Mr HomeFinder

New Promotional Video

Posted on March 19th, 2008 by Administrator.
Categories: Uncategorized.

I know that I have been quiet recently but I have had new franchisees to look after. I will be back soon with more opinion of the property market. In the meantime please enjoy our latest promotional video.

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Property Auctions, do you know what you are getting?

Posted on January 14th, 2008 by Administrator.
Categories: Investment Property Advice, Property Advice.

I am going to put my cards on the table right from the start; I do not like property auctions. I don’t like the fact that the whole process is weighed in favour of the vendor. I don’t like the fact that your legal team are given 28 days to complete contracts, regardless. I don’t like the fact open viewings are arranged and a pack mentality is encouraged to over hype the property. But, most importantly, I hate the fact that dirty tricks are used at the auction to ensure that buyers are paying more for property than they should do.

I have been to a number of auctions in the five years since running Homefinder UK, I have seen first hand some terrible practises and have been told of situations that have arisen that would make your toes curl.

I once attended an auction in Huddersfield and half way through a very interesting occurrence happened. A standard property was under auction and the opening bid was quite a way below the guide price. The auctioneer was raising the value quite steadily with one of the prospective buyers sat four rows directly in front of me and to the left of the auctioneer. You have to remember that a property auction room can be full with 200 plus people and you very rarely get to see who is bidding on property; you only get to see the successful bidder when they give their identity number. The auction came to a very quick stop whilst the auctioneer was waiting for the guy in front of me to raise his bid, he wouldn’t he had “stuck” and refused to “twist”. It transpires that he was not bidding against anyone else. The auctioneer had invented a fictional buyer to make the genuine buyer pay more than he needed to. This is known as bidding against the wall and is not as rare as you would think. The auctioneer was now stuck as he did not have a genuine buyer at the top price and had to declare what he had done. The only genuine buyer was asked if he would honour his last bid, to which he obviously responded with a resounding “NO”. That property did not sell and was withdrawn from sale, many people got up and left the room at this point and those who had already bought were left wondering whether the same trick had been used on them.

Guess what, the same auction company ran another auction 4 weeks later and there was no action taken against them. Surely they have somebody to answer to over this course of action. No. Bidding against the wall happens at property auctions and there is nothing there to stop it happening. Sometimes the auctioneer gets found out, but not often enough and nothing is ever done about.

I had an email this week from a client of Homefinder UK who went to an auction to buy a plot of land to build his family home on. We have spent ages trying to find the right piece of land and we all thought that the one for sale at auction just before Christmas was the right one. His experience at the event has convinced him never to try to buy a property at an auction again. With the obvious detailed information taken out this was his experience. “Of the lots only one sold under the hammer & that was the land adjacent to the property. After the auction had closed, I then discussed with the auctioneer the possibility of purchasing the house only. He confirmed that the lot was still for sale & for me to call him first thing the next morning. While waiting in line to speak with the auctioneer, I overheard the owner of one of the lots for sale thanking a wealthy friend of his for trying to get the bids underway and also trying to push the price upwards. This made me nervous, so I left the auction to speak with my financial advisor. I called the auction house the next morning to make an offer, only to be informed that the house had been sold the day before just after the auction had closed. Thinking back on reflection, there seemed to be a hidden agenda & things didn’t feel right, so maybe a blessing in disguise”.
So even when auctioneers are not inventing buyers, the vendors are getting people to sit in the auction and inflate the prices. Can somebody help me out here and explain why we accept this is being reasonable and allow it to continue. More importantly, how could we ever control it? How do we know who we are bidding against and know what their motivation is?
The worst situation I have come across however is a client of mine who was recommended to us after a bad experience at an auction. One of the nicest guys you would ever want to meet and one who was royally screwed by the owner and the auction house. He attended the open viewing and liked what he saw, calculated in his head what he would want to spend at auction and packed himself off to try to secure his first investment property. He felt that he got a fair price and when the hammer went down he had exchanged contracts on his first investment property of a portfolio that he was looking to build. Unfortunately, he found out that afternoon that three days before the auction the house had been vandalised and had been set on fire. He had effectively bought a shell of a house which had severe fire damage. Here’s the killer, the vendor and the auctioneer knew this before the auction had started and did not declare it. The guy had exchanged contracts and now had 28 days to complete under the terms of the auction or risk losing his deposit which was already paid. This is when it got extrememely legal and the last time I spoke to him he was still waiting for his costs to be reimbursed from all of the parties who had wronged him.
So, again ask me if I like auctions. No, No and thrice No. Auctions are not a level playing field for the purchaser of a property and that is the person who I am paid to represent. I am sick and tired of purchasers getting the rough end of the stick with property and always question why a property is at an auction in the first place, why do I get 28 to complete. I would like time to do my legal due diligence and fully appreciate what I am spending ten’s or hundred’s of thousands of pounds on. The market is slowing and there are fewer buyers around now so hopefully this will see the tide turn.

