6-Steps to Success

 

 

Buying property in London sets the pulse racing. It is a city full of history which, today, is a melting pot of cultures from every point of the globe. Through the mists of time the London property market and its denizens have prospered. But, as astute investors know, the market direction isn’t perpetually on an upward trajectory.

 

The moral of the story is this: You need to have your eyes wide open before venturing into this market. Whilst every customer's needs are unique, and every property deal has its own distinct nuances, the path to successful property investment follows time-honored principles. These are the foundations of our 6-Steps to Success. It is the formula that minimizes risk and maximizes reward.

 

 

Discover

 

One of the fatal real-estate mistakes is embarking upon a property search without fully understanding your needs and objectives. This leaves you vulnerable to predatory marketing practices and making rash decisions. We employ a rigorous Discovery process to build your Property Investor Profile. This is your roadmap to navigating the intricacies of the London property market.

 

There are three easy steps to start you on your journey:

Complete online Discovery questionnaire

Your journey starts with a simple five minute survey covering essentials such as:

  • Purpose of Purchase
  • Budget Parameters
  • Size Requirements
  • Project Scope
Your responses set the tone and direction of your property search.

Follow-up discussion with London's House Detective

From your initial discussion with London's House Detective we build your Property Investor Profile and project Brief.

 

Think of this along the lines of meeting with a wealth management professional to map out your financial goals and lifestyle requirements prior to investing in various asset classes. We want to ensure that we have captured the totality of your needs and objectives in order to identify the specific dimensions of the property that meet your unique requirements. 

 

Being specific matters. We’re not interested in finding you any property that meets your Brief. Our mission is to find you that one property that is best-in-class.

Review the Brief & sign Agreement

Next we send you the Brief containing your Property Investor Profile and our recommendations concerning the scope of the property search.

 

Accompanying this will be an Agreement that spells out our commitment to you along with standard terms and conditions. Once you sign and return this to us along with your deposit, we’re ready to go!

 

Search

 

Great. With your completed Brief, we now have the foundations for a successful property search. Now it's time to execute tactically on our agreed strategy. There are three phases to locating your ideal property:

 

Initial search

We know the precise dimensions of the property that fits your Profile. So, the only ones that you will be looking at are those that meet your Brief. No cluttered inboxes or wasted time on phone calls.

 

Your property search will be executed both on and off market: those properties that are on-market are in the public arena; off-market properties are listed with an agent but don’t appear on any marketing domains. Just as many of the best job opportunities are never found in public searches, the same is true of property.

Property shortlist

Once your property requirements are registered with estate agents and developers we begin the rigorous and painstaking process of sifting through the available options.

 

Each property is critically assessed against the criteria embedded in the Brief. Only those that measure up make it onto the shortlist for your consideration. We give you our expert views on the pros and cons of each property. You receive regular updates and we discuss these with you to understand your preferences and refine the search.

 

Over time, we trim this list down to the final options you want to seriously consider.

Final selection

Now comes the time to apply the blowtorch to your final options. This begins with your physical viewing of the properties. This can be facilitated in one of two modes:

  • Live, interactive tour streamed to you in Hong Kong          
  • Physical assessment by yourself or nominated representative          
London's House Detective hosts both sessions, providing you the opportunity to assess each property and hear his expert views. Once we have exhausted the search process you will be well satisfied that the property you select for negotiation is the right one.

 

Negotiate

 

Excellent. You have pinpointed that one property that meets the criteria of ‘best-in-class’ that has been the singular focus of our search. Next comes the critical process of negotiating terms that provide you with a winning hand. Consistent with the London House Detective's modus operandi, this phase of the project is executed in a strategic fashion.

 

There are three distinct elements to our negotiation playbook:

Understanding the relationship between Asking Price and Market Value

Many buyers experience the flush of success that comes from playing hardball and negotiating a discount off the selling price. The downside may be that the asking price was artificially inflated. So, it is quite possible they have unwittingly paid above market value even with this discount.

 

The calculation of a property's asking price is solely at the discretion of the seller and listing agent. The property may be priced artificially low to encourage a bidding war or it may be priced high factoring in a discount by negotiation. In either case, the asking price shouldn’t be confused with its market value.

 

London's House Detective assesses the market value of a property based upon a range of macro and micro factors including:

  • General market sentiment/direction
  • Local demand for property style
  • Imminent infrastructure developments
  • Amenity/condition of property        

Entering into the negotiation, it is essential that you understand the property's market value. This anchors the ensuing discussion on negotiation strategy and tactics.

Determining the seller's motivation

When selling a property, a vital role played by the estate-agent is to provide an assessment of how motivated each potential buyer is. This aids the seller in determining where the sale price is likely to settle. We flip this orthodoxy to discover the backstory to the sale and the seller's motivations.

 

Understanding how motivated the vendor is to sell their property is a key determinant in building your negotiation strategy.

Formulating the negotiation strategy

The negotiation parameters now take shape built upon understanding:

  • The property's market value and relationship with its asking price
  • How motivated the seller is to negotiate on the property's asking price.

There are several other variables that are accommodated in determining your negotiation strategy:

  • The underlying market direction
  • Buyer competition for the property
  • Your preferences relating to the negotiation parameters.
Once these factors have been assessed and discussed, London's House Detective will formulate the recommended negotiation strategy. This will be customized to the specific circumstances of your deal with the objective of securing you the best possible terms.

