Property Development

One of the first steps toward profitable property development would be to investigate the area where you would like to purchase real estate. You should also take into consideration the intended market and type of property in which you would like to invest.

Investigate the Market

Begin by meeting with several local estate agents and gain some of their expertise. The following are some important elements to consider when looking for information on the area where you would like to purchase your property:

Take into account the social demographics. With the divorce rate at an all-time high, and a maturing populace, there is an increasing amount of single people looking for an investment.

Think about the supply and demand elements. The UK planning system has been unsuccessful in reaching the number of homes that people are demanding. This is the primary reason that housing in the UK has seen dramatic increases. The low unemployment rate and low interest rates have exasperated this fad.

Get a handle on the local economy. Do your homework and dig up the totals from your local authority planning department for the numbers on new houses constructed as a percentage of the stock already in existence. A good indication of a progressive area is growth in business districts.

Don’t go off the path. Stay within the areas that you are familiar with and investigate them thoroughly.

Have a goal in mind. Does your plan fit in with the market? Does it go with the area that you have picked, and the ways the people choose to live in that local?

Take a look at what your clientele desires. Wealthy couples and young professionals without children seem to prefer chic apartment city life. Look at the current trends and take into consideration the type of living arrangements that will keep its value because of the quality and neighbourhood. Families need fortuitous locations, where the schools and transportation are first-class, the environment is safe, and there is plenty of parking. They also need additional room both inside and out, low living expenses and a creative design.

Selecting a Property

The basic principal of property development is to purchase low and sell high. Choose real estate that can be bought and then sold for a profit. Buy well and know your risk limit. Before you purchase a property, analyse the many ways of reaching your goal of gaining a sizable profit:

Little improvements. A basic cosmetic restoration can increase the value of a property without the added expenses of involving architects and planners.

Transforming the Property

Turning a house into a row of apartments involves intricate financing and budgeting. If you’re thinking about using your own money to fund this project, remember that a major developer would refrain from using this method. There’s often a large gully between the financial worth of a home and what it might bring in once it’s been converted into flats. There are also a lot of costs and hazards in relation to this. It may be more advantageous to convert the apartments back into single housing. Planning consent will be necessary no matter what you decide to do.

Change of use. The alteration of a property from a business into a home is a complicated undertaking. When turning a pub into apartments, the biggest obstacle would be to purchase the property without first obtaining a planning consent for a change of use.

Do your research and never purchase the property on the assumption that you will obtain the change of use. It also helps to discuss these issues with the planning officers. Most of these deals are finalised when planning authorization has been granted.

Tip: Leave this transaction to the professionals if a vendor is only interested in selling on an unconditional basis, and where you pay full price no matter if the consent is in place.

The Practicalities

When it comes to conversion, make sure you are knowledgeable in regards to the building standards and architectural potential of an investment. You’ll most likely need a professional team to assist you with the following:

  • A quantity surveyor to determine expenses
  • An architect to create the layout, obtain the planning consent and manage
  • An engineer to secure a safe and structurally sound resolution
  • An estate agent to assist you in the sale of the finished product

<h2>Final Word</h2>

We hope you find this useful and when you come to sell your property why not save yourself thousands in estate agent fees by letting us sell it for you.

Property Negotiation

The first thing that occurs after you find a house you want to buy is that you make an offer to the seller. This may seem self explanatory, but in fact the offer making process is something of an art. A buyer needs skill in negotiating in order to get the best deal on the house in question. Someone who understands this negotiation process will have a final price in mind that is less than the seller’s listed price and start his offer out even lower, gradually working up toward this decreased price.

Estate agents have a vested interest in getting the highest price for a house because they often work on commission. The estate agent looks at the prices of other similar houses in the area and uses this as a guide. The estate agent receives a percentage of the sale price for successfully negotiating a sale of the house. This is something that it is important for a home buyer to bear in mind because they need to be wary of an estate agent’s valuations and sales attempts.

The following are some basic rules and guidelines buyers should follow to work out a good deal on the purchase of real estate:

1. Research the Property Market

It is very important to research the property market to look for current trends in pricing on the local and national scale. There is constant change in this market due to local and even global factors. Those in the market to buy a house need to be fully apprised of these fluctuations in the market and the factors that cause them. In a ‘buyer’s market’ for instance, the market – purchase of houses – has slowed down and so sellers are willing to take less for their houses. In these types of conditions buyers can often successfully make fairly low offers. Buyers can access the land registry for the area in question to see what similar houses have sold for and use this as a valuation guide. This can be used as a reference when planning an offering price and during negotiations.