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Equity Release, where is the money?

Posted on January 9th, 2008 by Administrator.
Categories: H2B Magazine, Property Advice.

There are many stories at the moment about the credit crunch and mortgage lenders who are “tightening the belts” due to lending to the so called Sub Prime Market. So with this in mind is this the end of lending by these companies? Well not really when you consider that these companies only really make money when they lend money. They buy in money, either from other institutions or from the saver on the street, and then they sell it to borrowers at a higher rate. The difference between the two is their profit and careful management of this process makes it a very rewarding industry.

With the fact that we are entering a time where un secured lending is being closely scrutinised and even lending where there is little security, like 95%-100% mortgages, are more difficult to get the lending market is going to have to look at more secure lending to continue their profit projections. Enter the Equity Release. Equity Release is a safer (in the lenders eyes) market for mortgages as there is a track record of the customer paying the existing mortgage and the amount of security as a percentage of the value of the property is usually kept quite high. But what does Equity Release mean to you as a borrower.

There are many ways that money can be borrowed and as usual the element of risk for the lender is matched with the interest rate you pay. If you are not a home owner and you take out an unsecured loan then the lender is exposed to risk so they will look to temper that risk by making more profit. If you own your own home and there is a difference between its value and your liability against it (your mortgage) then you can re-mortgage your home for a higher amount and release some of the equity. Not so long ago this was thought to be a no-no from a consumers point of view as the money would be repaid over a 20-25 year period and the costs would be drastically higher than if the same amount was borrowed over a 5 year agreement on an unsecured basis.

House prices have risen drastically over the last few years so there are more and more home owners who have equity sitting in their home. Advertising from the lenders has been directed at these people to encourage them to realise this money and not wait until selling the property. Homeowners are now using this money for a multitude of purposes, to enter the investment property market, to extend the property, for improvements to specific rooms, for cars, for holidays, for private school fees, deposits for dependant’s property purchases and the numbers of borrowers is increasing.

It is an easy way to get your hands on extra funds but always remember that you are increasing the lenders claim on your property and there is always big writing on the bottom of the forms “Your house is at risk of repossession if you fail to keep up loans secured against it”.

Just ensure that you do not risk the security in your property and that you take independent advice before you cash in this “easy money”.

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2008 a New Year, the year of the property expert?

Posted on January 7th, 2008 by Administrator.
Categories: Investment Property Advice, Property Advice.

There is an old adage of paying your money and taking your chance in life which means that you can never guarantee the result and the property market for 2008 will almost definitely fall into that bracket.

It is all too easy to call yourself an expert these days and there are so many outlets to promote yourself as such. I can assure you that there is nothing more annoying than an expert sprouting absolute bunkum when you are sat there reading the drivel. I cannot watch property television programmes any more because I just get too angry with the advice given. The final straw was a couple being advised that a west facing garden offered all day sunshine, when these guys were meant to be working for the buyer not selling to them. This weekend I saw an article which promoted turning a bedroom into an en-suite whilst failing to mention that this could potentially reduce the value of the property.

These experts create a forum for themselves to talk about where the property market will go over 2008 and none of them ever agree on the issue. So, during this year which side will be right? The train of thought that the property market is artificially high due to unprecedented growth over the last 5 years which now leaves property unaffordable for the majority of buyers. This will lead to a drop in valuations of property. Or, the experts that are saying that there is a huge property deficit at the moment and with the influx of migrant workers into the country there will continue to be a shortage. This shortage will lead to a rise in valuations of property. Here is the where you pay your money and take your chance.

