How to buy and sell a house in under 4 weeks
The new TFS Towers
Update 23rd April 22:00 – (Yes that’s 1 day after I published this post) – We got a call that the vendor has been made redundant today! So everything is up in the air and we may not be moving just yet. There is a chance the guy can find another job quickly but convincing the mortgage lender will be the tough ask I think. We remain hopeful yet stoic about the situation. Anyway… what I have written below is obviously all still relevant, but I thought I would just add in this note to keep everything transparent on the blog. As I say shortly into the post… how about that (damn) property market, eh!!!!?
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I’m starting to sound like a broken record recently but I will start off by apologising once again for lack of regular posts. The reason, as I have kinda half mentioned before here, is that we have recently “closed on a house deal” as property guru’s like to call it, so I thought a post about that was in order, seeing as this is after all a personal finance website, and buying a house is likely the biggest financial deal most folks will ever do.
So, how about that housing market, eh!?
You may be wondering what the hell has happened in between the post where I mentioned we got a flat evaluation, roughly 4 weeks ago, and now? Well let me sum it up:
Things are moving very quickly in the property market right now!!!!
I guess that much is obvious, but I reckon you’d still be very surprised at how quickly things are going right now if you put something on the market yourself. In less than a month we went from “thinking about moving” – to getting an evaluation – to putting the flat on the market – to having offers accepted on both sides. Almost unbelievable, especially considering that as first time buyers back in 2009, it took us about 3-4 months to even find anywhere we liked. To say things were “a bit slower” back then is like saying Mr T has “a mild distaste” for air travel.
How we found what we wanted so quickly
Well aside from the luck of draw in terms of what came on the market playing a part, along with the number of properties being churned right now, the main trick was to narrow down our options thus making the choices we were faced with a lot easier. We did this by imposing fairly tight criteria on what the house had to be:
- Had to be within a 10 minute walk to a train station (due to my train commuting). There are 3 stations in my town, but 1 of them is much more preferable to be near due to it being more of a mainline station. TFS Towers ticked this box nicely as it is near the “best” station.
- We don’t like newer build houses so all of those were out – TFS Towers is not one of those.
- 3 bedrooms minimum – Tick
- Nice sized garden – Tick
- Price between £200,000 (wishful thinking) and £250,000 – Tick, just about!
Some extra “nice to haves” were:
- South facing garden – Tick
- South facing roof for possible solar installation – Tick
- No Major renovation work needed before moving in – Tick (Kitchen is fine, see more pics below, bathroom may need doing in the next year or two)
- End of terrace or Semi-Detached – Tick
As you can see it ticked all of our boxes and them some! Compared to other houses we were looking at on Rightmove and then subsequently seeing in the flesh, there has been no comparison. I’ve even kept looking afterwards on rightmove, risking torturing myself if something better came up (I have called this game Rightmove Russian Roulette 🙂 ) but nothing so far has come close and I am getting happier and happier with our decision to put the offer in every day.
I think to sum it up, it is a fine balance of having a tight criteria, but not actually being too fussy at the end of the day if you want to execute a house move in a short period of time.
Pulling the trigger
We were not 100% on the house after we saw it for the first time, so it was quite hard to pull the trigger on putting the offer in. The thing was, we knew this house would get an offer because they had over 10 viewing on the day we saw it, and we knew how quickly things were going. We had to make a decision that night otherwise someone else would be getting this house. We mulled everything over and looked again at rightmove at similar properties, both ones that were currently on the market, and ones that had recently been sold (Tick the Sold/STC box in the search options). Again… nothing really came close; similar houses from my point of view seemed to start at around the £270,000 mark yet this one was up for £255,000. Based on the pure hard facts and the price it seemed like we had no other choice but to put in an offer. The next decision to weigh up was whether we offer the asking price or undercut. My thinking was that this house was priced to sell at the asking price, so, we offered it (£250,000 plus £5k for fixtures and fittings, this is just within the limits that are “allowed” to avoid paying the higher rate of stamp duty)
Did we get a bargain?
