Our first property sale

Hey! 

Soooo I have been away from the blog for quite some time :-/ I guess life just took over, so I would like to bring you up to date, starting with the sale of our first property.

I suppose we could have quite easily stayed in our first property for another five years comfortably, but with the change in mindset, this was just not something that we wanted to do. We were really keen to move onwards and upwards and work our way up the property ladder and get stuck into property development. 

One of the biggest decisions to sell the property was the fact that we were part of the ‘help to buy’ government scheme, where they lend you 20% of the property purchase price, so that you have to obtain less of a mortgage. This was perfect for us at the time of purchasing the property, as my partner did not have his self-employment finance ‘books’ in order as such, and as you know, mortgages are only offered on the profit of someone who is self-employed; whereas mortgages are offered on the full wage of a full-time employed person like myself. 

The trouble with the government help to buy scheme is:

1. That you do you have to start paying monthly interest on the amount after five years (which does not come off the balance, it is additional); ours was about to be approximately £50 per month.

2. Unless you have enough profit within the property to remortgage it and pay off the 20% of what the property is worth at the time, then you can easily get stuck in a rut in the future.

3. The ‘help to buy’ loan has to be paid back in either 10% or 20% chunks.

4. The loan amount increases with the sale price of your property, so the government make money on your property value going up e.g they get 20% of what your property is worth at the time of sale.

So in principle the help to buy government scheme does help you get on the property ladder, but it can also easily become a bit of a property trap if you’re not careful.

The sale of our first property took approximately 9 months from start to finish (a lot longer than first anticipated for a new build). During that time we switched to a different estate agent after 4 months, as we didn’t feel that the first estate agent was doing enough. Always being one to save money, I managed to negotiate their estate agent fee down to 1% of the sale. Despite a drop over the winter in prospective buyers, we had numerous people in to view our property but it was either "too small" or was their "2nd choice" out of many properties. Obviously this was very frustrating, as you have to rush around and tidy the house to make it as presentable as possible for every viewing! Feedback on presentation of the property was always that it was presented fantastically, so that is great to know for future.

As we were so keen for the first property to sell and we had been offered the price that we wanted, we did agree to finalise the sale before we had fully purchased our second property. I don’t know whether this was smart or not in hindsight, as although the sale happened quickly and we didn’t lose the buyer, it meant moving in with my partners parents until the purchase of our second property had gone through fully and we could move in.

Naively, who knew how hard it would be to try and find a temporary residence (1-4 months) for a young couple with a clean dog. Before moving in with my partners parents we had looked at every other possible option, but had no luck whatsoever; there is certainly a huge gap in the market! 

We were of course very lucky that we had the option to move in with parents and anticipated that it would only be for a couple of weeks while our purchase went through, but this turned into just over 3 months! I think the delays were mainly down to the fact that 1. the seller was quite old, so not only did she take a long time to complete paperwork and send it back/needed help 2. there were problems with her obtaining the full property sale rights following the death of her husband a few years prior 3. She did not push the urgency to her solicitor for them to act fast.

It was a bit of a nightmare having to stay in a spare room with our large dog, me working from home a couple of times a week, me being away for four nights on a hen do and my partner being away for four nights on a stag do separately. I think by the time we travelled to KOS for a week for my brothers wedding we were at breaking point, particularly with our possessions in storage for the whole time, this turned out to be a massive headache and a big cost. By the time we got to the end of our week away, we had informed them we were about to pull out of the purchase, funnily enough it was completed within a couple of days after that.

LESSON LEARNT: always move out of a property and into the new one on the same day, no matter how scared you are of losing the buyer!