Every time I am asked to give advice and guidance to clients I always ensure that it is their decision to purchase anything when they are ready to do so. I have spent millions of pounds of others peoples money and my own personal conscious, makes me make my client do their own research and satisfy their own mind first. Property throughout 2008 will not follow a national pattern, it will become a much more regional economy so localise your property advice gathering.

There is no expert out there who gives a money back guarantee on their advice and you have to remember that it is your money that you plough into a property whether it is for investment or for a place to call home. Nobody truly knows where interest rates will be in 9 months time (although we all take our guesses) but you can do your own research before you buy a property and that is what you will have to hang your hat on. Trust your own judgement and not those who have their own self publicist agenda.

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What is Wrong with the UK Property Market at the Moment?

Posted on September 12th, 2007 by Administrator.
Categories: Property Advice.

Where do I start on this one? There are far too many things with Property at the moment and these Home Information Packs do not solve any of them.

House in Harrogate

Valuations of properties. When you view a property that is being sold by a selling agent do not assume that the asking price is a valuation because it isn’t. It is an asking price; it is a proposed purchase price. Proposed to you by a property professional who is working for the seller. A property professional who is not regulated and somebody who will dictate to all parties how the process of buying the house will go. They will try to dictate to you when you will view, judge your ability to buy and of all things control the negotiation of any purchase.

How can this be fair? A company who represent the seller controls the negotiation. Why can’t you deal directly with the buyer? How can an unregulated agent hold the aces when you are trying to buy your new home?

There are many tricks that are used when trying to get the highest price for a vendor which include fictitious “other buyers” who are marginally higher than your offer, insisting that you get approved by the selling agents mortgage advisor so that the agent knows exactly how much you can afford to pay and deliberately undervaluing properties to create a Dutch Auction which spirals out of control.

The property market at present is a buyers market and with information available through the internet a buyer can combat these tricks to ensure a fair price is paid, but why should they have to. Use the websites that tell you exactly how much the vendor paid for it and get them to justify the rise. Have they carried out work that improves the quality or size of the house? Has it risen in value higher than the national average or are they just being greedy? Some Estate Agents “overvalue” properties just to get the instruction to sell, why should you overpay for that? (Note the quotation marks around overvalue as I still have an issue over who values property). Go forward with a researched offer that due to your research is a more accurate valuation than by the vendor, there is now now reason why this cannot be done.

If the powers that be truly want to sort out the property market then they should offer real solutions to real problems not use the HiPs to shepherd in the European Legislated Energy Performance Certificate. A good opportunity lost.

You can always read more of my property rantings at my website www.mrhomefinder.co.uk

I will post more concerns over property and how as the consumer we can correct them tomorrow.

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HiPs for 3 Bedroom properties should have been delayed

Posted on September 11th, 2007 by Administrator.
Categories: Property Advice.

So here we are, Home Information Packs are now law for every property with 3 bedrooms or more marketed for sale. I have spoken to a number of other professionals within property who had hoped that a period of time relecting and ironing out problems would be taken after the first line of implementation.

4 Bedroom properties have already been subject to this new practise and 3 Bedroom properties were to follow. Well now they are here and the market has not had the time to solve the issues that have been raised and believe me there are issues. Many of you will be aware of our high profile arguement with the DCLG that was played out finally on Working Lunch on BBC2. Homefinder UK ended up with a great deal of lost marketing on mis-advice from the Department which had given us clear advice that was reversed on the day of implementation through their legal team.

Recently there have been concerns raised but certain lenders that they will not accept seaches carried out by companies instead of ones directly sourced by the councils. Not a threat to the system fully, but a potential problem. There is also another issue with searches that relate to their validity dates. This is a problem that I have raised with the DCLG of a number of occasions and you will be flabagasted to learn that their reply was “Not our problem, that is not part of the legislation but an issue for the lenders”. Well sorry matey it is a consumer issue and it could mean that both parties are paying for local searches when previously only the buyer has paid.