Well, I’m not going overboard but I would say we’ve got a pretty good deal. I will reason this by looking at a few of the other front runners we looked at:
- £280k 3 Bedroom mid-terraced house – This was in tip top condition and had a big extension on the back, a cavernous kitchen, plus some nice decking in the back garden. However all of this was easily reflected in the price. Our main objections were: 1) A bit too high in the price range, we could have easily afforded the mortgage payments but it’s not all about affordability! 2) It actually felt a bit too big for just the two of us, and I could imagine the bills being unnecessarily high. 3) Mid-terrace so garden was kinda overlooked. 4) Was an 18 minute walk to the (good) station according to google maps, which was a little over my comfortable commute. (Note: I’m not worried about the length of the walk, it is just the extra ~20 minutes I would be losing from my day every day that I know would really grate on me after a while!)
- £230k 4 bedroom mid terraced house – Sounds like a snip and looked great on paper but it needed a lot of work doing when we went to see it. Easily £15k worth. And this was despite a recent kitchen and bathroom overhaul, which weren’t really to our style, so that would have been wasted on us. The 4th “bedroom” was a loft conversion which wasn’t up to standard and you’d just have used it like a normal loft, i.e. to store junk. Plus it was a mid-terrace, the garden needed a lot of work (broken fence panels, etc…) plus it wasn’t near the good station, which I would put a price premium of around £10k on, both of personal value to myself and just by looking at the prices around each area.
- £215k 3 bedroom mid terraced fixer upper – We wanted to look at all the options and are not afraid of some blood, sweat and tears to get the house we wanted, so went to see a fixer upper. This needed everything doing to it, windows, carpets, kitchen, bathroom, garden. Easily £25k worth of work we estimated (Maybe could be lower, but these things always tend to go over what you originally think). So we’d have ended up paying all of that out of pocket and ended up with a house that was maybe worth £240k judging by other prices, so about breaking even, but minus a lot of spare time to plan it and fix it all up. Plus we’d have to live somewhere else while doing it. Not very convenient. If I’m fixing something up and putting all that work into something, I want to be making or saving a tidy sum on it, not just 5-10k here or there.
So there you go, each to their own as they say but in our opinion TFS Towers won the race by a fair few furlongs.
Spotting Value and price Anchoring
Why do we think it was underpriced compared to others on the market? Well my dear readers, the answer was that the vendors needed a quick sale. I get the feeling that the other people viewing this house and making offers did not take this into account, and were more swayed by the initial price that the house was put on Rightmove for (£255k). This is called price anchoring, and it’s a psychological trick used by Thai market traders, amongst many, when bartering. They start at a ridiculously high price in the hope that the final price you agree on is slightly higher than it would have been if they hadn’t started the bartering so high. I think in the case of putting the offer in for TFS Towers the opposite effect was in force. Nevermind that this house was potentially worth £260k or even £265k – most people still went through the usual motions of putting an offer of £5k (or more) under the asking price. The alternative scenario of course is that we’ve been done up and smoked like a kipper and are shortly due to be eaten for breakfast by the vendors in their new McMansion they’ve moved into with our cash, but I think I’d rather believe scenario A for now, at least until further evidence arrives to the contrary 🙂
Probably the quickest flat sale in the history of the Universe?
We put the offer in on a Tuesday, to be told by the agents that we needed an offer in on the flat, with no further chain, by Saturday, yes that is 4 whole days people!!! Naturally we were hopeful yet not very confident, but ended up catching a bit of luck (or maybe it was our frantic hoovering and tidying up the night before all the viewings that did it!) and got an offer in on the lower end of our asking price on the Saturday. So we sold for £175k. Maybe we could have held out for £180k or even £185k, but the reasoning was that if this deal fell through and we ended up getting a similar house for £265k we’d be no better off, so we accepted. Done and dusted within 4 days, boom!
Mortgage Dilemmas
With the plethora of mortgage options out there it can be a right old minefield, so let’s quickly go over the figures we were working with:
Sold flat for: £175,000
£££ Left on mortgage: £106,000
Equity from sale: £69,000
Moving fees including stamp duty: £7,000
Deposit on new house (with a slight top up from our savings*): £62,500 = 25% deposit
Value of new house
*Note we are also paying the £5k for fixtures and fittings out of our savings as well as you can’t tack that onto the mortgage.
