Finding the perfect property can take time and making sure you keep up to date with all the new properties on the market is vital to any landlord looking for their next investment.
Boxall Brown & Jones property alerts allows you to tailor your search and get frequent email updates to let you know what is new to the market. You may even be given a heads up before the property goes to market!
For this week’s Top Tip Tuesday, we will be giving you a quick rundown on how to beat the crowd when purchasing your next property.
When it comes to sealed deals and cut-throat competition, buyers need to stand out to be successful. They should have a lawyer in place and a mortgage agreement in principle upfront, while getting money laundering approvals before submitting an offer can put them a week or two ahead of everyone else.
The key to success for buyers is understanding the seller’s motivation – it is no longer about making the highest bid. Equally, being a cash buyer will not make you stand out from the crowd either.
On the other hand, buyers cannot afford to be complacent as buyers are becoming more and more savvy, meaning that they will not pay an inflated price for a property that is not worth it.
As a buyer, you should do the following:
Offer a deferred fulfillment
The usual timeframe from the exchange of contracts to realisation is 28 days. Buyers are now increasingly offering sellers flexibility over completion dates in an attempt to strike a deal with the seller. The parties will agree on a sale price and the buyer will still pay a deposit upon exchange, but the two will sign a contract agreeing to delay the completion date by a few months to a year.
This is very attractive to sellers who have yet to find a new home to buy. There are a couple things to keep in mind with this method. Firstly, you as the buyer should request that the risk to the property – and the responsibility to insure it remains with the seller until completion. It is also the responsibility of the buyer to check that their bank offers some leeway for a deferred completion, as most mortgage offers are only valid for six months. It should also be noted that repeat searches may need to be conducted in case anything changes during that period.
Offer to pay the exchange deposit to the seller
Most sellers are asset-rich but cash-poor and need access to cash – for things such as moving expenses. Rather than the solicitor holding the entire exchange deposit (typically 10% of the purchase price) until completion, you can agree to return a portion of it to the seller upon exchange.
However, this method is a risk – the seller could leave and spend the money and then not complete – but it can also put you head and shoulders above any other buyer.
Meet the owners
This option is not everyone’s cup of tea, but if the person selling the property is happy to meet, it could give you an edge to other buyers. Sellers love their home and would ideally want the person they are selling it to, to be nice and friendly.
The seller will be able to make a judgment on your personality rather than just your bank credentials alone.
Think outside the box
In a highly competitive market, you must be able to prove yourself. One way to do this is to make a property search request at the time you submit an offer – this will show how badly you want the property and saves time when transferring property.
Agents can also ask buyers to enter an exclusivity agreement however, this is not a legal binding contract under English law. An alternative to this is an option agreement, whereby you persuade the seller to grant you an option, meaning that the seller will be obligated to trade with you at the agreed price if you are ready to do so within a specified time frame.
Do whatever it takes
Sometimes securing your next property requires dedication – and flattery.
For example, the seller could be an amateur artist with various paintings around the house. One of these paintings catches your eye and you decide to include £20,000 within your bid for one of the canvases in the property. The seller chooses you over a cash buyer, despite your offer being less than the cash buyers.
We hope this article helped you understand how to beat the crowd when purchasing your next investment property.
If you are a landlord looking for a trusted agent to take care of your property, get in touch with our experts today on 01332 384438.