The Home Information Packs are the right problem as a property purchase is too reliant on goodwill but they are the wrong solution. They do not attack the problems that they claim to, they will not speed up the proces and they will not save the consumer money.

I have even spoken to some people inside Trading Standards who had hoped that the implementation of 3 bedroom properties would be held off to allow time for the system to “bed in” and give them the find ways to work it. Trading Standards are the guys who have to police this new legislation and those I have spoken to there do not see this as the fantastic remedy that the Government and the Department believe it to be.

I often wonder why this has been driven through in the way that it has and why it is in the face of those who work in property all day every day (and I don’t just mean the selling agents). I have heard that there is a legal challenge to them and would certainly add my concerns to any case brought.

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You have been quite vocal about the implementation of Home Information Packs. Surely you should be in favour, if they benefit the buyer.

Posted on August 9th, 2007 by Administrator.
Categories: Wakefield Guardian, Property Advice.

Weekly Newspaper Column

If this new legislation genuinely benefited the buyer I would be shouting louder than most about why it should be implemented. When you break down the Home Information Packs it is my view that they are of no real material benefit to the buyer at all. After the Home Condition Report was binned the pack became pointless and mainly of no value. As mentioned in previous articles, Green Issues are big issues at the moment and the Energy Efficiency Certificate could be of value to buyers. I am confused though over how many buyers will take these certificates into consideration when buying a house, it has been projected they will do so I will wait to be proved wrong on this. Also if I hear one more professional or government representative comparing a house to a fridge (as these have certificates) one more time I will not be responsible for my actions.

The local searches currently do hold up the process on occasions but putting them into a pre-marketing pack is not the answer as they have a shelf life in the eyes of the mortgage lenders. A vendor will now have to have local searches in the Home Information Pack for the buyer, but they are a requirement of the mortgage lender and always have been. Some lenders consider a 6 month old report to be invalid as the contents may change, others consider 3 months as being out of date. If a property has not sold quickly then it is possible that at the point of completion the buyer’s mortgage lender will not accept the searches as being valid. The buyer will have two options:- To pay for the searches again or to take out an insurance policy against the invalidity through a third party. So no real cost saving there, my advice would have been to make the process of applying for the searches by the buyer quicker, cheaper and more transparent. Give the buyers solicitors and the local councils 10 days to get the information in place, this way they would be sure to be valid and would stop both the vendor and the buying paying for them.

The Home Condition Report was the original reason for the pack’s introduction as it would tell prospective buyers what was “wrong” with a property before they would make an offer to buy it. This was designed to stop long drawn out conveyancing where the buyer would find out about damp, movement or any other problem that would require money spending. Again in principle a good idea, but the Council of Mortgage Lenders would not accept them so they were thrown into the bin. Now the Home Information Pack tells you nothing about the condition of the property and a buyer will have to wait until their own valuation survey as they always have done. So no change there and no time saving on the process time so the brief that this is to save time to stop deals falling through is folly.

There is a need to put the Energy Efficiency Certificates as that is European Legislation and in this current climate where Formula 1 cars tell you how green they are anything that is linked to stopping global warming will be implemented. Everything else in the new laws are a waste of time and effort, I only hope that somebody will see sense and wait before this is rolled out beyond 4 bedroom properties. Then we can take stock of where we are and sensibly sit down and pick apart the worthless changes and get rid.

There are many people out there who work in the property market and deal with the issues on a daily basis, it is amazing that their views are ignored when dealing with this difficult problem.

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As a first time buyer what should I look for?

Posted on August 2nd, 2007 by Administrator.
Categories: Wakefield Guardian, Property Advice.

Mr Homefinder’s weekly news column

As a first time buyer you have to realise that you are one of the most powerful buyers in the property market. You will be entering the process un-encumbered, which means that you do not need to sell a property in order to purchase one and your lack of a chain will be appealing to the vendor. You do however need to make sure that your niaivity in the property market is not taken advantage of and I would advise you to use technology to fill the gaps in your property buying experience.