Having a 25% deposit, or 75% LTV, whatever way you want to look at it, seems to open up the door to some fairly decent rates. I even played around with the online comparison sites and put it down to 50% LTV and the rates did not really improve all that much, so I think 25% is the tipping point, so please note that down if any of you are thinking of remortgaging soon, try to get your LTV down to 75% before doing so if you can. Hopefully this will be easy enough with recent rises in value, unless you bought at the last peak (in which case, I feel for you! 🙁 ).
So after a brief forray into looking at interest only mortgages and discovering you pretty much had to be a millionaire already to get one, we were back to the standard fixed rate repayment options of:
- 3 Year fix @ 2.39% – Monthly payment £830
- 5 Year fix @ 3.09% – Monthly payment £897
- 10 Year fix @ 4.14% – Monthly payment £1004
The balance to strike here is between the lower rate and the safety of the fix. The 10 year one is a serious contender in my view as interest rates can only go one way right now, and in 5 years time even that could look like a bargain – check out ermines article here if you are part of my generation that has never experienced an interest rate hike.
A chilling cautionary tale indeed! However, it is one I did not heed.
We reasoned the 5 year fix was just a half way house so decided to go with the lowest rate and payment for 3 years, which is a fair amount of time to continue saving up our nest egg and see where we are after that. Compared to the 10 year fix we can save an extra £174 a month, which works out as £6,264 over the 3 years, which we can use to pay off extra principle, put towards a Buy-To-Let property deposit, or put into an ISA. I think 3 years is not enough time for interest rates to sky rocket, so I am hoping we can reassess the mortgage market when the time comes without jumping onto a hugely higher fix. Then might be the time to lock in a 10 year fix (if they are even available!). If you are interested, all those mortgages are with Yorkshire Building Society (and I have no affiliation with them, in case you were interested in that as well).
One other thing you will have to weigh up… whether to use a Mortgage advisor or not, I don’t know what your thoughts are but at £200+ to effectively search the internet for me, I think I’ll pass. Anyone got any reasons why this is complete financial buffoonery?!
Solicitors – Online Cheapo’s or Expensive recommendation?
The final piece of the jigsaw before we can exchange contracts, in a couple of weeks hopefully, is getting a solicitor to do all the conveyancing work. We went with the online cheapo quote, but this is not just being tight. In my (very limited) experience, conveyancing solicitors are really quite slow at getting on with things, and getting back to your queries, so why would I want to pay £750 for that, when I can get someone who is just as slow and pay them £350? Again, comments welcome on my logic here.
The only thing I want to make sure I avoid is a complete scam company that could put the deal at jeopardy, so a bit of due diligence on the internet weedles those ones out easily. In the end we went with a recommendation from the Money Saving Expert forum – Don’t worry, it wasn’t from a first time poster with a name like “gba27891099”, it was a regular poster with over 1000 posts, so I assumed it was a geniune recommendation. Anyway the company was Gordon Brown Law Firm and the quote was cheap. Please do not take this as a personal recommendation from myself though as we have only just sent off all the paperwork! Do your own research as always!
So that’s it! We’re done and sorted in under 4 weeks! And I get my evenings back to write some more posts for you lovely people, until we move of course, then it gets really hectic! 🙂
Here are a few more pics of the new TFS Towers for you to envy over/laugh at (delete as appropriate depending on whether you live in bedsit crack den in London or a country mansion in the Cotswolds):
Discussion (45) ¬
Well, congrats on your purchase/sale. Hope the next few weeks go smoothly for you.
With yourselves being the, ahem, prudent type, I am thinking you would benefit massively from your next mortgage being an offset product.
Personally an offset has saved us over 15k in the last ten years.
It is still insane how ‘hot’ the UK property market is at the moment, and just don’t get me started on house price inflation. Who does it help? My first house? 4 bed end of terrace bay windowed Victorian in Bristol. 2 cellar rooms, small garden and a garage. The price… 114k!!!