2. Initiate Negotiations

A good rule of thumb when negotiations with the seller begin is to avoid stating a price before thoroughly finding out what is included in the purchase of the real estate. Make sure to have the seller enumerate all of the items that will be included in the sale of the property. It is also a good idea to find out the specific reason the seller wants to sell. What are known as “motivated sellers” are those in some kind of financial difficulty who may be willing to sell for a lower price than would otherwise be the case. Knowing the reason for the sale can also help you to tailor make your offer to the seller and to distinguish yourself from competing buyers.

3. The Bargaining Phase

As the bargaining phase progresses, try to arrive at the price you have initially decided on as your highest offer for the house. Describe to the seller your reasons for arriving at this price. The more evidence and sound reasoning you provide for the price you are offering, the more convinced the seller may be that you are genuine and that the house or property is really worth what you are offering. Hiring a surveyor to assess the conditions of the property is a good idea and can help give credibility to your price offer. Always bear in mind the motivation of the estate agent to secure a commission when you are negotiating.

4. Closing

Once a price has been arrived at, have a solicitor draw up a contract stating the price. When the buyer signs this contract, the deal will be complete and the buyer will receive ownership. The buyer and seller should make sure all the different aspects of the purchase have been thoroughly taken care of before closing.

Getting familiar with these basic steps and doing further research on what is involved in each of them will help a clients become good, even professional level, negotiators and closers. Those that are considered experts in the field often recommend actually practicing these steps to insure buyer confidence in timing and delivery. The better informed a buyer is, the better their chance of negotiating a deal that matches their initial offer price. Getting a good familiarity with these fundamentals of the art of property negotiation will help insure that a buyer’s dreams of owning a house come true.

Guide to Estate Agent Contracts

Types of Estate Agent Contracts

There are three main types of estate contracts in the UK property market. These are the sole agent agreement, the sole seller agreement and the multi agent agreement.

Sole Agent Agreement

The sole agent agreement is the most common type of estate agent contact. A sole agent contract is used when you have an agreement to sell or rent your property with just one estate agent. So what does a sole agency agreement mean and how does it differ from the other two types of agreement.

A sole agent agreement means that you will only pay your estate agent the agreed rate of commission if your estate agent successfully introduces your buyer or tenant to you.

However, if you independently find a buyer or tenant then you do not pay your estate agent any commission. Therefore if you were to advertise in tandem with Private House Sales and your estate agent you would have to pay your estate agent any commission if your buyer or tenant contacted you through Private House Sales.

Sole Seller Agreement

Sole seller agreements are not commonly used amongst estate agents now and have been widely condemned by the Office of Fair Trading.

Like a sole agency contract a sole seller contract is an agreement between the seller or landlord and one estate agent. However, the main difference is that if you independently find a buyer or tenant for your property that has not been introduced to you from your estate agent you will still be liable to pay your estate agent commission. To put this into perspective, if a friend at work is looking for a flat to rent or to buy and they offer to buy or rent your flat, regardless of the fact that your estate agent has played no part in the sale or letting you are still legal bound to pay them the agreed rate of commission.

Sole agency contracts are not recommended and will question the integrity of the estate agent itself. If you chose to advertise with Private House Sales and an estate agent with a sole agent contract then you will not save estate agent commission fees as you will still have to pay them.

Multiple Agent Agreement

A multiple agent agreement is when you choose to advertise your property with two or more estate agents. In almost all cases the rate of commission will be higher than if you choose to sell or let with just one estate agent. The reason for this is that only one of the multiple agents are guaranteed to get receive any commission.

A multiple agency contract should not prevent you from finding a buyer or seller independently with Private House Sales. Generally multiple agency contracts are only used when someone is looking for a very quick sale or rental.

Landlord Tenancy Agreements

What is a tenancy agreement?

A tenancy agreement is a contract between the landlord and the tenant. It may be written or verbal. The tenancy agreement gives rights to both the landlord and the tenant, for example, the tenant’s right to occupy the accommodation and the landlord’s right to collect rent for letting the accommodation.