Finding the right house is the most important part and do not shy away from a little more hard work before you say yes to a property. First time buyer properties do sell quite quickly and when you find the one that you want you should make sure that you don’t lose it but do not be pressured or rushed into making a decision or making an un-necessary high offer. There are currently at least 41 selling agents who cover this area and these range from high street estate agents to internet based selling portals. You really need to check as much of the market as you can before you know whether that house really is the right house. Also what happens if there is a private sale of a similar house around the corner which might suit you more. Regardless of your tastes and requirements I would seriously doubt that the one you are seeing is the ONLY property of its kind, so take your time. Investigate all of the options and make your jump when you really know that the house is right for you.

I recently located an apartment for a first time buyer and there were four apartments available in the block that he wanted. He was able to take the time to view all four and decide which package worked best for him. This included the price, the location within the block, the layout of the apartment and the space available. He was then able to compare all of the relevant information and decide which one worked for him and use the others availability to secure a purchase price that he felt was fair and correct. In the recent past, when the property market was more buoyant, he may not have had the choice or time to do this but now the market is working in the buyers favour. Be confident that you will be able to do something similar when you are looking.

More importantly though is the other information that is available to you via the internet and if you haven’t already looked you will be very surprised who valuable it will be to you. Wouldn’t it be great to find out how much the vendor paid for the property, available on the internet. Also great to find out how much house prices have gone up in the area, available on the internet. How much a similar house sold for a few months ago, you get the idea by now. You no longer have to rely on information giving to you by the selling agent, you can verify it yourself with websites which include the Land Registry website. Much of the information is available free of charge but some reports cost but what is more important £4 or committing to over £100,000? There are also many websites which collate Land Registry details are present them in various formats. Registering is usually required but is generally free so with some time using a computer and a phone line you can arm yourself with enough information to help you to formulate an offer.

The most important thing to remember is that advertised asking price is exactly that. It is not a valuation it is a proposed selling price generated by the vendor or their agent you do not have to agree with it and should only ever use it as a guide. Ignore old stories that you should go for a 10% discount you should go for what you consider to be fair and affordable. Never feel under pressure or inferior just because you will be dealing with a company who deal with property every day, always quantify what is being said to you and check up on this as much as possible. If you are told that there are other offers in on the property then you can ask for this to be quantified, although you will never be able to get full details of an offer you need to make sure that they are genuine and not used to make you pay more.

First time buyers it is time for you to stand up and use your position of power to make sure that you can afford to get onto the property ladder. Use the information available on the internet to fill the gaps in your property knowledge and realise how appealing you are to a prospective vendor.

In the words of the great Citizen Smith “Power to the First Time Buyers”. Well nearly!?!

(For those first time buyers who are too young, think Ben Harper from My Family 30 years ago with very strong views)

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Should Houses be built on flood plains?

Posted on July 26th, 2007 by Administrator.
Categories: Wakefield Guardian, Property Advice.

This is a very topical question and this is now at ministerial level with pressure being applied to the government to come up with the answers. The answers that I have seen so far from the powers that be say that some building will continue on land that is at risk from flooding and I do find this slightly baffling.

The whole Green Issue is high on the agenda and rising water levels would seem to be a bi-product of the Global Warming that we are warned is on the way. Many television news reports have centred on local residents saying that they have “Never seen it like this before” and the widespread nature of the problems does certainly seem to be quite worrying. Families have lost their valuable and sentimentally important articles, in very unfortunate incidents people have died as a result of this wettest of British Summers.

We have properties that are already built on flood plains and whilst ever the drainage cannot cope with the amount of water that hit these shores we will continue to have problems. Therefore the planning to ensure that these properties are better protected is essential and getting rid of the water if it floods could and should be easier. The fact that these properties have sat in water for days after the rain has come is as bad as the fact that they flooded in the first place. We were extremely lucky in Horbury Bridge recently as the flood defences held and the local flooding plain did its job. Other areas in West Yorkshire were not as lucky and poor planning could have been to blame for this.

So why do we have to continue to build on these areas that are at risk the next time we get one months rain in one day? I’m not sure that we actually do. As an Island nation we do not have unlimited resources when it comes to land to build on but we still have a housing shortage. The new Prime Minister is continually talking about plans to increase the stock of houses and to make them more affordable for first time buyers and flood plains do not seem exempt from the plans. There are areas of the country that are protected by Green Belt restrictions and building properties (or extending them) is nearly impossible. These restrictions are there to protect the rural nature of style of living and have been very successful in maintaining the character of the landscape especially in Yorkshire.