Cheers! I hope so too.
You’ve mentioned the offset in the comments before and I did consider that because of that (thanks!). With the three year rate being so low I didn’t think it was worth it, as I put the figures into the offset calculator on Money Saving Expert and there wasn’t much difference. But I will look at it again next time we come to remortgage as I am guessing the rates may be a little higher, and I will probably want to guarantee a return, whereas over the next 3 years the plan is to save aggresively and put it in some potentially riskier ventures, such as BTL, and whatever else comes about 🙂
Oh, & on mortgages…. if you know what you want in the future & are confident to go it alone, make sure you get paid to do so: i used this company on my last mortgage & the service is really good http://www.moneybackmortgages.com/
I guess with the offset, it all depends on how likely you are to have chunks of cash savings growing over the years: if the plan is to leverage your first “beyond safety net” savings 25K or so into buy to let, then the benefits of offset will be less. For us, Mrs LCIL is self employed, so she always needs somewhere to accrue her tax bill, so an offset is the perfect choice for that.
Also getting 70% LTV looks like a milestone in the current offset market: you can get HSBC’s base rate plus 1.49% lifetime tracker which is hands down the best option in the market at the moment, from what I can tell from a quick search.
It looks like you have plenty of house there for the 2 of you btw…. you’ve done a wise thing not buying bigger (& more expensive) in terms of your FIRE plans.
Ohhhh…!!! I knew I should have done a post about mortgages before getting one to throw it out and there and gain some of the internets wisdom. Lesson learnt there! I could have gotten £188 cashback it said.
With the offset thing, I guess… basically the answer is yes, there won’t be too much of a safety net sitting around in cash, initially at least, so the benefits will be minimal. While we are saving we are getting 3% at Santander and I will probably open up 4 of the new Lloyds accounts to store another £8,000 (you can have two each for some reason up to £2,000) which is offering 5%, so that trumps offsetting anything at 2.39% easily (or 2.59% as the offset version would have been). In 3 years time there will be a re-evaluation; a lot can change in 3 years as we all know 🙂 Maybe I will be self employed by then and the tax bill storage thing comes into play
I’m not so sold on the trackers. On the face of it they are a great deal but if/when rates start going up again the fixed deals could take over pretty quickly. For the loan we are getting the HSBC only works out at £37 a month less than our 3 year fix, and we would have had to come up with another 10k+ which we could probably just about do as my bonus is due in June, but we wouldn’t be left with much, if anything, in our savings. This moving business is a costly enough affair as it is isn’t it 🙂 and I’ve already earmarked my bonus to buy some solar panels, if the figures work out in our favour.
Nice pad, enjoy!..
Thanks Nick!
Looks like a great place you got yourself there and for a bargain too! Cant wait to get on the property ladder, looks like it will be another six months from now though.
You make the process look so easy, good luck for the next few weeks; we’ll be moving into our new rental in 2 weeks too!
Thanks Joe! It seems everyone is moving at the moment be it into rentals or buying, it’s the moving season I guess. Good luck with your move. Sounds like you are doing very well to be able to get on the ladder in 6 months – kudos!
I don’t think it’s always this easy, we’ve definitely been lucky (and let’s not forget it could still fall through, we haven’t even exchanged contracts yet… gulp!) but sometimes I think people do make it harder than it needs to be and procrastination can set in.
I think the current market is helping in that sense as you know if you see something you like you have to go for it, no messing about.
There were also many late nights looking at rightmove, researching the mortgages, piling over spreadsheets, and looking up solicitors, and filling all the paperwork in. Running this blog has definitely helped me as my spreadsheet skills have been polished up a great deal since getting into the PF blogging world, plus I’ve absored a lot of knowledge from other sites/blogs, which is great.
Oh and not forgetting the time we spent going to see properties, but that is the fun part 🙂
Congrats and well done on such a quick purchase and sale! The house looks great from the pictures but I do always forget how expensive property is down south…
In fact, when it comes to getting your BTL, have you considered getting property up north? Less capital gains when you sell but potentially greater rental yields, which might be better since it’s regular passive income that you’re after? Just an idea maybe to think about.
