Property Search in London |
It’s very easy to waste a lot of money when buying a property in London. You can buy a poor property, pay too much or throw money away by paying tax unnecessarily – in the worst cases people do all three. Fortunately, avoiding these mistakes is very simple; here, Jeremy McGivern, founder of London’s leading luxury property search agency, Mercury Homesearch, reveals the seven most expensive mistakes that London property buyers make so that you can conduct a successful property search.
Your London Property Search: 7 Costly Mistakes to Avoid.
Whether you are born and bred in London or if you’re based overseas, the first thing that you must remember is that the London property market is rigged against buyers. Why? Because most people rely on the estate agents but they actually work in direct conflict to what you are trying to achieve.
In the U.K., estate agents are legally obliged to achieve the highest price possible for their clients, the sellers. Their role is not to find you your ideal home or investment, but to sell any one of their clients’ properties to any of the buyers they have registered with them, and for the highest price possible.
In estate agent jargon, you are an “applicant”. This is why you will find that you will be sent properties that often don’t match even your most basic requirements. And does it sound like a good idea to take advice on the quality of the property, location and valuation from someone who is paid by the seller to achieve the highest price possible?
Unfortunately, buyers forget this conflict of interest. Consequently, many throw away hundreds of thousands of pounds, and in many cases millions, by making a few simple mistakes. Fortunately, many of these mistakes are extremely easy to avoid. Here are the seven most expensive mistakes that London Property buyers make and, most importantly, what steps you can take to avoid them.
Step One: Preparation
Most buyers do not treat the purchase of their home as a business transaction and are consequently ill prepared. It’s vitally important that you do not make the same mistake and are in a position to act swiftly to secure the most advantageous terms.
To achieve this, before you even start looking for a property, make sure that you have spoken to a tax advisor, your finances are in place prior to making an offer, prepare for Stamp Duty Land Tax, instruct a solicitor and surveyor – and make sure you have time to find and inspect all the suitable properties within your target area.
Step Two: Refine your property search criteria
Buyers will waste huge amounts of time when searching for a property, because they are not truly focused on what they want. If you don’t have a clearly defined picture of what you require, you will spend hours looking at unsuitable houses.
I have lost count of the number of people who say “I’ll know it when I see it” which may be true but do you want to waste vast amounts of time looking at unsuitable properties? Because that is what will happen if you don’t have a basic list of requirements.
Things to consider in addition to the number of bedrooms, etc. are the condition of the building, length of lease, views and orientation, architectural styles, service charges and what you require in terms of facilities – i.e. will you need a garage, lift or swimming pool? It’s also important to ask yourself whether your criteria are realistic, as too many buyers waste months searching for a ‘needle in a haystack’, when in fact the needle never existed in the first place.
Step Three: Do not rely on estate agents or the internet for your property search.
Although the majority of properties are sold through estate agents, buyers forget that this immediately puts them at a disadvantage. After all, estate agents are employed by sellers, which means they are legally obliged to achieve the best terms possible for the sellers and not for you.
This in turn means that the agents are not trying to find you your ideal home, but are simply trying to find the person who they can persuade to pay the most for their client’s home. Nevertheless, the agents will be your main source of properties so you must ensure that you are at the top of their list of “preferred buyers”.
To achieve this, make sure you register with every estate agent in your target area and contact the agent at least once a week to be the first to see the best properties. During this process it’s also important to avoid relying on the internet, as although it may seem like the most efficient way to source properties, the best properties that come to market will be snapped up long before they make it onto the websites.
This doesn’t mean that you should ignore the websites. But if you rely on them then you are doing what everyone else does and are effectively joining a virtual queue. What advantage does that give you? Do you really think you will have first refusal on the best opportunities?
Step Four: Source off market properties
London’s finest and most exceptional homes rarely reach the open market, but there are strategies which you can employ to give you a competitive edge and help you to see these properties first. For example, placing an advert in a suitable publication, writing a letter to existing home owners (if you have a very specific area that you’re covering) or talking to a concierge, porter or even property developer may lead to you sourcing homes before they reach the market.
These are just a handful of the tactics I use to find London’s finest homes and investment opportunities for my clients.
Step Five: Arguably the biggest mistake you can make when conducting your property search.
Accurate information is essential if you wish to make an astute acquisition. If you have a good feel for values then you will spot the bargains and be able to move before anyone else. You will also avoid unwittingly overpaying.
Because of this, it’s important to remember that estate agents are paid to achieve the highest price possible for their clients (sorry to repeat this point but it is vital), so you must take the information they provide with a pinch of salt. A useful tip to help you accurately gauge the market is to double check all the information you can obtain and find as many comparisons as possible.
As soon as you have a good idea of what similar properties have sold for, you can start making an informed decision on what you should be offering too. However, the most important information can often be discovered from the owners of the property themselves, so don’t be afraid to ask them questions if you’re struggling to find answers elsewhere.
Step Six: Learn to negotiate
Negotiation is a skill which can be learnt, so don’t worry if it doesn’t come naturally to you. Although I’d strongly advise reading up on the topic, there are a few simple tactics which you can employ to give you an edge over most buyers.
A good place to start is to ask yourself, “What can I offer the seller that would be of huge value to them, but little loss to me?” – for example, a swift exchange with a delayed completion, or paying with dollars rather than sterling. Also, try making any increases in your offer in decreasing increments, (e.g. £5m, £5.5m, £5.75m, £5.9m) to give the seller an indication that you’re coming to the end of your threshold.
Step Seven: The agreement is not legally binding until contracts have been exchanged
Remember that agreeing a price is only the first phase. 25% of purchases fail between agreeing a price and the exchange of contracts. Ultimately, it is your responsibility to make sure everything proceeds smoothly. If you do not, you must be prepared for the frustration of losing your ideal home.
You need to coordinate your financier, solicitor and surveyor, whilst ensuring that the other side is acting swiftly too. You need to ensure that your team is ahead of the game and that the seller’s side is providing the information in a timely fashion.
Conclusion
Frankly, trying to cram a guide for London Property Search into an article is wishful thinking. It is a complex topic and you will be spending a significant sum of money so it is important to get it right, especially as the transaction costs are high.
Consequently, I have written a book, The Insider’s Guide To Acquiring £1m to £100m Property in London, which reveals the tested and proven strategies and tactics that I have been using for over 20 years to acquire some of London’s finest homes and investment opportunities for my clients.
This is not mere theory. These techniques work irrespective of whether you plan to acquire a property for £1m or £100m. So, you will discover tactics I use to source off-market properties for my clients and the negotiation strategies I use to achieve prices that my clients didn’t think would be possible.
If you would like to request a copy of my book, you can click here, email dee@mercuryhomesearch.com or call 02034578855 (+442934578855 from outside the UK).
