I’m often writing about how being a property developer is not a “Get rich quick” route, but in this post I’d like to point out how some good negociation techniques can help deliver you a life changing porperty deal that could set you up for life.
Let me explain. 5 years ago I was developing flats in South West London. I was given the opportunity to by a detached 3 bed house. It was a munter. It had been on the market for over 12 months and every agent in the area couldn’t shift it. I had just sold a flat and was looking for another to develop. The house had caught my eye in the local paper some 10 months ago so I was surprised to see it again online. I called the agent to understand what was going on. They told me that there had been a number of buyer fall through and the seller was now desperate to move on. The asking price was well in excess of what I could afford, but the economic climate was against everyone in 2008, so I thought I’d put in a really low offer to see what reaction I got.
I thought the agent would call me back with an out right “No” but to my surprise he tried to negotiate with me. Now here’s my first tip in the art of negotiation. When you have nothing to loose (i.e. nothing to sell) you are in the winning position and you have to use it. Stand your ground whenever an agent tries to necotiate the price up. Remember there is always more development opportunities around the corner, don’t get blinded by this one opportunity, their will be others.
Back to my story. When I refused to move from my original offer price (30% below the asking) I was expecting things to go silent. 2 days later I got a call…
“Are you sitting down” said the agent. “my client would like to accept your offer”.
I had managed to buy a 3 bed detached house for the price of the 2 bed flat. This was a life changing deal and it was all because I knew the vendors position and how long the property had been on the market. Proof that sometimes you need to stand your ground when you know you are in a winning position. Proof that you should always make a note of propoerty that struggle to sell and deliver highly motivated sellers. Proof that you can make life changing deals even when the property market is in the toilet.
Most of the time being a property developer is pretty hard work. Finding development, raising finance, construction, and then the same again but every now and again you get given (by chance mostly) a life changing opportunity that can truely change things around.
London stands alone as a property market in the UK. A transient Place where people from all over the world come to work, study and live. This gives the London Property Market a unique status as one of the world most expensive places to live. An average house prices is nearly £500k and a 1 bed flat is close to £200k, compare that to the national average house price of £240k and you can see why London can be an expensive place to live.
Looking for property for development? Dont know where to start? New to property development? You’ve probably been tempted by a few companies promissing to offer a list of reprossession and pre auction properties for a ‘small fee’ from a Google search. I know, I was in the same boat. Some years ago I didn’t know where to start. The estate agents all seemed to want so much and I understood it was their job to get the best price they possibly could for the properties they wanted to sell.
I needed a way of buying property cheap.
If you’re a regular visitor to this blog you would know by now that Property development is not a quick way to make guaranteed profits from your time and investment. The property developers path is full of risks. It’s why so many developers get insurance cover for any construction work they undertake. Now there’s a few specific Insurance areas of cover I’d like to outline below:
Let’s be honest, no one likes estate agents. For outsiders they can seem intimidating places, full of aggressive sales people looking to sell you something you don’t want.
But before you judge them too hard here something to remember. Estate agents work on commission, they get paid on the sales they make. They also work on behalf of the vendor to get the best sale price for their commission. This is perhap why they’re often seen in such a negative light. Trying to push up prices and sell small cramped studio flats as ‘pier d’teir’!!
I’ve heard a lot of complaining from my close Property Developer friends about a lack of mortgage products in the market for developers. Borrowing money on assets that are worth less than the market rate isn’t something banks like to do, so there’s nothing new here. However if you are struggling to get the finance you need and you’ve tried independent advice to no avail then you could try these sources. Just keep in mind I’m not offering financial advise here, just some good sources of info for your own due diligence.
I’ve recently completed a loft extention to a 4 bedroomed property in Surrey. As anyone trying to sell right now will tell you, February is a tricky time to sell.
I was never much of a reader when I started to develop property back in my 20′s but I did read a couple of books to help me figure things out. If I was to take a walk back in time, to say 1993 there’s probably a few thing’s I’d like to say to my younger self.
Most people looking to buy a property will want to visit it first. Many will have done some research before their initial viewing – typically, resent sold prices, google street view etc. But what should you look for when you’re at your first viewing?
Become a property developer and your life instantly fills up with stress and strain. So why do so many people take the plunge and become a property developer? Here I try to list the four main reasons why developing property can be the best move you can make. But be warned property development isn’t for the fait hearted. Borrowing large sums of capital can be risky and in some cases people can become bankrupt owing money back for the rest of their life. But if you understand the risks and you’re prepared to see hardship and the stresses and strains that being a property developer can bring you an amazing lifestyle, if you’re prepared to knuckle down and deliver.