With regards to mortgage advisors, when I got my BTL, the best rates were only available via such advisors, but if you’re happy with deals that you find on your own, then no need for them.
Thanks weenie!
You read my mind with the BTL, I was indeed thinking about buying somewhere outside of the South East, probably the Midlands, unless property prices start to sky rocket there before we can muster up a deposit. My thinking is to spread risk and buy a few low price and hopefully higher yeild properties, and don’t worry too much about the price appreciation as you say.
Also I will go back to our mortgage advisor when it comes to that point as he was actually very helpful, and was happy to go through him with an IO mortgage, until I found out that they are really only available on BTL properties (unless you are already loaded) and the mortgage we got you could only apply through the internet anyway so it seemed a bit silly finalising it through him. We’ll send him a bottle of wine to say thanks though 🙂
certainly the right choice on the distance from the train station: a 20 walk in British winter drizzle is a bad way to start a working day! We live about a 3 min walk to the station platform – & then it’s just 10-12 mins to London Bridge on the train or 20 to Charing Cross. It’s great!
Yea I certainly know about that, and it extrapolates the pain even more when you’ve got an hour train journey ahead of you! 10-12 minutes sounds like heaven, although I don’t think we’d be able to afford where you live by the sounds of things, unless there is an ultrasonic train line to Northampton I didn’t know about? 🙂
3 bed with a small garden will this year set you back £550K plus in our impoverished part of SE London i’m afraid. It’s insane, & as I’ve said before it doesn’t help anyone in my opinion. I’m sure if you look up the sales history of your new place on Zoopla it most likely will have sold for £40,000 or less 15 years ago. This kind of house price inflation is crippling to the broader economy as it leaves us all with less money to spend on other goods & services.
Back to the point of the comment though: despite living right at the train station, I’ve actually quit using it & I cycle all the way to work these days. Saves me about £1000/yr net, though of course some of that gets spent on bike upkeep, but then much of that would be spent anyway as I cycle a fair bit my spare time too.
Congratulations on the new abode. 4 days….wow! I hope you’re very happy there.
It’ll be interesting to hear how this additional debt affects your plans to be financially independent within 5 years?
I was going to write a bit about that, obviously an extra 80K (+Interest) worth of house to pay off is going to make a big impact, but I’d already written 2000+ words and figured I would leave it for another post. Cheers!
Congrats on house purchase. I moved in 2006 and it was about 5 weeks from house going on the market and it selling and having an offer accepted and I thought that was quick! My mortgage is with Yorkshire Building Society and have always found them very helpful. My last remortgage, I went for a 3 year offset to help my plans to pay off mortgage super quick. Fingers cross for you and Mrs TFS that everything runs smoothly and nobody cocks anything up for you!
P.S Hope the trampoline is included in the fixtures and fittings, very good way to keep fit!
Thanks MrsFinancialFreedom!
As I’ve updated, there has already been a cock up.
Good to hear YBS are a good bunch if/when we finally get things back on track though. Thanks!
Re: The trampoline – I recently got a second hand one on a Facebook group for £15 and put it up in my mums garden for my sisters kids. I had a go on the Sunday just gone, fantastic fun indeed, the best £15 I ever spent I think! 🙂
Congrats on your purchase!
I took a similar approach in terms of looking at location, travel requirements etc, and wanting somewhere that doesn’t need work. People thought I was mad writing a detailed, ordered list of priorities, but I think anyone who DOESN’T clarify exactly what they need in advance is mad. Once bought you can’t easily un-buy – best to get it right first time. When we found the house, we knew it was right as the planning & research beforehand clarified it.
I’ve been a serious landlord for ten year (25+ properties) and you’ve done really well in terms of buying fast. Four weeks with a mortgage is very good. The buoyant market is definitely a wind at your back, but you’re obviously super organised too and even in this market most purchases will take longer.
