Death, Debt, Divorce… and Developers ….and Divesters.
In the current market there are very few of the sixth D – Discretionary vendors – around, mainly because these people only come to the market when they can see something they’d like to buy next, and the current shortage of stock is depressing their activity.
However, property transactions are still happening so who is selling and why?
Your local Buying Agent’s network of contacts can give the inside track on the history and motivations of the vendors, as well as contextual market information that enables you to be the preferred bidder, even if you are not the highest spender. They share here a tip or two on each of the 5 Ds active now:
Contrary to popular belief, those administering the estates of the recently deceased are unlikely to accept an offmarket or early bid, as they are under an obligation to achieve the best price possible for the beneficiaries. Your best strategy is to be flexible and understanding of the emotional turmoil if there are surviving family members, and highly efficient if you are only dealing with professional executors.
When the vendor is under pressure to sell – either debt, or other life commitments such as work relocations or school term dates, there is more of an opportunity to be accommodating to the vendors needs in return for a price discount.
The Divorcing category of vendors is more nuanced than those in dire straits. When a split is the main driver, urgency will probably be desirable, but maximising the return can be equally essential for those dividing the spoils, which can be a sticking point in the negotiating. See more here on buying from a divorcing couple. The longer the property has been for sale, the more room for negotiation -especially if you can divine where the roadblock has been to date. Some properties do not sell because of the general ‘sad air’ sometimes found in a house after a split, but sometimes there is not the desire to sell, and other times it is the cash figure required. You may see a way to get added value in exchange for hitting a certain figure if that is the case.
Changes to the tax system and the slowdown in market activity leading to an oversupply in BuyToLet properties has meant that for Developers and Landlords alike are increasingly likely vendors who will negotiate – and that can provide opportunities for investors who have a longterm plan in mind. Make sure you are fully understanding of your tax position and long-term goals before entering into discussions on property, and be decisive – and prepared to walk away if your parameters can not be met.
For more information on how Stacks Property Search can help you beat the competition to the right house at the right price, click here to learn more. If you are looking for a property investment, click here.
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