6 March 2015, The Times
A professional property buyer can save you money, but if you can’t afford one, here are some of the tricks they use
How does a discount of 10 per cent on your property purchase sound? The wealthiest property buyers have always known the best way to knock down prices — pay a professional buying agent, someone to represent them directly, rather than the seller who has the estate agent on his or her side. If you are lower down the property chain, however, and want to unearth the best properties before anyone else — preferably at a reduced rate — here are the things you need to know to go about it in the current market, with or without an expert at your side.
Buying agents may cost somewhere between 1.5 and 3 per cent of the purchase price, but they often save their clients much more because of their ability to secure sneak previews of properties not yet on the market and to sniff out a discount where a lone buyer might unwittingly have paid the guide price. They spend years cultivating relationships with local estate agents to ensure that they get the latest information about, and access to, the newest properties and that they are full of insider tips. For example, developers are often more willing to accept a lower offer than sellers who live in a property, because they want the return on their investment as soon as possible.
Previously, buying agents tended to be busiest at the higher end of the market, in prime central London, for example. Recently, however, they have also found themselves busier than ever lower down the chain. Some of the things they do — such as creating long-standing relationships — are difficult to emulate. However, other tips from these industry insiders can be incredibly useful.
It’s the best buyers’ market the UK has seen in a long time, according to housing experts, but only if you’re looking for properties worth more than £2 million, where discounts of between 10 and 15 per cent are becoming increasingly common. Many sellers at this level are keen to sell to avoid being hit by the mansion tax proposed by Labour, which could kick in after the general election in May on properties worth £2 million or more. They are also aware that there may be less interest from buyers worried about the same thing, making a discount more likely for those buyers in a good position.
Those looking for properties below the £2 million mark must be even more astute, because the market is flooded with people who might previously have bought a more expensive property. “It’s definitely a tale of two halves at the moment,” says Camilla Dell, managing partner and co-founder of Black Brick Property Solutions.“The market below £2 million is incredibly active, with lots of buyers chasing relatively few opportunities, and some going to sealed bids.”
That doesn’t mean, however, that there aren’t opportunities out there. “We’ve seen a lot of examples where sellers put over-priced properties on the market for between £1.5 million and £2 million just before Christmas,” says Jo Eccles at Sourcing Property. “Now, because those properties have sat on Rightmove for several months, buyers think there must be something wrong with them and overlook them. But some of these are actually cracking properties that can, in some cases, be purchased for 10 per cent less than the guide price.” For a property worth £1.5 million, 10 per cent of the asking price would mean knocking £150,000 off — a substantial amount by any standards.
A buying agent immediately adds credibility to a bid, says Nathalie Hirst, a London-based agent. “Sellers are interested in more than just the amount that’s bid. The agents I work with know that I’ve always done my due diligence on a buyer and that I can be upfront about their finances, their legal situation and move quickly as a result. Say there is a property on at £5 million. I might quite easily put in a bid at £4.8 million because they know I won’t back out.”
Finding a keen seller should be your top priority, says Guy Meacock of Prime Purchase. “Even when it seems like a buyers’ market, don’t be fooled: you won’t automatically get 20 per cent wiped off the asking price.” A buying agent will be able to do this much more easily because of longstanding relationships with local businesses, but there are still things you can do yourself.
1) Ask agents about the seller’s situation — are they a developer or do they live there? Do they look as though they are living alone because of a divorce or that they are keen to move because they’ve just had another baby and run out of space? Find out how long the property has been owned on sites such as Zoopla.
2) Try to see properties before anyone else. Either find a good buying agent or build up a relationship with local estate agents.
3) Get a good lawyer, who is familiar with the location, doesn’t rely on fax machines and get one who answers the phone quickly. “We tell our clients that having a good lawyer can make or break a deal, depending on how fast and professionally they act,” says Dell.
4) Don’t put all your cards on the table. If you love a property, try not to gush about it right away in front of the estate agent or owner. It’s harder to negotiate if they know it’s the one for you.
5) Have your current property on the market, ideally with a buyer in place. If you can exchange before making your offer, even better.