My criteria for a solicitor is always a fair price but FAST & pragmatic. House purchases are usually fairly simple (despite solicitors wanting us all to think it’s witchcraft), so as long as the mortgage is offered, the sale is fairly straightforward. If needed you can even forget local searches and buy an indemnity policy. For a good solicitor I always tell people to find a solicitor that handles auction purchases for investors – auction purchases usually MUST be done in 28days, or the 10% deposit is gone, so solicitors that know how to do these don’t mess around. I think the last one was about £750 inc VAT and all disbursements. I once used a solicitor who halted a purchase because there wasn’t a FENSA certificate for a single window – I instructed her to buy it anyway as I didn’t care and the purchase was at risk. She refused, demanding (on paper) my written authorisation to bypass this “important” requirement. Those kind of solicitors are a nightmare – no-one wants to risk losing their dream home over a single uPVC window!
I always use a mortgage broker, and I always pay them. For me, for the sake of £200-500 it makes no sense to not have help with the hardest, slowest and riskiest part of buying a property. Sometimes brokers have access to deals not available elsewhere, but for me the more important thing is if there’s an issue, someone is there to help who has contacts with the lender, knows their processes and has experience in solving problems. With my home purchase such an issue reared it’s head – although I’m quite experienced with property I couldn’t see a solution and I expected to lose the house, but my broker found a creative solution within all the rules, and it was sorted out. The trick of course is to use a good broker with experience, not some inexperienced idiot with a big tie knot in an estate agents. My agent has a huge portfolio of rentals so has experience with her own assets and loans. Of course some mortgage deals are ONLY available direct, so it is important to do your own research. Another advantage of brokers is they know the (written and unwritten) rules of the lenders, so can ensure you provide the information the lender needs, none they don’t, and avoid unintentionally stepping on a land mine. If you find a house, and only after making the offer the lender objects to something, you may lose the house – I’d rather pay £200 and reduce the risks.
The other thing I wanted to mention is that it is easier to do a fast purchase with freehold. If someone is buying a flat and the freeholder (or their agent or solicitor) are dicks, the whole thing will grind to a halt, and if you’re especially unlucky the freeholder will sting you for hundreds extra to “accelerate” their own (deliberately slow) process. Leasehold sucks, and no-one should even go to a viewing of a flat in my view until they’ve seen the lease and know how much the freeholder wants for a sale pack. Leasehold is shark infested water. So good choice to buy freehold 🙂 I once agreed to buy a flat and only discovered later the freeholder would screw me for £800 just to provide the necessary to allow me to buy from the leaseholder. I’ve been screwed annually for various other things since.
I’m on my own journey towards financial freedom now. I loaded up on way too much debt in 2007/2008, so now finding my way forward in terms of starting to diversify and keep the train firmly on the tracks. With hindsight I wish I’d got into passive investing and low debt instead of being a geared landlord, but easy with hindsight to realise, and takes time to switch gears!
Thanks for writing your blog, I found it recently and enjoy reading it.
Hi Nyul,
Thanks for your detailed comment and sorry for the lateness of my reply! I somehow managed to miss it… woods for the trees maybe!
So far our solicitor has been very good, despite being one of the lowest quotes we’ve had, so I am pretty happy! Things have stalled as mentioned in other comments though, and funnily enough you saying about the mortgage broker, our mortgage company have taken aaaaages to get back to us about even receiving our application, which I am sure would not have happened if we’d gone with a broker. However, seeing as we are being stalled by our vendor this is not such a big problem and we should have plenty of time to chase them up and get it sorted, thank goodness!
We are selling Leasehold as we are in a flat now, so hopefully that won’t hold up our buyer (I don’t remember it doing so when we bought). The freehold is owned by the council as it’s an ex-council house, so I am guessing (hopefully) that they are not dicks 🙂
Sounds like you have taken a pretty big risk with your plan but as they say “he who dares” and with different timing you could have come up smelling of roses in a very short amount of time. Good on you I say, and it sounds like you are not the sort to panic and are adjusting the plan as things change, which is all you can really do.
I wish the best of luck to you going forward!
