One may do a lot of research when selecting a holiday location, and when buying a car. Twenty times more time and effort should be put into buying or selling a property. Ignore my advice at your own peril.
The financial decisions involved in buying a home can greatly impact your lifestyle and wealth.
In the current times you will find some offers from developers: to pay your stamp duty, to finance the necessary deposit up to 25%, to buy your old home from you when you upgrade onto a bigger one, to pay your mortgage for a set period, and even offering to guarantee your house price value. As a first-time buyer one might want to take advantage of those, but the purchase decision should never be based solely on these factors. Make the right move, by focusing primarily on what you are actually buying, read the small print and get professional advice when in doubt. Never act under pressure.
How to Find a Good Deal by Yourself
A property purchase is made up of two items: the actual property and the finance behind it, which you can normally swap at some point. The property itself can usually only be sold or kept…but these days apparently, also ‘part-exchanged’.
When buying a house you should view at least 20-40 different ones, this is especially true for first time buyers. There are many homes to buy out there, so take your time. You might consider taking significant time off work to do this properly, to choose your investment wisely. Your home can really be a liability and not an asset unless bought wisely. You might have to work for the next 25 years to pay for it. A mistake in judgment will cost you additional years in the rat race to make up for.
We recommend you look online and register with estate agents, as well as looking for private vendors. You then must undertake actual viewings systematically.
There are clusters of locations where offer exceeded demand, leading house prices down even in the glorious periods of property boom. Nantwich in Cheshire for example was flooded with new built property.
You may even look up property sold prices for CW5, and compare what happened over the years since 2002.
To find the local house prices for house sold you will need the full address, including door number, flat number or letter. Remember that Flat A, can also be Flat 1 or ground floor flat, and a basement can be down as garden flat depending on the how the registry was made. Write this details down when you inspect a property.
Attention that those figures are based on prices for completed purchase, which corresponds to sales agreed a few months before, in a different period of the market. This may provide a distorted image of the current market. Moreover in times like this when the market is decreasing in value in an irregular fashion, it is very hard to gauge current market values. This factor is partly responsible for some professional developers making extremely low offers. But there is nothing new about this technique, as the pros should always do that anyways.
If you want to buy houses for cash, look into home foreclosures. You may begin by looking at what the expert competitors are doing online.
For search engines, such as Google, we found these words to be the most sought after:
Property auctions are only indicated for experienced developers, as there is an element of pressure and there is no pulling back, should you change your mind. If you want to become an expert, don’t waste your time with anything else but the best publication Property Auction Secrets.
Visible Factors That Influence the Value of Property for sale
Location of the property for sale
Gross internal area
Potential for development
Condition
What happens in the neighborhood when the sun goes down
Ask several estate agents what the price per square foot or square meter averages. E.g. £600 per square foot times a 600 square foot apartment means £360,000 is an indicative average price. If the property has some extraordinary feature, such as a terrace, this figure might go up by 10%.
By inspecting up to 40 properties you will have a good idea of what you should expect to get for your money. You’ll have also acquired a few good renovation ideas. This beats reading interior decoration magazines.
Non-visible Factors
Freehold property
Share of freehold property, still a good idea to check the length left on the leasehold within the share of freehold
Leasehold property: number of years left on the lease
Neighbors
Future developments in the area
Whether the houses for sale quickly
You can find info in the Home Information Pack HIP, which would have cost the vendor in the region of £300. Request the estate agent or vendor to show it to you (they will charge you if you want a copy though). If this is not available, make a written note to ask your solicitor to verify this important data right at the outset of the conveyancing process.
You might find out that the 105 year leasehold actually dates back to 1985, and has only 79 years left. Leaseholds can normally be extended, but if they go below 80 years (aka the ‘wedding date’) it will cost more. An indicative figure for a two bed flat in N1 ranges £10,000-£30,000.
As for the neighbours, I suggest you give them a casual polite knock on the door. This might avoid regret further down the line.
With respect to future developments in the area, your local council website has information on future planned developments and you can always drop by your local planning office between 9-5. Just ask the Planning Applications and Building Control staff questions.
That’s what we pay council tax for and these professionals love to talk about what they do when someone takes a serious interest.
Watch out for pros and cons of say new railways, roads or new housing estates. All these can play for or against you, depending on whether you’re buying or selling.
I suggest you visit the Building Centre in Holborn. They have a display model set and exhibit on development programmes for London, as well as interesting statistics.
Buy property like a professional. Even if you are buying your dream home, make sure it’s a sound investment, so it won’t turn into a nightmare. You’ll be paying interest on every pound you borrow to buy it, up to 300% by the end of it.
Tip
Buy a bargain property, getting some £50,000 off its market price.
Spend £25,000 refurbishing wisely, restoring its market price or higher, and putting the difference in your pocket. If the property is your main residence you pay no tax on the capital gain when you come to sell.
Check out our Tax Secrets section
Check out our Development section on how to renovate on a budget
