BUYING AND SELLING TIPS
When buying a property we generally consider the following:
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The reason for buying – if it is for investment, commercial or personal reasons.
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We look at the most suitable of the location investors want and give advice on alternatives if we are not satisfied with the choice made |
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The funds for purchase are then considered. In this situation we would want to know if the investor wants to make an outright purchase or get a mortgage. |
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As soon as we are sure that the investor is ready and the mortgage has been approved, we search for a property.
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The following should be considered when searching for a property.
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Go with someone who knows the area. Some neighbourhoods can look clean and good but are filled with hoodlums and drug addicts. These are obviously not safe for anybody, and not a good place for investment.
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For investment, a property close to good public transportation links will rent fast, and yield good investment returns. |
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A property close to shops and local amenities such as hospitals, schools, etc is also advisable. |
BUYING FOR PERSONAL USE
When buying for personal use, we ensure that our clients' personal requirements and tastes are taken care of.
In some cases we may feel the client can get a better deal for the same class of property in a better location, than the one desired by the client. In such a situation, we would advise the client accordingly with the bottom line being "value for money"
BUYING TO LET
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For investors who buy to let, the key point is for such an investor to get expected returns as and when due. We have a good network of managing agents in our areas of operation notable of which are the following:
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| LONDON: Day Property Services / Estate links U.K Ltd. |
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MANCHESTER: United Property Management.
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| U.S.A: Estate Links |
| SOUTH AFRICA : Abaden / Natal |
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We also have several other affiliates in most of the 50 states of the United States of America. With our experience in the foreign real estate market, tenant selection and rental expectation are highest on the ladder.
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| BUYING FOR RE-SALE |
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In several cases, we buy properties on behalf of clients who want to turn around funds, with the main aim of achieving a profit.
At this moment, several properties are being sold for 70 – 90% of their open market values at auctions or by private treaty and people who have the funds to buy outright are cashing in on this.
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The basic procedure is usually as follows:
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Identify the property with a potential for fast re-sale in the open market. If it is a property that requires repairs or modernization, the cost of repairs would be calculated by our builders (and guaranteed) prior to purchase. This cost will be taken into consideration before making a bid for the property.
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Immediately after the property is purchased and completed, we would put the property in the open market for a potential mortgage buyer who would eventually buy the property at its open market value.
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To give you an idea of possible margins achievable, the following is an analysis of two recent purchases. Both properties were re-sold in the open market.
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| A. LOCATION: PLUMSTEAD SE 18, LONDON (A 2 BED HOUSE) |
| DATE OF PURCHASE: |
May 2005 |
| PURCHASE PRICE: |
£120,000 |
| COST OF REPAIRS: |
£20,000 |
| TOTAL COST: |
£ 140,000 |
SOLD ON SEPTEMBER 2005 FOR £159,000
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| B. LOCATION: UPPER DARBY, PHILADELPHIA 19082(2 Bedroom Terrace House) |
| DATE OF PURCHASE: |
January 2006 |
| PURCHASE PRICE + COMPLETION COST: |
$48,000 |
| COST : |
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| COST OF REPAIRS: |
$ 9,500 |
| TOTAL COST: |
$57,500 |
SOLD IN MAY 2006 FOR $70,000
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| AUCTIONS |
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In recent times, vendors have found it easier and quicker to sell properties by putting them up for auction.
The only disadvantage to the vendor is the obvious fact that in almost all cases, such properties would be sold for less than the open market capital value. This is basically due to the fact that prospective purchasers who attend auctions, do so with a view to buying at a price less than the open market value of such properties while the vendor just wants to sell, as long as he achieves a base figure.
For the prospective purchaser, the auction is a great alternative. In some cases, properties are bought for as low as 60% of their open market value. This is usual in cases where the property is a repossessed one and the creditor only wants to recover the amount owed. As interesting as this sounds, there are obviously some basic constraints when buying real estate at an auction.
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The first obvious one is the fact that you have to make do with the properties on the list. If for example you want an apartment at St. Johns Wood and there is none put up for auction, you may have to settle for an advertised one at Marylebone, which is in a similar neighbourhood but not precisely where you might want.
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You would have to pray for some good luck to avoid "money bags" outbidding you. Sometimes you might be lucky to have one or two "jokers" going on a ride with you for few seconds, only to discover that your bid has been accepted with ease. |
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Your finance must be in place. You would be expected to pay about 10% of the capital value of the property as soon as the hammer falls and your bid is accepted. The balance would be due 14 – 28 days after the auction date in most cases. In the event of your inability to pay, you stand the risk of losing your deposit. Keys are handed over and the title passes as soon as payment is completed. However, whichever way you look at it, as long as you have your cash ready, you hardly have to wait for more than 30 days to get what you want |
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We receive details of all major auctions in the UK and in some states in the USA. Our representatives regularly attend auctions on behalf of clients and with the experience acquired over the years, we know where to get the good deals, sometimes buying prior to auction.
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