As a landlord you may specify arrangements about the tenancy, and these will be part of the tenancy agreement as long as they do not conflict with law. Both the landlord and tenant have rights and responsibilities given by law. The tenancy agreement gives the landlord and the tenant more than statutory rights. If a term in the tenancy agreement gives either the landlord or the tenant less than statutory rights, the term cannot be enforced.

A tenancy agreement is made up of:-

Express Terms

The express terms of a tenancy agreement are those that have been written out in a document or discussed in a verbal agreement. Most written tenancy agreements include terms such as:

  • The type of tenancy
  • The name and address of the landlord and all tenants
  • The address of the property being rented
  • The start and end date of the tenancy
  • The amount of rent to be paid per week or month
  • The date and manner in which rent will be paid each week or month
  • Whether rent includes “extras” such as utilities and/or council tax, or if they will be paid separately by the tenant
  • The manner, and time, in which the landlord must be notified before the tenant leaves the property
  • That the landlord will give a minimum of 24 hours notice prior to inspecting the property

Implied Terms of a Tenancy Agreement

The implied terms of a tenancy agreement are those that may not always be detailed in a written tenancy agreement or discussed in a verbal agreement, but nonetheless are in effect due to the law or by “custom and practice” (meaning that these terms have become common and accepted practice). Common implied terms include:

  • That the landlord will undertake basic repairs to the accommodation as required
  • That the landlord will keep appliances for utilities (such as heaters, boilers, etc.) in working order
  • That the tenant will take care of the premises and property during their tenancy and keep it in satisfactory condition

5 Tips to Value Your Home

Many homeowners are intimidated by the notion of assessing the value of their home, but it is not nearly as complex as many realtors might make you believe. Any homeowner can evaluate the value of their home simply by following these five simple tips.

1) Compare Your Home with Similar Homes in Your Area

There are two groupings that homes will fall into:

  • Recently sold homes whose purchase price is easily accessible via the land registry
  • Homes that are still available for sale within the same price bracket as yours, attracting interest from your potential buyers

As you peruse these homes, look for one that is most reminiscent of your own property.

Finding a similar property on your own street will allow you to get a good grasp on what your property might be worth. If you can find a property that is much like your own and has been already sold, this can give you the best approximation of the price that your own home might be able to get. However, the real estate market is volatile; properties that are priced significantly lower or higher than those that were sold six months ago can be an indication of the way that the market is moving.

2) Apply Adjustment Figures

If you can’t find any properties that are similar to your home in your particular area, you will need to use adjustment figures to ensure that the price on your home is commensurate with other homes on the market. You can examine the cost recovery, or how much the property value has increased as percentage of the cash the homeowners put forth to improve their home, of the homes against which you are comparing your own property. There are a few improvements that will gain back one hundred percent of the money put forth into the improvements, and they are as follows:

  • A spare bedroom that replicates the style of the existing home
  • Opening up the kitchen to make the space an open kitchen diner

These improvements will get back fifty percent of the cash put into them:

  • Updating the kitchen with more modern appliances and cabinets
  • Converting the loft
  • Extending the roof over the ground floor

This improvement will return twenty-five percent of the homeowner’s investment:

  • Landscaping the garden

A homeowner must also be wary of improvements; sometimes, they can actually decrease the property’s value. An improvement that is unattractive or poorly crafted will reduce the property value of your home, and even something seemingly practical as double glazing could hurt the potential value of a period home.

3) Location Location Location

The location of your home is important when you are determining the value of your home. Houses in quiet residential areas are generally valued at a higher rate than those located on busy commercial streets. There are a couple of factors to consider as you evaluate your location:

Is your house close to public transportation? City commuters will pay more money for a home that is close to their commuter train line, shaving time off their commute, than a home that is further away.

How are the schools in your area? As parents require more from their children’s education, a home that is located in an excellent school system is bound to be more highly valued than a home that is outside of the school system, even if the latter home has better features.

4) Avoid Comparing Your Home to New Developments

People are willing to pay a premium for a home that no one has ever lived in before; you cannot compare your pre existing home to these properties.

5) Be Prepared to Defend the Price of Your Property

Some buyers might question your valuation of your home, so you should be prepared to provide evidence for your decision. Be sure that your argument is legitimate with plenty of valid information.