Thanks for the kind words about the blog, glad you are enjoying it, and I might tap you up for some info on landlording so hopefully you stick around 🙂
My turn to apologise for a late reply…
It sounds like you landed on your feet with the solicitor. Did your purchase complete yet? Sorry if you said in a post since, I may have missed it. Fingers crossed you got keys.
I imagine you’ll be ok with a council freeholder and a leasehold sale pack. Prices for the ones I know aren’t too bad either, and they’re used to doing it (unlike a freeholder who just owns it historically and doesn’t know what to do).
Frankly, my plan was stupid. But we live and learn don’t we 🙂 I co-founded a dotcom in 1999 and raised VC funding for it, that fell on its face. After that in 2000 I read about index funds and made a mental note to start investing but got caught up in other things. I regret that. But the property mistakes have taught me a lot about risk, about debt risk specifically, and about investing more generally. I’ve now graduated from “I’m an idiot and I don’t even know it” to “I’m an idiot and I know I am”, which is much better – I can start learning more. I recently did Robert Shiller’s Yale course on Coursera, and that economic foundation is proving useful in managing my risks.
The challenge for me now is that although the properties generate a reasonable income, the debt load is high and LTV is still around 80%. The only reason it stands up is the low rates. I can tolerate 3% base rate in 2018, so am preparing for a period of months or years with none or negative rental profits as who knows what will happen. If I start selling, after costs and CGT, there’s almost nothing left, so I sacrifice income, to reduce the debt. That doesn’t help with income or risk, as I have less income to service the smaller debt, like my legs twisted in a sack race. So my approach is to refocus on other sources of income, and squirrel away everything I can into liquid or semi liquid assets. I’m also paying down some of the more expensive debt (well, if you can call 4% expensive).
Thankfully after ten years I’ve become a half decent landlord. The processes are good, properties well managed, and I’ve figured out how to get good tenants which is without a doubt THE most important lesson for any landlord to learn. It took evicting a few of the grimmest people you can imagine to learn that one.
Hi again Nyul,
Thanks for sharing more of your experiences, very interesting stuff!
The Dot Com company sounds like a great story, if you ever fancied doing a guest post on that let me know!
The house story for us has taken many unexpected twists and turns since I wrote this post but rather than bore everyone with it all I thought I would wait until we are practically moving before writing another update. It might be quite a long post when I do… put it that way! 🙂
I have come into the PF World (well when it comes to investing at least) fully realising I know nothing so am taking things slowly and trying to learn before piling money into anything that could be risky, which I think is the best way to be as you say! Rate hikes over the next few years could cause a lot of people considerable financial pain, landlords and private owners alike; first time buyers especially so, I know a lot of slightly younger people who are most likely mortgaged up to the eyeballs with little room to manouvre (Just as we were about 5 years ago… got lucky with the timings on the rates dropping I guess).
I’ll check out that Robert Shiller course, thanks for the recommendation!
Sorry to hear the house purchase has had some bumps. Hopefully it will all go through and you can blog about it from your new house soon.
It’s an eye opener to me to find there is a whole world of pragmatic personal finance and investing that’s based on evidence, a realistic attitude, hard work and commitment, as opposed to the “gold will go up! small stocks will crash! buy Venezuela stocks now!” nonsense.
Property prices don’t sky rocket anywhere in the UK apart from London, so I think Midlands should be pretty safe!
Congrats on the new digs! The house looks great, buddy.
I’m intrigued by the mortgage options available: are these ARMs that adjust after 3, 5, and 10 years? I’m not sure if the mortgage products are the same on both sides of the pond. Are 15 and 30 year fixed mortgages an option in England, too?
No, the mortgages work out VERY different this side of the pond. Fixed deals beyond 5yrs are very rare, & critically we as individuals receive no tax break on mortgage interest. Pretty much as different as the same financial “product” could be in fact.
If you are self employed & use some of your home for work use, then you can claim a portion of mortgage interest & other home costs against your income tax, but for many (most) people this isn’t an option.
30 year mortgages are creeping into the mainstream more these days, sadly.
Thanks DB40!
