Blog

Archive for July, 2009

Assessing Motivation of a Property Seller

July 19, 2009

Every property investment buyer is looking to make a safe investment, and a basic prerequisite for doing so is to find out a motivated property seller, which, by the way is not very difficult. All it takes is to think like a seller and understand the basic reasons behind a motivated sellers desire to sell property. 

 

If you want to make great deals on a regular basis, then you need to step in the seller’s boots and understand the philosophy of a motivated property seller. Generally there are four categories of a motivated seller:

 

  • A seller facing problems such as divorce, bankruptcy, law suits, death, health problems etc.
  • Their life is undergoing drastic changes like retirement from job, job transfer, relocation or increased mortgage repayments etc.
  • They are eyeing other opportunities like stocks, shares, business and other speculative activities.
  • They are looking for the right price; if they get the right price, they will proceed otherwise they will withdraw.

 

Analyzing motivation factor in property sellers is relatively simpler when it comes to homeowners. They are usually a simple lot, who have not acquainted themselves with the skills and tricks of a regular investor.

 

A motivated seller will not be too shy to answer the main question of why a he or she wants to sell their house when asked by an investor. When such a question is thrown towards an ordinary homeowner, he or she will take no pains to conceal the truth and will come out all guns blazing. He or she will readily let you know whether it is their divorce or if he or she is planning to relocate. But extracting the “real” reasons for a regular investor can be somewhat difficult.

 

But this difficulty does not mean that the motivation factor is not valid here, in fact, it’s just that the replies are more ambiguous. It is a common mistake committed by most investors when they assume that they are aware of the true motives of the other party. Every one has their own needs and preferences; while most sellers are price-motivated, there are others who do not care too much about price and there are some other factors that are influencing their actions.

 

In order to get the seller speaking about the exact motivation, you need to spend some time in chalking out your strategy and formulating well thought out questions. It is a fact that when you ask the same thing, but with different terms and words, you often get a very different answer. In order to learn the true motives behind the sale of a house, you need to do some homework. Here are a few good examples of questions that are designed to extract facts out of sellers:

 

What in your opinion is the best feature of your property? Is there anything that you would desire to change?

 

What was the reason you bought this property over another in the market? Have you sold a similar property in recent past?

 

Why are you asking this particular price for this house? Do you have any other property? Any particular reasons why you picked this one to be sold? Are there any steps that you have taken to prepare this house for the property market?

 

By asking indirect questions you can dig to the core of their decision making. This method is much more effective as compared to asking, “Why Are You Selling This House?” Different people have different reasons for selling their property. For some it may be the education plan for his little ones, while others may be planning for their time after retirement. No matter what the reason is, as a buyer it is important for you to learn the true motives of the property seller, and asking cleverly worded questions will help you get to the root of a sellers motivation

  • Share/Save/Bookmark

What Questions to Ask Property Sellers

July 19, 2009

After doing all the hard work in setting up the property buying advertisements, distributing the leaflets, erecting the banners, running a website campaign to attract motivated sellers and your phone starts buzzing, now is the time to reap all the benefits of your efforts. When you get a call from the seller, it is important to ask the seller the questions which matter. This article sheds light on five of the most important questions you need to ask the seller in order make sure that the property investment deal you are potentially taking on is right for you.

 

It is quite obvious that the first thing you will need to ask are the sellers personal details such as name and other particulars so for when you to address them both during the conversation now and the future; these questions fall under the category of common sense questions, but this article will be discussing some other more significant questions.

 

  • To start with you need to know the exact location of the property and the general surroundings. Asking the exact address, the type of property (terrace, detached…) number of bedrooms and bathrooms, garden and garage and other similar information from the seller is important. Another question to ask is how close are the amenities such as the nearest shopping centre, schools, transport etc. Your goal should be to squeeze out as much information as possible.
  • You must also address questions based on the actual state of the property. You must put direct questions to the seller about the possible repairs needed to the house. You can gain a better understanding by learning when the last time the house was upgraded. Your special attention must be directed towards, roof, windows, flooring, boiler and heating, bathrooms, electric wiring and plumbing in the house.
  • It is also imperative to learn the basic motive behind the offer to sell the house. You should try to extract the true reasons from the seller, by being frank and going into details. The most commonly given reason is need for money, but to be honest this is not always the real reason. For instance, if the buyer says that he requires instant cash to pay off an impending debt, then this sounds much more realistic. The reason why you need to insist on knowing the real reason is that you do not want to get into any unnecessary hassle that may emerge later on after the purchase of your buy to let property.

Asking the reason for the sale will also help you assess the degree of motivation by the seller. A seller who is on the verge of repossession is likely to be much more motivated and hence likely to offer a better price than someone who is simply looking to move for upgrading their house. So pay particular attention to this part to avoid wasting time chasing the unmotivated seller who may end up wasting your time with a bad price and even changing his mind.

