In a competitive and fierce real estate market, buyers will go out of their way to get the home they want. And they have to fight hard – each real estate agency has an average of 511 registered home hunters but only 21 properties for sale, according to professional body Propertymark.
When it comes to sealed auctions and extreme competition, buyers need to stand out. They should have a lawyer in place and a mortgage deal in principle up front, while having money laundering approvals before submitting an offer can put them a week or two ahead of everyone else.
The goal is to instill confidence in the seller – and their real estate agent – said Alex Woodleigh-Smith of buying agency AWS Prime. “Agents can wield tremendous power in recommending you to their supplier. “
Understanding the motivation of a seller is the key to success for buyers, said Claire Northmore of the real estate agency Marchand Petit. “It is no longer enough to make the highest bid,” she explained. “Just being a cash buyer won’t set you apart from a crowd of cash buyers either. “
Meanwhile, those who are selling cannot afford to be complacent as buyers are savvy and will not overpay a price for a property that is not worth the money.
1. Offer delayed completion
The usual time between exchange of contracts and completion is 28 days. Now buyers are increasingly offering sellers flexibility on completion dates in an effort to secure a deal, said Jennie Hancock, of the buying agency Property Acquisitions. The parties will agree on a sale price and the buyer will still pay a deposit on the exchange, but the two will sign a contract agreeing to delay the completion date by a few months to a year.
This is very attractive to sellers who have not yet found a new home to buy. In October Roger Ball agreed to sell his four bedroom house in the village of Noss Mayo in Devon for more than £ 850,000. Two parties bid for the same amount, but the winner is the buyer who agreed to trade within 28 days but complete by the end of July 2022.
“It worked well, allowing us to look at homes with an exchange in place while our buyers also have some certainty,” explained Mr. Ball.
The process is done through lawyers and there are a few things to keep in mind, warned Annabel Dean of the law firm Farrer & Co.
“Buyers should request that the risk to the property – and the responsibility for insuring it – remains with the seller until completion. The buyer should also verify that their bank gives them leeway for deferred completion. because most mortgage offers are good for six months, “she said. Also note that you may need to search again.
2. Offer to pay the trade deposit to the seller
Many sellers are rich in assets but lack cash and need access to cash – to pay a rental deposit, for example, or for moving expenses. Instead of the seller’s attorney keeping the entire trade deposit (typically 10pc of the purchase price) until completion, you could agree to hand over a portion to the seller on the trade.
While this is a risk – the seller could leave and spend the money and not finish it – it can put your head and shoulders above another buyer, said Jonathan Rolande, of the real estate buying company House Buy Fast. “We paid part of the deposit to a seller so that he could buy a motorhome for a round-the-world trip.”
3. Meet the owners
It’s not everyone’s cup of tea, but if a salesperson is happy to meet, it could give you an edge, said Tim Giles of the UK Agency. “Sellers love their homes and ideally they would like to sell to someone who is really nice and sympathetic. I had 15 people to offer a house recently and the seller chose the person who took the time to talk.
David Blythman, who is in the process of selling his house in Devon through Marchand Petit, said meeting his potential buyers allowed him to choose between two similar offers over the guide price. “We could see the whites of their eyes and pass judgment on the personality rather than just bank references,” he said. “We did the same with the people we bought from, sharing a bottle of wine with them. “
4. Think outside the box
In a hot market, you have to prove yourself. One way to do this is to apply for a property search when you submit your offer – this shows how much you want a home and saves you time on property transfer.
If you are buying a leasehold and the lease needs to be extended, you must have owned the asset for two years. Typically, buyers will ask a seller to extend the lease, but faced with competition, they don’t have that luxury.
Helen Marsh, of the Forsters law firm, suggested that an enthusiastic buyer could accept the lease as is. “They would then ask the seller to serve the notice of extension of the lease on their own behalf and, in the end, cede the benefit of that notice to the buyer,” she explained.
Agents can ask buyers to enter into an exclusivity agreement, but these are not binding under English law. An alternative is an option agreement. “If you can persuade the seller to give you an option, the seller will be obligated to trade with you at the agreed price if you are willing to do so within a specified time frame,” Ms. Dean added. “This eliminates the risk of being gazumped.”
5. Do whatever it takes
Sometimes securing a home takes devotion – and flattery.
Ben Marchbank of Bedfords Estate Agency was selling property owned by an amateur artist. “The seller’s work adorned most of the walls, suggesting they were both prolific and unsuccessful. Of particular note is a 10-foot canvas in the lobby, a surreal miasma including distorted clocks and Munch-inspired faces.
The house went to the best final offers, and instead of taking the higher amount, which came from a cash buyer, the owner accepted a lower offer from a buyer with a house for sale. “The deciding factor was that the offer included £ 20,000 for the canvas in the lobby,” Mr Marchbank said.
1. Put your house in order
One in three home sales fail, according to the HomeOwners Alliance consumer group. While it might seem obvious, having everything in place by the time you hit the market can speed up a sale tremendously and even keep it from falling apart.
If the house is old or listed, consider having a survey done yourself, suggested Paul Clarke of the Mr & Mrs Clarke real estate agency. “We had a client who was selling a Grade II listed cottage and they didn’t want buyers trying to push the price up down the line, so they ordered a full investigation. It showed buyers that they were very transparent and sped up the process by at least a month.
2. Focus on potential
Consider making plans to illustrate the property’s development potential, such as adding a loft, patio furniture, or extension.
Matt Johnson, of real estate agency Johns & Co, said: “Many companies will offer simple quotes and plans for free. This can make a big difference to the curb appeal of your property, opening it up to other buyers looking for a home with room to expand.
3. Dress to kill
Make sure it looks as good as possible – we live in the Instagram age, after all. Amy Odell, UK Sotheby’s International Realty, said: “The initial print can make all the difference.