LCIL has answered your question with clarity already, but yes, mortgages are helluva different over this side of the pond! I couldn’t believe what I was reading when I heard about 15+ year fixes at low interest rates you lot have been getting over the last few years, plus the ability to claim interest back on your tax return. Scandalous 🙂
Hi again. Very well done in getting this far so quickly, but I’ll postpone the very hearty congratulations until you report that you’ve actually completed on both the purchase and sale (I’m assuming the one is dependent on the other ?). Maybe experience makes me over-cautious, but you’ve two other parties involved completely outside your control and so you seem to be only part-way through the process. There (may still) be dragons…. let’s hope both transactions can be completed.
Is your real name Nostradamus by any chance?
We had a call today from the Estate Agents and the guy we are buying off has, of all things, been made redundant today!!!
Don’t get me wrong, I wasn’t popping the champagne corks just yet, I just thought I’d write about our experiences so far, as it was pertinent to the PF element of this blog 🙂
There is still a chance the deal will go through, so I guess for now we’ll have to keep our fingers crossed that this particular dragon can be slayed. Nice reference to that on St. Georges Day by the way… 😉
Good luck. That only proves that it is not over, until it is over.
There has never been a problem selling houses, the problem is pricing them right.
Thanks No Nonsense Landlord. It ain’t over till the fat lady sings, as they say!
Hey TFS,
I’ve read your post, which was a really interesting read, and I’m just sorry to hear the news on the vendor. I hope you manage to sort things out quickly and painlessly!
The pictures look great, and although you mentioned it isn’t a new house, the interior looks really modern and stylish.
My fingers and toes are crossed for you. Keep us all posted!
Cheers
Huw
Cheers Huw, really appreciate that! Will make a post or update a bit further down the line when everything has either completely fallen on it’s ass or we’ve exchanged/completed. Don’t want to bore everyone with the whole drama as it unfolds, this ain’t facebook 🙂
Hi. Just wondered (hoping !) that everything’s back on track and your new residence is still within reach ?
Hi DM… thanks for asking.
The vendor had a second interview yesterday so we will hopefully hear some good news today or tomorrow. If not, no one in the chain seems to be asking questions or making rumbles of pulling out, so we are hoping it is now just a waiting game for the guy to get job regardless of whether that is confirmed this week or not. So still pretty hopefull!
I’ve been keeping an eye on rightmove and there is a right load of overpriced rubbish out there now, so we really need it to go through.
Man, those prices seem crazy (from my southeastern US perspective). Even if I ignore the little funny L and pretend those are USD prices, they still seem high.
I guess once you look at just the monthly payment it doesn’t seem so bad…
Best of luck during this time of “transition”.
The funny L… I’ve never heard it called that before 🙂
Yea it’s a bit of a shit really, but this is the country/system we live in. No point in complaining about it, just get your head down, save hard, and if it takes a few more years to reach FI, so be it.
I’m a late-comer to the conversation but came across this blog and as I am currently doing research into quick sales/purchases thought I’d give it a read. This seems like you found the perfect property although the process has perhaps been a bit more stressful than you were originally anticipating. How have things settled down after this whirlwind of activity? I think you did fairly well for yourself but circumstances may have changed in the intervening months. Here’s hoping all has worked out to plan!
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it can be hard to really to sell a house quickly but you have laid out a great article. Price anchoring is a nifty tactic to use on some customers.
There are some real obvious points to make about selling a house fast. This article addresses a few real important points but in my opinion the most important point to remember is this.. a house is only worth as much as a buyer is prepared to pay. Don’t overprice your property as in the long run the losses may outweigh your expectations. never rely on a realtor to set the price as they tend to overprice to get the Business. Do your own research as house prices are usually based on like for like sales in your area. Good luck to all on selling and remember also, kerb appeal gets them through the door.
Thanks for the extra tips there Lisa!
Great post! What could be also helpful is that when you sell your home, the buyer’s funds pay your mortgage lender and cover transaction costs. The remaining amount becomes your profit. That money can be used for anything, but many buyers use it as a down payment for their new home. This is how it works 🙂
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