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Property Buying Pitfalls

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Property Buying Pitfalls

Below are some useful tips on things to avoid doing when buying a house or flat in London

Never offer the asking price. It is unbelievable that so many people come straight in with an offer at the asking price after seeing a house. The Estate Agent will often be able to achieve in excess of the asking price because of this without necessarily having anyone else interested in the property at the same time. As a general rule, offer between 10-15% below the asking price, although you must alter this depending on the market.

Never look too keen during or after a viewing. A good estate agent will be able to pick up the signs from you that you really love the property. In that case it will be difficult for you to get much off the asking price. Always try and be aloof. During the viewing never start switching off the lights as you move from room to room, it’s a sure sign that you like the property and you’re starting to move into it in your mind.

Never make an offer to buy during or directly after the viewing. You will sound too keen. If the agent wants you to offer or if you want to make an offer, ask how much the vendors want. Ninety percent of agents will say “the asking price”. Don’t butt in when he’s talking. Some agents will say “the asking price” and continue talking themselves down by several thousand pounds, a sign that they are under pressure to sell the property. In this case, wait until they’ve finished talking themselves down and then ask if the vendor would accept £10,000 less. They’ll possibly keel over horrified. 90% of them will say, “I’ll ask the vendor”. Say, “No, I’m not making an offer”. But at least you will know a level that you can start negotiations at if you want to. Go away from the viewing and think clearly about whether you want to get into negotiations to buy.

Never indicate your absolute maximum when registering with an estate agent. The major rule of thumb for estate agents is that 90% of their registered buyers will eventually buy a property up to 10% more than the maximum they had registered to. Generally estate agents will ask the buyer fairly early on how many properties they’ve seen. This gives them a good indication of how close to actually buying a property the buyer is. For example, a young couple starting to buy their first home who have not seen any properties yet will probably be a prospect for buying in say 10-15 viewings. However, a second/third time buyer, under offer to someone keen to get into their house will buy within 2/3 viewings if the agent shows them something which slightly exceeds their expectations and if i’ts within 5% of their registered max.

Never buy a property located more than ten minutes walk from a tube/train station. This is especially relevant when buying for investment. You can always change the presentation of a property with enough investment, but you’ll never change its proximity to transport. 90% of short hold tenants want to be within ten minutes walk of tube or train with direct access to central London.

Never dismiss the future saleability of the property. This is a critical point when deciding to buy. You’ve really got to put yourself in the shoes of the person who’s going to buy the property from you when you’re finished with it.

Never accept the Estate Agents suggestion of rental Value. It may seem like common sense, but it’s amazing the amount of people who have bought for investment recently and not researched exactly how much the property would rent for after they’ve paid for it.

Never buy the first property you’ve seen in a new area. It happens quite often, that, when a buyer fails to find a suitable property in one area after tons of viewings, they go to a slightly different area, find fantastic value for money (in comparison to the last area) and fall for the first one they’ve seen. Research is crucial in a new area.

Beware of what an Estate Agent says. Although everything an estate agent says or shows you about a property is covered under The Property Misdescriptions Act and The Estate Agents Act, in certain circumstances it can be difficult to prove the agent was not truthful to you. Many agents use the “old ploy” that they have someone else very interested in the property and “they’re going to offer the asking price in the afternoon” in order to stimulate you into making an offer. This is illegal.

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