  • Now comes the part where you learn about the financing of the property. You need to know about the loan balance of the house, if any, while you must also enquire whether the loans or taxes are done with or not. Putting across queries about the 1st, 2nd and possible 3rd mortgage amounts is also essential. The more you learn about the financing of the house, the more informed you will be to know what offer the seller actually needs to make the sale possible.
  • As already touched on above, you can check the motivation levels of the sellers by offering to pay the purchase amount of the house in cash. You can ask the property seller to lower the price of the property on the grounds that you offer to pay wholly in cash. If the seller is in need of a quick transaction then, it is more than likely that he will lower his price, giving you the house at a cheaper price.

 

It is always worth remembering that no matter how direct or demanding the question is, you need to be polite and courteous in your manners. These feelings can only be generated if you keep in mind that you are there to help the seller get out of his or her financial woes. By putting across these questions, you will weed out any unmotivated sellers

  • Share/Save/Bookmark

Property Investment for Beginners

July 7, 2009

Property investment business can be a highly rewarding enterprise, and many opportunities for beginners are available. Property business gives back results according to the input made by the investor. If an investor is aware of what he is doing, then high profits and great money making prospects will come his way. For every starter there are a few facts that must be learnt before getting into the property investment business.

Following are four mistakes which are committed usually by newbie property investors:

Fixing the Price:

Many starters in property often make a mistake of paying too high a price for a property not worth the money. Knowing which property to buy and what price to fix for it are things that most newbie investors learn by experience. But over paying can be a huge obstacle in the success of your business, and staying calm, consulting experts and making price comparisons can help you overcome this problem.

Get Your Team of Professionals Together:

Another common mistake is that most investors indulge in the property business without any team of professionals. There are many aspects of buy to let property investing which requires expert services that need handling by experienced people. Rather than testing your own nerves and skills by handling all things single-handedly it is better that you immediately get a team of professionals together that can get your business operational. This team will act as the foundation of your business, and if it is strong and powerful, your business will never collapse.

Overcome Your Fears:

Every new investor is over cautious in his early days, as he always thinks that some catastrophe may befall due to his negligence. While remaining alert against any possible danger is always good, being procrastinate will slow down the operations of you business and hamper your development in the property market. By hiring a team of experts in the property market, you should build confidence that you will make some informed decisions when selecting property deals.

Explore the Market And Learn the Trade:

It you have entered property investment with the intent to earn your living from it, it will be worth your while to spend money and time to learn the tricks of the trade. You always require some formal training or education about the various aspects of property investing. Most new comers make the mistake of making the investment, without having any know-how about property investment. They do so because either they do not realize the importance of learning or they want to save some money. But you must realize that spending a little time and money in learning the things that can save you thousands of pounds in potential losses or help you gain significant profit will always be worth doing

  • Share/Save/Bookmark

Property Investment Mistakes to Avoid

July 7, 2009

Investment in property has the potential of being a complex process, confusing many and inducing them to commit mistakes. In order to successfully accomplish the many steps in property investment, you need to use free property tools as they turn out to be more than useful in assisting you in making the right decision.

As a new investor in property, there is always the chance that you will make mistakes along the way, but you must make sure that you avoid making the following five commonly mistakes committed in property investment:

Do Not Jump Into Investments Without a Plan:

It is perhaps the worst and costliest mistake which many investors commit, as they jump into investing without formulating any plans. Doing so is reminiscent to sabotaging all your efforts and ensuring deliberate failure. For all those who intend to earn through their investments, making prior plans and strategies is a necessity.

Avoid Flip-Flopping If You Hit Success:

It is quite normal to look for some other strategy if the old one did not work out. But once you hit success with a particular property investment strategy, then there is no point in doing the unnecessary flip-flop.

Exceeding Your Budget Is ‘Disaster in the Making’:

It is best to evaluate how much you must pay on a monthly basis, and then follow this plan religiously. Hunting property that is far beyond the limits of your budget will be a wild goose chase; therefore, you must not always follow your instincts in all situations. If you do so, this will potentially bury you under huge debts.

Becoming Part of the Crowd Will Not Help:

There are so many people involved in the property market, and the reason for that can only be put down to the condition of the economy. If you enter the property market and start doing what others are already doing, then it will not help your purpose. Rather than becoming a part of the existing crowd, you need to be introspective and search what you can do that will give you an advantage over the rest.

You Need To Be Persistent to Come Out Successful:

Another common mistake on the part of young investors in property is that they are not tenacious and often change their course after facing early difficulties. Your desire to succeed in property investment must be more powerful than your fear of failure. If you contribute all your efforts and resist in the face of adversities in the initial stages, high profits will eventually come your way.

Property market is a place where only those who plan for the future survive. Going in without drawing out any plans will be a folly; therefore, gathering prior information before investing in property is a way to ensuring better chances of success.