 

Document

 

Congratulations. Your offer has been accepted. But, before you pop the champagne cork, there is work to be done. Critically, the sale of the property is only legally binding at the point of exchange of contracts. Up until then, either party has the right to withdraw from proceedings without penalty. So, our objective is to reach exchange of contracts in a timely fashion whilst diligently managing the processes of:

 

Conveyancing

This is all about sorting out the legalities of the deal. The process starts when your offer on a property is accepted and finishes when you receive the keys. You can engage either a conveyancer or a property solicitor for this work. In the lead up to exchange of contracts they will be responsible for:

  • Conducting legal searches with various authorities including the Land Registry and local authorities to ensure there are no factors you should be aware of that would impact your purchase
  • Requesting a draft contract from the seller's solicitor and confirming that the terms are satisfactory
  • Reviewing your mortgage documentation        
Theoretically, you could choose to engage a solicitor once your bid has been accepted but we recommend that you do so beforehand. As part of our Turnkey Solutions, we strongly encourage you to engage the services of PCB Lawyers. Over two generations they have professionally served the legal needs of property buyers both in the UK and internationally, with a specific focus on Asia-Pacific.

Mortgage approval

Unless you are financing the property entirely from cash, you will need to organize a mortgage on the property. As an international investor this process is more complex than for it is for local buyers due to the absence of a local credit score that lenders can access. There is another compelling reason to start the mortgage application process before you agree terms on a deal. Your offer will be more attractive to a seller if you have obtained mortgage pre-approval. This will level up the playing field with local buyers.           
Mortgage brokers are now a fixture of the UK home loans market and for offshore buyers there are good reasons to go down this path. We strongly encourage you to engage the services of Alexander Hall Associates (AHA) who will assist you with:

  • Access to mortgage providers and products specifically targeted at international investors
  • Completing the necessary paperwork for the mortgage application.

Property survey

Your property purchase represents a significant financial investment. It is critical that the underlying condition of the property is consistent with your expectations. A property survey from a Royal Institute of Chartered Surveyors (RICS) surveyor will provide you with this peace of mind.

 

This service should not be confused with the survey that your lending institution will conduct. The objective of that survey is to establish the value of the property for loan valuation purposes, not to verify the underlying condition of the property or identify any serious defects.

 

Even if you’re buying a new-build property, it is still a good idea to conduct a survey to identify any snagging issues including underlying problems with electrics or plumbing. The RICS offers a choice of surveys that are geared to different property types/conditions.

 

London's House Detective will find a RICS surveyor for you in the area you have purchased and liaise with them as required.

 


Exchange

 

It's yours. With exchange of contracts your property purchase is legally secured. This is the day where identical contracts, signed by both seller and buyer, are formally exchanged by the solicitors representing both parties.

 

Prior to Exchange of Contracts

It is essential that you have completed all necessary tasks before exchange of contracts including:

  • Agreed the terms of the offer, including for fixtures and fittings
  • Reviewed the property survey and satisfied yourself as to its condition
  • Satisfactory completion of all relevant searches by your solicitor
  • Receipt of mortgage offer in writing
  • Sorted out funding for the contract deposit, normally 10% of the purchase price
  • Agreed on a date of completion for the sale which will appear in the contract.
Finally, you must have reviewed and signed the contract.

Mechanics of Exchange of Contracts

The solicitors representing you and the seller will read out the contracts over the phone, which is recorded, to ensure the contracts are identical. The two parties then immediately send copies to each other by post.

 

Finally, you will need to pay an exchange deposit to the seller, providing confirmation of your intentions to buy the property.

Next Steps

The next significant step is completion, when you collect the keys and take physical possession of the property. This generally occurs 7 to 28 days after exchange of contracts. In the interim period, your solicitor will assist you with:

  • Transfer of ownership with the Land Registry
  • Providing a copy of the title deeds to your mortgage lender
  • Notifying the freeholder if the property is leasehold

Other important tasks, which you need to manage include:

  • Physically inspecting the property to ensure that all the fixtures and fittings are in place and that everything is in good order.
  • Organizing insurance cover on the building.
  • Informing utility companies of change in ownership.

If the property purchase is for investment purposes, now is the time to finalize property management arrangements. We strongly recommend you engage with Touchstone and access their comprehensive end-to-end solutions suite.

 

 

Complete

 

Finally. The day has come for you to collect the keys to your new London home. On completion day, your solicitor will arrange for all the required monies to be transferred electronically to the seller's solicitor, including your mortgage funds. Once the seller's solicitor provides confirmation of the receipt of funds to the seller's real-estate agent, you are free to collect the keys.

 

Statutory Costs

Regardless of whether you are buying the property to occupy or for investment purposes, your solicitor will organize for the following disbursements to be paid:

  • Stamp Duty Land Tax
  • Search fees
  • Land Registry registration fees

The Paperwork

With the purchase of your property comes considerable paperwork that you should immediately file away:

  • The sale contracts
  • The Energy Performance Certificate (valid for 10 years)
  • Correspondence from your solicitor, mortgage broker/funder and surveyor
  • Safety certificates, warranties and guarantees

Having this information readily to hand will prove useful when the time comes to sell your property.

Next Steps

What happens next depends upon the property condition and whether the property has been purchased for investment purposes or to occupy.

 

If the property is to be leased out, and is in good order, Touchstone will have marketed the property and be screening potential tenants ready to move in. With the assistance of Pineapple Interiors you will have made the decision on furnishing options.  

 

If you are going to undertake building works of any description it would be prudent to have engaged Pineapple Interiors in advance of contract exchange so that you are able to commence work shortly after completion.

 

Regardless of what your intentions are, we will ensure that once you take possession that you are ready to take the next steps. Because completion date doesn’t so much represent the end of your property purchase journey but the exciting beginning of your London home ownership.