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Today's Estate Agent Services....
Introduction - the process of buying a Property For Sale
to let versus buying a property for your own residential use is very similar in
process (however one is a cold objective business decision, the other an
emotional decision). The first step is to check sources of information for
properties for sale (estate agents, auctions, private sales, buying off plan
from a developer and lastly internet portals). The next step is to Analyse Local
Areas - choose an area that is heavily desired by your target letting market.
The main factors to consider are transport links, shops, schools, leisure
facilities, noise pollution, environmental factors and demographics. Now you are
happy with the area, your goal must be to find a suitable Property for Sale that
will be attractive to your target tenant and be saleable in the future.
Legal Help - You must
employ a solicitor who will protect your legal interests, as well as communicate
with the seller�s solicitors. Solicitor�s charges relate to the preparation of
contracts, local authority searches, payment of stamp duty and land registry
charges. You may save 1% of your stamp duty charge simply by knowing about and
understanding stamp duty exemption in �disadvantaged� areas. Next you must make an offer for the property
advertised for sale. When submitting the
offer make sure you confirm it in writing, �subject to contract� and completion
of satisfactory surveys (these words are critical in law) in not committing you
to a legally binding contract!.
Negotiating Tactics - You should compare the asking price with similar
properties in the neighbourhood - has the seller had the Property For Sale
professionally valued-. It�s tricky in today�s �sellers market� to judge how far
down you should come when Negotiating, in making an offer below the asking price
where other bidders are in the running. Sometimes, a seller may actually accept
a cash buyers lower offer, (on condition of a quick sale), as opposed to a
higher offer from a buyer who will be caught in a chain. Ask the seller/ agent;
why they are selling- How long has the Property for Sale been on the market
(signals over valuation); Are they are keen to move quickly- if you find major
Potential Problem From The Survey, you can still negotiate (and reduce your
offer price). If the seller refuses to negotiate on price, try and Negotiate On
Furniture And Fittings. Your strongest negotiating points when making an offer
as a buy to let investor are; that you are a cash buyer (as opposed to a buyer
who must sell their own Uk property) and have your mortgage approved in principal
(reducing delay and stress for the seller) � fax a copy of the mortgage offer to
the estate agent.
Searches - Once your offer has been accepted, the vendor's
(seller) solicitor will prepare the draft contract to be posted to your
solicitor; this will detail the conditions of sale. Your solicitor will then
request searches from the H.M Land Registry office. This details the ownership
titles of all freehold land in the UK. In addition, your solicitor will
undertake local searches checking risks. You may elect to compliment these
searches with your own �peace of mind� DIY search. In parallel to these
activities, your lender will Instruct a valuation - to be reassured the value of
the Property For Sale is worth the re-building costs. Beware; this does not give
you any information about the structural situation of the Property For Sale. For
that you must instruct a Qualified RICS surveyor.
Exchange & Completion - When your solicitor and the sellers solicitor are
both happy that; the contract is correct, funds are available, you have arranged
life assurance, the completion date has been agreed by you and the seller; then
final contracts are exchanged confirming your commitment to pay for the Property
For Sale in full and the seller�s commitment to sell the Property For Sale to
you within a pre-agreed timescale. Your solicitor will transfer to the seller�s
solicitor Your Deposit (typically 5% to 10% of the agreed price). The contract
will have an agreed completion date to transfer the balance of the monies.
Matching Property with Tenant Market - clearly, before you buy your Uk property you must
base your decision on the type of Property For Sale that fits your targeted
tenants needs and requirements. Never buy a Property For Sale just because you
like it! Your personal taste is irrelevant. You should think about tenants
typical needs in terms of Uk property type, location, the property and access to transport
links, shops and schools. Why do they want to live in that area- You should pick
a specific type of tenant and base your property purchase decision solely around
this target market. Next, you should identify your ideal tenants as being
Students, Professionals, Families, The Corporate Tenant, Divorced or Singles, Dss/ Housing Benefit Tenants or Retired Couples.
There are many types of lets � each, which
different levels of risk and reward attached. You need to be aware of the
characteristics and legal background of each. The main types are short term
lets, rent-a-room, holidays lets, company lets, DSS/ housing benefit lets and
houses In multiple occupation (HMO).
Let to Buy Mortgages - Rather than purchasing a property for letting
purposes, one option is to consider Letting Your Own Property and moving
yourself to a new house to live. At a time of rising property prices this option
could save you time and money through achieving a Higher Yield as well as
creating finance opportunities for Intelligent Use Of Equity in relation to tax.
In addition the use of �Let-To-Buy� Mortgages may become appropriate in this
situation.
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