Ten ways to win in the fierce real estate market
In a competitive and cutthroat real estate market, buyers will do whatever they can to get the home they want. And they have to fight hard – each estate branch has an average of 511 registered house hunters but only 21 properties for sale, according to trade body Propertymark.
When it comes to sealed deals and extreme competition, buyers need to stand out. They should have a lawyer in place and a mortgage agreement in principle upfront, while getting money laundering approvals before submitting an offer can put them a week or two ahead of everyone else.
The goal is to give the seller — and their real estate agent — confidence, said Alex Woodleigh-Smith of buying agency AWS Prime. “Agents can wield considerable power in recommending you to their provider.”
The key to success for buyers is understanding the seller’s motivation, said Claire Northmore of real estate agency Marchand Petit. “It’s no longer enough to make the highest bid,” she explained. “Just being a cash buyer won’t make you stand out from a crowd of cash buyers either.”
Meanwhile, those selling can’t afford to be complacent because buyers are savvy and won’t pay an inflated price for a property that isn’t worth it.
1. Offer Deferred Fulfillment
The usual time between the exchange of contracts and the realization is 28 days. Buyers are now increasingly offering sellers flexibility over completion dates in a bid to strike a deal, said Jennie Hancock of buying agency Property Acquisitions. The parties will agree on a sale price and the buyer will still pay a deposit upon 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 yet to find a new home to buy. In October, Roger Ball agreed to sell his four-bedroom house in the village of Noss Mayo, Devon, for more than the asking price of £850,000. Two parties offered the same amount, but the winner was the buyer who agreed to exchange within 28 days but 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 certainty,” Ball explained.
The process is done by lawyers and there are a few things to keep in mind, warned Annabel Dean of law firm Farrer & Co.
“Buyers should request that the risk to the property – and the responsibility to insure it – remains with the seller until completion. The buyer should also check that their bank allows them leeway for deferred completion , as most mortgage offers are valid for six months,” she said.Also note that you may need to repeat searches.
2. Offer to pay the exchange deposit to the seller
Many sellers are asset-rich but cash-poor and need access to cash – to pay the deposit for a rental, for example, or for moving expenses. Rather than the seller’s attorney holding the entire exchange deposit (usually 10% of the purchase price) until completion, you can agree to return a portion of it to the seller upon exchange.
Although it’s a risk — the seller could leave and spend the money and then not finish — it can put you head and shoulders above another buyer, said Jonathan Rolande, of the buying company. real estate 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, it could give you an edge, said Tim Giles of the UK Agency. “Sellers love their home and ideally they would like to sell to someone who is really nice and friendly. I had 15 people offering a house recently and the seller chose the person who took the time to go and have a chat.
David Blythman, who is in the process of selling his home in Devon through Marchand Petit, said meeting his potential buyers helped him choose between two similar offers at the target price. “We could see the whites of their eyes and make judgments on personality rather than just bank credentials,” 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 make a property search request at the time you submit your offer – this shows how badly you want a home and saves you time transferring property.
If you are buying a leasehold property and the lease needs to be extended, you must have owned the property for two years. Typically, buyers will demand that a seller extend the lease, but in the face of competition, they don’t have that luxury.
Helen Marsh of the law firm Forsters suggested that an enthusiastic buyer could accept the lease as is. “They would then ask the seller to serve the lease extension notice 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 grant you an option, the seller will be obligated to trade with you at the agreed price if you are ready to do so within a specified time frame,” Ms Dean added. “It eliminates the risk of being gassed.”
5. Do whatever it takes
Sometimes securing a home takes dedication – and flattery.
Ben Marchbank of Bedfords estate agency was selling a property owned by an amateur artist. “Vendor’s work adorned most of the walls, suggesting they were both prolific and not very successful. Of particular note is a 10-foot canvas in the lobby, a surreal miasma comprising distorted clocks and faces inspired by Munch.
The house was put to best final offers and instead of taking the highest sum, 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 bid included £20,000 for the canvas in the lobby,” Mr Marchbank said.
1. Get your house in order
One in three home sales fail, according to consumer group HomeOwners Alliance. While it may seem obvious, having everything in place by the time you hit the market can dramatically speed up a sale and even prevent it from collapsing.
If the house is old or listed, consider having an expert do it yourself, suggests Paul Clarke, of the real estate agency Mr & Mrs Clarke. “We had a client selling a Grade II listed cottage and he didn’t want buyers trying to drive the price up the line, so he commissioned a full survey. This showed buyers that they were very transparent and sped up the process by at least a month. »
2. Focus on potential
Consider drawing up plans to illustrate the development potential of the property – such as adding a loft conversion, garden room or extension.
Matt Johnson of real estate agent Johns&Co said: “Many companies offer quotes and simple plans free of charge. It can make a big difference in the 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 age of Instagram, after all. Amy Odell, from UK Sotheby’s International Realty, said: “The initial impression can make all the difference.