The Year of the Smart Purchase
Struggling to find the right home? Don’t forget the golden rules of the property game, says property expert Laura Henderson.
If you snooze you lose
Trying to call the bottom market with any degree of certainty is a gamble that will almost certainly end up robbing you of capital growth potential. When markets turn, they tend to do so very quickly in a “V” shape, and those who buy on the way down without waiting for the absolute bottom are generally considered to be the clever ones. If you do happen to call the market at its lowest ebb, count yourself lucky, but you can’t build a strategy on luck alone.
Establish a fair market value
Research the most recent selling prices of comparable homes in your chosen area, not the asking prices, but the offers that were finally accepted. Local agents and in-the-know neighbours can be tapped for this kind of information.
Think about what negotiation nuggets you have to offer that will sweeten the deal in your favour – most vendors will, for example, be amenable to a price cut if they know there’s no chain, you’re are able to move quickly and can provide supporting evidence of comparable ‘under-value’ sales in the area.To check property price movements in your neighbourhood, review favourite listings on a weekly basis on Rightmove. If sales are picking up, it’s time to get back in the game.
Get agents on side
It’s not just sellers that have to launch a charm offensive to get their property sold. Agents worth their salt are excellent ‘all round’ schmoozers, because the more they know about you the buyer, your property requirements and your finances, the easier it is to flog you a house. Getting agents on side early on is a wise move – you can plug them for information on the best properties. But be careful about how much you divulge and stay tight lipped about your budget limit (remember they represent the seller).
Sum up the potential
A property’s capability is all about its income generation potential – this could be through rentals, tax benefit deductions, grants for renovation, as well as the property’s long-term appreciation potential; the ultimate goal being to sell at a higher price per square foot than originally. Your plans for the property also have a bearing on its value. Does the house come with planning permission to extend, the option of acquiring additional adjoining land or converting outbuildings? Any room for improvement that builds a property’s value increases your future profit margin.
Laura Henderson is a property journalist, columnist and investment expert. Editor of Abode2 property magazine abode2.com, her latest book Tricks and Mortar: The Little Book of Property Wisdom is out now.