With the events of the last two weeks in both the north and south of this country it is now imperative that planners appreciate all aspects of where the houses are built and their long term prospects. Would it be better to build new developments in the path of a swollen river just because it is Brown Field development land or would it be better to take this opportunity to re-assess which areas are protected by Green Field restrictions. With insurers now refusing to cover some properties due to the risk of flooding and home-owners the ones who will lose everything it is time to confront this issue. We are constantly told how to avoid Global Warming, but with incidents such as the flash flooding that have hit then surely all future new developments should be built out of harms way. It would not make any sense at all to say that we already have a problem with houses built in areas at risk and that will now continue to build others. For the ones that are in these areas of risk we should look to improve ways of making sure that the water that falls gets dissipated as quickly as possible, that home owners are not at risk and therefore can insure their properties. For all other new developments we should consider the warnings of the experts who say that waters are rising and with greater frequency, let’s build houses away from these risks.

I only hope that decision makers share this common sense approach.

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I have some land and would like to sell it to a developer, where should I start?

Posted on July 19th, 2007 by Administrator.
Categories: Wakefield Guardian, Investment Property Advice, Property Advice.

There are a number of ways that you can sell property or land to developers and each different way will bring you a different price. You can sell as the property stands, without planning permission but with the potential and some developers will take the risk that they will be able to get planning permission later on. This will be the quickest way of selling the land but it will also be for the least money. Wherever there is risk involved developers will balance it with money and they will look to pay less for a property where planning has not been granted. A buyer may want to put an option or contract on your property which will mean that they will buy it subject to them getting planning permission. Again there is a risk on the developers part as they will pay for all of the application costs but the risk is tempered by the fact that are not purchasing the property unless they get the planning permission.

You could apply for outline planning permission before you look for a buyer, this is to get a principle that a development can take place and give an indication of size of the development (although on occasion it can be listed as unspecified number of dwellings). Outline planning permission is a part way step towards building on land and will give the developer more piece of mind as they will now know that they will be able to build on the land. The amount of money that you expect to get will be higher than before as you have reduced the risk for the developer. Outline planning has a value which depends on what the outline is, if it is specific in that it details how many properties or how big a property can be then there is very little left for the developer to do. The main risk has now been removed and you will receive a higher price for your property.

The last stage that you could take the development to would be full detailed planning. This would include very detailed plans being submitted to the planning department that would detail every aspect of the build. This is quite costly as you will have to pay architects along with the submission fees but will maximise the value of the land. With full detailed planning you will be giving the developer an immediate start on the project and this will mean that they can “push the boat out” with the purchase. This is all relative of course as they will still need a profit margin in the deal, but with all of the risk removed and an ability to start immediately then their capital will not be tied up into a project for a long time.

Each different stage will suit a different type of buyer as there are many developers out there and they all prefer different types of projects, some prefer the high risk – high return. Some are not in a position to do this with their lenders so have to buy projects that already have planning permission granted and get a lower return.

The first thing you will have to do is to decide at which point you are going to sell your land, whether you want the high return and apply for planning permission yourself or whether you would like to sell it with the potential of planning to be achieved by your buyer. If this is your choice of selling then expect a lower amount of money for the land that you have.

For an idea of whether your land will get planning you can visit the planning department at your local council. You will be able to find out whether your property is in Green Belt land and whether your application is worthwhile through a pre-application enquiry. Make sure that there are no restrictive covenants on your property that will stop any developments, then make contact with a good architect. Make sure that you use a good architect that understands your requirements and will work well with the planning department. RIBA are the regulatory body for architects so try to make sure that your architect is a member.

There are a wealth of buyers out there for the right project at the right price, I work on behalf of a number of them and know how desperate they are for good development land. Remember though they do not do the work for no return, they are all looking for a profit margin as a wage for them and their staff. Find a developer that you can work with and you trust. Do not get messed around be somebody who starts to play around though out the purchasing and starts to chip away at the price and prolongs the process of buying.

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