages are in arrears, could present an opportunity.

This segment of the market is also expected to be weakened by extra supply from amateur landlords whose interest only loans have come to the end of their terms or those who can't continue to dip into their ordinary income to make up the rental shortfall on mortgage repayments.

On the other hand some observers argue that fears of a glut in over supply and its attendant downward pressure on apartment prices is exaggerated.

These observers will point to the strong interest in buy to lets seen at Allsop Space auctions.

In addition rents have been rising in parts of Dublin and Galway which will improve the viability in these key areas. Furthermore it's not in the interest of the Irish banks at least, to sell off such properties at a time when prices are down by over 65pc.

On the other hand Keith Lowe managing director of DNG reports signs of new cash rich investors waiting in the wings to snap up buy to let bargains. They are seeking opportunities to avail of the holiday on capital gains tax should they buy before the end of the year and hold onto properties for seven years.

Which ever way prospective sellers read their cards in the current market, in any case they need to prepare their ground work carefully and especially their paperwork.

For instance they need to ensure that they have checked that any extensions they may have added to the property comply with planning legislation.

Once the decision is made to sell you should contact your solicitor to get the deeds and check that they are in order.

If the attic or garage has been converted and an extension has been added ensure it is within the 40sqm limit allowed without planning permission. If not, you may need to apply for permission for retention.

In addition you will need to have the energy efficiency of the house checked so that it can receive a BER certificate. BER inspectors may suggest inexpensive ways to improve the energy rating of the house.

But Rowena Quinn of Hunters estate agency says that in sought after sectors of the market there is no sign that low BER ratings have any effect on either the price or the saleability of a house.

On the other hand not having a BER ready can be a disadvantage.

DNG agent Brian Dempsey recalls how one buyer who agreed a price for a house subsequently found that the house had a lower energy rating than he expected.

He then demanded a price cut because he would have to spend more than could afford insulating the house.

"It's best to get the BER certificate in advance so that the buyer can have no reason to try to renegotiate the price," Mr Dempsey advises.

Irish Independent

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