  • Share/Save/Bookmark

Investing in Property - Things To Know

July 6, 2009

Investing in the property market can help you create many profitable assets, while offering you equally great opportunities to get wealthy. But as experience has shown, the initial step in anything new can be quite hard, and proper planning is required to turn the rest of the property investment journey into a success.

Here are some useful suggestions which can help you make a bright beginning in property investment:

Get Your Team In Good Shape:

To enter the property investment business all alone is nothing but the perfect recipe for failure. Property business is a team game as you need a number of experts and professionals who can help you handle different aspects of work. A lot of technical and legal expertise is also required, which further pushes a person towards hiring some experts. You would need a good lawyer, an authentic accountant, builder/ contractor, mortgage broker and a tax advisor as well as a good property supplier if you are relying on others to source investment deals for you..

Property experts can help you get hold of the best property at the lowest possible prices, while the contractor will have the task of checking the health of the property and what it would take to repair it. Legal and tax advisors are also indispensable as they have the mastery over legal and technical issues far beyond the knowledge of a common man. Keeping hold of proper accounts is also very important as your clients will have more trust on your services while your business’ efficiency can also be optimized, so a chartered accountant must be hired.

Searching The Market Always Helps:

Before buying any property you must survey the market and use the services of your brokers to get hold of the best property. You can have a look at specialist investment property suppliers, as most of the times the best property is to be found there. Your success will depend on the fact that you draw up a property investment plan, and formulate a strategy as to which property to purchase for buy to let and which to sell on profit and so on.

Knowledge Is Power:

Sir Francis Bacon rightly said that “Knowledge is Power”, and the same goes in the world of property. In order to keep up with most recent events and catch the best deals, you must be proactive. You can enter property associations and clubs, attend trade shows and interact with useful experts to learn what is going on in the current property market. Apart from accumulating priceless knowledge you will also be creating social contacts which will ultimately help you in your property business success.

Do You Plan To Flip ’em?

If you are only interested in flipping property or in other words indulge in purchase and sale of property, then you must get a plan together. You will be required to compile a comprehensive and in-detail list of buyers and sellers, so that whenever you want to sell a property at a good price, you have at least a few buyers ready to make the purchase.

If you happen to accomplish this successfully, then your rate of flipping properties will be quite fast, enabling you to get high profits in no time.

By following these simple tips, you can give a great start to your career in the property market. Whatever strategy you follow, it is always recommended that you consult with the experts and take guidance from those who have done it before. Starting your adventure with low-priced or smaller property will be the way to go, as you will make mistakes on that way, but ensuring that these mistakes do not cost too much, will be the key.

  • Share/Save/Bookmark

Profitable Property Investment - Calling the Shots When Choosing a Property

July 6, 2009

When investing in the property market, making the right choice can have a great effect on your financial future, but taking such a vital decision can never be easy, especially for those who are still new in the world of property. Therefore, it is important that you should be able to distinguish between a highly rewarding investment and a money-thirsty vampire property that keeps sucking your funds.

Remain Informed About Property Booms and Busts:

It can be safely concluded that predicting the future property trends with 100% certainty is next to impossible, but you can still make efforts to learn about the current state of the market. You would be better off if you knew whether the market is going through a slump or if it is booming.

The principle of “Buy Low and Sell High” is also quite applicable in the property business. During a slump, prices of property are falling rapidly due to low demand and home owners are desperately looking to dispose off their property with minimum loss. This is a time for a visionary investor who has long-term plans. You can buy good property at very low price, and in the coming years, you will certainly reap the benefits of this investment.

People also get lured into buying property when the property market is going through a boom, but this is not always the best time to buy. By doing so, not only do you end up paying more than what the property is worth, but you also have to bear very steep mortgage rates.

Survey The Market And Analyze the Prices:

If you happen to have a chat with any pro property expert, he will always recommend that you should conduct a thorough survey in the market before buying any property. Such a survey can take time, but comparing prices from different sellers will be well worth the trouble. After analyzing all the options you can get your hands on the dream property which can bring great cash flows.

Whenever you want to confirm if the property of your choice is worth the price being asked for, the simple solution is to take a look at the prices of similar property in the close neighborhood. Any inconsistencies will get exposed, and you will have the assurance and confidence while buying the property that your money is being spent on a profitable property.

Whether you are searching for good property in the offline market or in the online property market, comparing prices is important. But this price comparison can only be fruitful if you compare the right properties that have similar characteristics. Prices in the property market can be quite volatile, and for this reason you would need to consider comparison of the most recent prices of properties against the property you are looking to buy.

Hire Professional Services To Stay Safe:

Before making any payment, it is best to call upon the services of a professional property surveyor to scrutinize your purchase. Such an expert can help you detect some latent or hidden defects in the property like any major construction defects and any other form of damage that may make the investment risky.

They will also help you draw up an estimate of the expenses that may be required to turn any property that requires work into a property that is ready for rent. The point needs special attention on your part, as research has revealed that most property owners have paid the price by overlooking the potential repair cost.

  • Share/Save/Bookmark