There is one rule I always advise people to stick to when they are looking for their first home; find something with potential. Of course, not many people do as they get lured into the ease of moving when everything is already in great condition.  However, if you can afford to put in the time and effort, the benefits financially and personally are difficult to overlook. This article looks at genuine property developer advice and how you can benefit without falling into one of the numerous traps.

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Property Developer Advice

Property developer advice

(Inset; The Candy Brothers)

Property developers can make a fortune quickly ‘flipping’ property and then selling it on to you. It is not rocket science and almost anyone could find some success, especially with the consistent rise of property prices. In fact, most developers will aim to make a minimum of 20% return on a project once they have sold. If you are looking for a house and buy off a developer, you may fall in love with it immediately, but remember that you will be lining their pockets! From a financial point of you, if you were to purchase your flat for £1m (we’re talking London prices here!) refurbishment costs could reach £150,000 but you are likely to end up with a flat worth £1.3m saving yourself £150,000. Sounds simple? Of course it’s not, but it is possible if you follow good property developer advice

In order to achieve this there are a number of areas that you need to be very aware of;

1. Finding the property

Normally when people start looking for a house, they have pretty standard requirements; number of bedrooms, outside space, period. Now, the most important feature needs to be comparative price. This is not comparing to other properties on the market, but properties that have sold and how much for. Every property that is sold will be registered and on Land Registry; http://houseprices.landregistry.gov.uk

This only shows what it has sold for an not floor plans or pictures. Rightmove and zoopla often show property details and what they have sold for, so another good source; http://www.rightmove.co.uk/house-prices.html

The best source, like most things though, are your own contacts. If you have a friend that is an estate agent, they will be in the best position to advise what good value is. Ideally, they will know the area you are looking in and can show you exact details of similar properties and price per square foot of what is selling on that street. Always remember when looking at property available to buy that most estate agents work in a similar way; in order to get instructed to sell a property, they will tell owners that they can achieve a higher price then their competition. By over inflating prices, when it comes to market, it is usually terrible value for the purchaser!

So, when you find a house/flat that needs some major refurbishment, in the area you want to live, with all the space to fit your requirements, find out what the price/square foot was of the last one to sell on that street and negotiate on the price.

2. Negotiating the price

Property that has been on the market for a long time is (usually) not moving for one reason: price. Either the owner is expecting more than is realistic, the agents have convinced them it is worth more than it is, or a bit of both. Either way, you are up against it when you are trying to purchase for a fair price.
The only way to negotiate in this situation is to use the facts. Show the agent comparable evidence of what has sold, you can even show your costs to renovate and what you expect it will sell for when complete. Owners generally hate the idea of selling their properties to someone looking to make a quick buck and sell it on. However, you are an ‘end user’,  not out to profit in the short term so they will be more receptive to your thoughts.

Remember that any offers you make to the estate agent, have to be put forward to the owner, so don’t worry about being cheeky with the first offer.

The home Owners alliance has a good guide to making offers and haggling the price here.

 

Next week we look at the next stage; building work and interior design 

 

 

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