In the more affluent areas of London and for properties above £1M, many vendors choose not to openly list their properties. By being in the market and forging good relationships, I often gain access to these “off market” properties. This is perhaps one of the more obvious areas where I add value to a property search.
Along with saving time and managing all the stresses that can arise, I also save my clients money with my fee being more than absorbed in any discount I negotiate.
Sometimes however, it is hard to quantify how much money I save my clients but in my latest search I managed to negotiate a staggering £250,000 from the asking price.
For those of you reading this and feeling you may be venturing out to look for your next property investment or property to live in, and want to have my expert guidance, just email me or call 020 7409 5270.
Information is key – I had some useful information.
How information helps the negotiation
There were a number of factors which assisted me here to formulate a picture of value and where we had to pitch our offer.
- Motivation of the seller: I always say, and it will sound obvious but knowing the motivation of the seller will enable you to best place your bid. In essence, find out, why they are selling?
- Price per square foot in the area: Do some research. From all your viewings and all the brochures you have collected during your search, form a spreadsheet and work out a firm price per sq ft for the area. Look for comparable evidence of properties sold in the immediate area within the last 6 months.
- Historical transactions: Find out what the vendor paid for the property and when they purchased it. This can be done easily on the land registry. If the property was purchased a long time ago, they may have more equity and be susceptible to a lower offer.
In this instance, I subtly found out that the vendor had already found her onward purchase. This told me we would be dealing with a definite seller, she required my client’s money to buy her purchase. I could imagine that selling agent pressuring her to get her property sold to complete the chain.
The price per sq foot for this property was in the correct ball park. Though when negotiating with the agent, I provided him with details of comparable properties (that we were not interested in) that had cheaper price per sq ft prices. This helped justify our lower offer. Transactions in this price bracket were few and far between at this time so I put more weight on properties which were under offer through other agents rather than completed transactions.
A little research and I found out that the owner had purchased the property some 20 years ago for a fraction of the price it was now being marketed at. This was vital information, as to me she had sufficient equity to not be so swayed by the odd £50K or so. If she had only purchased the property last year for £100,000 less, with taxes and other disbursement’s she wouldn’t be making much of a profit if any at all and therefore less open to taking an offer.
Finally, by accepting our offer she would be able to purchase her onward property. I knew that despite having to increase a little, we probably held the negotiating cards and therefore were in a stronger position.
Our initial offer was rejected as we anticipated but with a slight increase, we managed to secure the property for £250,000 less than the asking price.
What the client says:
“Our investment in Matt’s services was just a fraction of the property cost, but money well spent because it gave us a lot of comfort. He made the process much easier and most importantly made us feel confident. We would have seconded guessed ourselves, taken the first “no”, and not even had the guts to offer so much less. Now we’re using the money we saved on renovations.”
If you’re looking to buy a property in London, and want to make sure the negotiations are in your favour so you are confident you will get the best deal and value possible, I am happy to chat through your options – email me or call 020 7409 5270 so we can discuss your property brief!