There is currently a large imbalance in the market.
There are far more buyers than property for sale.
Prime London buyer demand is running 72% above the five-year average, while property supply is 12% down according to Knight Frank.
Consequently, there are multiple buyers for each property which means competitive bidding and even gazumping taking place for the best properties.
Now what I am about to tell you is not the most interesting advice ever, but it is some of the most important, so please do not dismiss it because it seems too simple or mundane, because if you execute it well then you will save yourself significant money in the negotiation as well as a lot of time and stress.
So, what is this boring advice?
You must be in a position to move swiftly when you find your ideal home or investment opportunity, because if you don’t you will either miss out to another buyer who is organised or you will have to pay more to price them out (which you may also not be able to do).
Before you roll your eyes thinking this is incredibly obvious – and it is – just check that you can actually provide all the information required within 24 hours and ideally on demand. This includes:
- Proof of address and ID – copies certified by a person on the approved persons list if you cannot show the agent the original documents
- Proof of source of funds as well as proof of funds
- The contact details of your solicitor
Hopefully, you will have already done 1 & 2 for your solicitor but, if not, you must also instruct a solicitor and provide the documents, because the AML checks can sometimes take considerable time and they won’t accept you as a client until you have passed the checks. Unfortunately, we are all guilty until proven innocent in the eyes of the anti-money laundering authorities…
But the above is only a small part of the process of making your self a “Dominant Buyer”. You also need to have spoken to a tax adviser so that you can be sure of how you will buy the property, i.e. whose name will it be under, should you use a company or trust, are there any tax issues remitting money? etc., etc.
For many people, the tax may be a simple issue, but it is worth checking because the entity that acquires the property will also have a bearing on the finance you can get as well as implications for further anti money laundering checks.
Put yourself in the seller’s shoes. Would you rather deal with someone who is professional and organised or with someone who seems to have made an offer with little preparation or thought? Who do you think appears like the person most likely to transact?
And remember, the estate agents will be very keen to ensure they receive their commission so they will be recommending the person who seems most reliable. I know this for a fact because I have had offers accepted for our members which were not the highest put forward or we have been at the same price as other buyers, but the sellers have chosen us because of the preparation I insist our members undertake.
Of course, it also helps that they are represented by me because I have a proven track record, but I cannot stress enough how vital it is that you are in a position to move as quickly as possible. By making a few phone calls before you even start looking at properties, you can save yourself literally tens and even hundreds of thousands of pounds.
Yes, it’s dull but, in reality, you will be delegating most of the work to the financiers, tax advisers and solicitors, but this has to be done well before you make an offer. As I say, it’s boring and, frankly, it pains me that I have to keep reminding buyers of such a mundane point, but it is a fundamental step in the process that cannot be ignored.
I can only suggest that you focus on the financial benefits of doing this not to mention the reduced stress levels when it comes to the negotiation and subsequent transaction.
One final point. It is essential that you use experienced and efficient specialists. It is very easy to be tempted by cheap “conveyancers” or an “adviser” who may be peddling “SDLT Avoidance Schemes”, but please be very careful. There are ways to mitigate SDLT in some instances, but most “schemes” do not work so please be very wary.
Meanwhile, all solicitors are not created equal. As an example, one of our members, who is a partner at a Magic Circle law firm, initially used a solicitor in London for her transaction solely because the soliciotr was a member of her husband’s extended family. It soon became evident that the solicitor was not capable of dealing with the complexities of a prime central London property transaction, so we had to quickly change to one of my recommended specialists.
In this instance family politics were at play, but all too often both buyers and sellers use solicitors who are slow, unresponsive, unhelpful and inexperienced in London property. This is a recipe for disaster because it is often difficult, expensive and time consuming to change advisers.
So, if you are planning to acquire a property and need recommendations for trusted and reliable specialists for your buying team – be that solicitors, accountants, bankers, mortgage brokers or anyone else – simply send an email now to email@example.com.