Today I am going to show you how I found the property that we eventually bought for nearly 30% less than the asking price, so that you can find the best opportunities available in your target market.
The key is to have total market coverage so that you are in the right place at the right time when the ideal property becomes available. Unfortunately too many buyers take this to mean that they have to be the first person to see new properties when they come to the market or ideally even before they come to the market.
Indeed 33% of the properties I bought for clients last year were off-market properties so this is an important method. However, that leaves the other two-thirds that we bought that were on the open-market. The property we have just bought was on the open market and had been for a while. However, it had not been available at the price we paid, i.e. at a 25+% discount to the asking price for too long.
I just happened to know that the sellers became highly motivated to move and would accept offers that they would not otherwise have considered. And this is the mistake that 98% of buyers make – in fact it is two mistakes:
- They keep the price range of their search too narrow
- They fail to regularly monitor properties
In the first instance most buyers do not consider properties that are 20% or more over their budget. And this is understandable. Firstly, if you look at too many of these properties you can become unrealistic about what you can achieve in your budget. Secondly and more pertinently for most people – it involves a huge amount of time, which you simply might not have, i.e. many of the properties priced at 20% more than your budget are correctly priced.
However, it is vital that you keep an eye on properties that are significantly more expensive as these could be completely mispriced and provide you with an opportunity because no-one else is considering them.
In this case we had the perfect mix: a property that was about 16% overvalued and a very small agency selling the property. So, despite the fact that the property was openly advertised on primelocation.com they were not achieving anywhere near as many viewings as one of the better agents in the area would have done.
I expect that the sellers used this particular agent because they were cheaper. This is an unbelievably stupid mistake. It has cost them hundreds of thousands of pounds even if they think they have saved £60-£70,000. If you are selling a property, please do make sure that you use the best agent for your type of property (and do try to negotiate their fees). This is one of the reasons I advise clients which agencies to use and do not sell properties myself.
But back to the main point: you need to ensure that you have total market coverage. Most buyers register with 20 estate agents and regularly keep in contact with 10-15 (I am being generous with these figures). In addition they tend to look at too narrow a price range, so the probability of them finding their ideal home is severely limited. In fact they are relying more on luck than they realise.
By way of comparison, we speak to over 230 estate agents every week and our list of over 300 off-market contacts. We check the websites and auction houses. In addition we also directly approach vendors of houses that we know are suitable even if they are not for sale and we also receive calls and emails from owners who wish to sell without using an estate agent.
Now, it is not going to be realistic for you to do this – for one you do not have our network of contacts – but it should give you an idea of how many more agents you should be speaking to on a regular basis.
And that includes the small agencies which appear to be hopeless. Many of them are but occasionally they sell properties that they essentially aren’t equipped to sell – that is where an opportunity can arise.
Is this hard work? Yes.
Can it be very boring? Oh yes!
But it will also be very rewarding. Of course to spot these opportunities, you also need to have a good understanding of how to value these properties and that is something I will come to in a later email.
In the meantime, if you have specific questions about buying a property in London, then you can reserve a complimentary Property Search Health Check by emailing Rachael@mercuryhomesearch.com.
The Property Search Health Check is a twenty minute diagnostic telephone consultation during which I analyse your property search to highlight specific problems and show you how to avoid them, so that you can buy the finest property on the best terms possible.
I will answer all your questions and provide a blueprint tailored specifically to your property search, which will give you a distinct advantage over other buyers. The Health Check is guaranteed to save you money, time and stress whether you have just started thinking about buying a property or have already started your search.
Of course few things in life are really free and this is no exception
Let me just say this: it is possible that after I have answered your questions you will be impressed by my expertise and think it appropriate to ask me to help you acquire your home or investment property in London.
But please be assured, the Property Search Health Check is not a sales pitch in disguise. It is an in depth review of your property requirements and concerns, which is underpinned by my 13 years’ experience of buying property in London and negotiating hundreds of millions of pounds worth of property transactions.
You are obviously a successful and intelligent person otherwise you would not have accumulated the wealth to allow you to buy a property in London. However, you are probably not an expert on this particular subject.
I have seen very shrewd individuals buy genuinely poor properties and/or massively overpay because they did not really understand the prime London property market. I have been very successful and can show you the dangers to avoid and the opportunities to target. So why wouldn’t you let me share this information with you?
The dates for the complimentary Property Search Health Checks are:
9th September at 8:30am
17th September at 9am
24th September at 8:30am
To make your reservation, please contact my assistant, Rachael, now at Rachael@mercuryhomesearch.com or call 0800 389 4280 (or +44 800 389 4280 from outside the UK).