Buying a flat...
Discussion
I am looking to purchase a flat with a friend very soon.
We are looking for a 2 bed new-ish flat in Essex near a station with easy access to london. (This will be rented out)
Now - we want to earn out of buying the property, for example, just putting in plenty of silly offers on a number of flats (hopeing someone will accept). Then keeping as a long term investment maybe taking some money out as we pay of the mortgage. (to possibly fund another purchase)
What I want advice on is people's experiance with placing 'silly offers' and what you think a 'silly offer' is these days. Our budget it £170k - £200K (all sounds a bit silly to me!)
Anywhoo, say a flat was on the market for £200k (and it was worth that) what should I offer? £180k? I havent never done anything like this but I rekon its the numbers game and maybe someone is willing to take a low amount for a quick sale?
What are your views?
Sam
We are looking for a 2 bed new-ish flat in Essex near a station with easy access to london. (This will be rented out)
Now - we want to earn out of buying the property, for example, just putting in plenty of silly offers on a number of flats (hopeing someone will accept). Then keeping as a long term investment maybe taking some money out as we pay of the mortgage. (to possibly fund another purchase)
What I want advice on is people's experiance with placing 'silly offers' and what you think a 'silly offer' is these days. Our budget it £170k - £200K (all sounds a bit silly to me!)
Anywhoo, say a flat was on the market for £200k (and it was worth that) what should I offer? £180k? I havent never done anything like this but I rekon its the numbers game and maybe someone is willing to take a low amount for a quick sale?
What are your views?
Sam
All to do with the market conditions and position of vendor and buyer.
Do your research about the vendors position - and be sure to put yourself in a strong buying position.
If the vendor needs/wants to sell quickly, and you can move quickly then you are in a strong position.
e.g. If you offered £180k, but you still had to sort out a mortgage etc. etc. - Not very strong. If you offered £180k as a cash buyer, so could move quickly then who knows - you may be able to get away with it.
I remember hearing that 1 in 3 sales falls through, so unless you are in a strong position they may well reject your offer and hold out for a better one.
You have nothing to loose by making low offers if you have plenty of time to look, apart from respect from Estate agents if you make really silly offers! Estate agents have an obligation to pass on any offers to the vendors, but you may end up lower down in their call list if you consistently make very low offers.
For good profit, may be worth looking for properties that need a bit of work doing - Even if it's just that the place needs painting! - This can put a lot of buyers off, which is silly as it takes no time to sort out. Lots of buyers have no imagination and could be instantly put off by horrible decor!
As you have said you will need to get a mortgage, I would advise you (if you have not already done so) to look into getting a pre agreed mortgage sorted so it is in place for when you want to make an offer - And sell this fact to the estate agent. It's in their best interests to get the sale completed asap too!
Also, i think 5% - 10% below asking is not too ridiculous (Can always put in a low offer then up it a bit if you really like the place!) - You will soon get to know if you are consistently offering too little!
Do your research about the vendors position - and be sure to put yourself in a strong buying position.
If the vendor needs/wants to sell quickly, and you can move quickly then you are in a strong position.
e.g. If you offered £180k, but you still had to sort out a mortgage etc. etc. - Not very strong. If you offered £180k as a cash buyer, so could move quickly then who knows - you may be able to get away with it.
I remember hearing that 1 in 3 sales falls through, so unless you are in a strong position they may well reject your offer and hold out for a better one.
You have nothing to loose by making low offers if you have plenty of time to look, apart from respect from Estate agents if you make really silly offers! Estate agents have an obligation to pass on any offers to the vendors, but you may end up lower down in their call list if you consistently make very low offers.
For good profit, may be worth looking for properties that need a bit of work doing - Even if it's just that the place needs painting! - This can put a lot of buyers off, which is silly as it takes no time to sort out. Lots of buyers have no imagination and could be instantly put off by horrible decor!
As you have said you will need to get a mortgage, I would advise you (if you have not already done so) to look into getting a pre agreed mortgage sorted so it is in place for when you want to make an offer - And sell this fact to the estate agent. It's in their best interests to get the sale completed asap too!
Also, i think 5% - 10% below asking is not too ridiculous (Can always put in a low offer then up it a bit if you really like the place!) - You will soon get to know if you are consistently offering too little!
It all depends on how long they have owned the property and the price at time of purchase.
For example,
Say I bought a flat for £120,000 ten years ago in central London.
3 years ago a couple buy the flat next door (identical) for £210,000.
Today both flats are worth £260,000.
My flat has gone up in value by £140,000
The couple next door have seen their flat increase by £50,000.
If you're after a lower purchase price I would be your best bet.
I am more likely to accept a lower price because I still have made a large gain.
I might need a quick sale to free up some capital or am moving or changing jobs.
These are my personal thoughts...seek professional advice always.
For example,
Say I bought a flat for £120,000 ten years ago in central London.
3 years ago a couple buy the flat next door (identical) for £210,000.
Today both flats are worth £260,000.
My flat has gone up in value by £140,000
The couple next door have seen their flat increase by £50,000.
If you're after a lower purchase price I would be your best bet.
I am more likely to accept a lower price because I still have made a large gain.
I might need a quick sale to free up some capital or am moving or changing jobs.
These are my personal thoughts...seek professional advice always.
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