Here is iMoveEstates property developers London guide to successfully selling your property online and how using one of the best online estate agents can help
Most people look to sell their house when either looking to upgrade, buy a family home or downsize when the family have flown the nest. During this period it is not important or at least it is not at the forefront of your mind at this time on how much money you would make on your property but more so that it fits within your requirements. Requirements such as; does it have adequate bedrooms and/or bathrooms, storage or garages, close proximity to schools or amenities. Furthermore are these requirements within budget?
hen considering the cycle of purchasing a property it is said that a homeowner is likely to go through this on average two – three times in their lives so is unlikely to be in touch with the current market condition and legal requirements as in most cases it may have been sometime since last selling or purchasing a property. Therefore, it is very important at the time when you are looking to sell or purchase that you look for guidance from your local or online estate agent.
What if you are a property developer? More than likely your average of purchasing and selling properties will increase meaning you will have much more experience in the buying and selling cycle. You are also more likely to be up to date on the current legal requirements and regulations on how to buy or sell a property. Therefore may need less guidance during the sales process. That said, while the average homeowner is purchasing the property for convenience, the developer purchases for a profit. Close relationships with local agents are often required to enable them to purchase a property for much less than market value and also having insight on land and development projects which do not come available on the mainstream market.
Over the years it has been well documented through popular television programmes that property development can be a very lucrative business when done well. Let us focus on the London property developers who for many years have made huge gains through buying and selling within a very unique and buoyant market. Amateur developers with little knowledge have become millionaires simply because of the rise in housing prices within the M25 boundary. Because of this it has attracted more first time developers than ever before which in turn increases competition within the market meaning properties that could have been profitable years ago may not now be as easily won. To add to this, a huge rise in buy-to-let investors also adds serious opposition as the buy-to-let mortgages have become more widespread and common especially with first time landlords.
To developers, especially in London, this means costs have risen dramatically; competition has risen considerably and in turn affected profit margins unless you are the super elite building substantial developments.
What can the amateur and independent London developer look for now to help them with forever narrowing profit margins? Usually a developer will automatically use the estate agent that the development was originally sourced from, therefore incurring large agency completion fees. Even if the local agent offered a discount for this, a cost of within the thousands still applies.
The best online Estate Agents can help and ease your profit margins through their low cost fees. Their services are similar to the high street agent and often offer you the same experience but with more control through the sales process. Internet estate agents are attracting the average homeowner simply because they no longer see value in the traditional form of agency and want more involvement through the process but also the lure of saving thousands once sold. As a developer’s primary goal is to maximise their profit their main aim should be to look to cut costs where they can through the process. More often than not the development goes over budget, which can be compensated for in the sale price achieved. A part which is overlooked is how the properties can be sold and the alternative solutions available which can save you thousands of pounds in fees.
Here is iMoveEstates London property developers guide to successfully selling your property online and how using one of the best online estate agents can help;
What to do…
A properties location
There are a number of factors to consider when looking into the location of a property. More often you will be drawn to an area which has already increased in value. The key is to not invest there but consider the surrounding areas which will have a domino effect as the popularity spreads.
Also consider the amenities, which become hugely important when selling the property. Proximity to transport links, parks and schools will be more important to a potential buyer than the exact location of the property.
What type of property to target?
It has often been seen that flats will provide a greater return than houses. Also, consider the flexibility the property offers. Does it have more than one bathroom?
The waiting game
Never rush into a purchase without considering all factors, research with local experts before committing and aim for investing long term.
Use your knowledge
When looking to invest begin by considering local areas where you are most knowledgeable, either those you now reside in or those you know through connections. Your friends and families knowledge could be a gateway into finding an up and coming area. All the crucial information will then be readily available.
When researching, you will often find areas which have increased in value more than others will be linked to improvements in transport networks.
In London it is important to note that if a commuter has more than one option of travel such as train, tube and bus positioned locally it will be more attractive to potential buyers.
Profit is made on the purchase
It is imperative to secure an investment at the right price. Every penny spent over budget is a penny less in profit and could be detrimental to your bottom line. Remember every penny you pay under is effectively increasing your potential to make profit.
Consider your purchasing situation, a cash buyer who can move quickly might be more attractive to the seller and in turn enable you to negotiate a cheaper purchase price.
A property at auction is placed there by a keen seller. It is a clear statement that the seller wishes to sell and therefore can often result in a cheaper purchase price.
It is important to remember these keys points when going to auction. Be clear to set a limit to your purchase price and do not get tempted to stray above it. Hold off on bidding until the auction is well underway and note that if you are one of the last bidders you are more likely to be successful.
If the property does not sell at auction, be sure to try and make contact with the seller.
Research, research, research
It cannot be stressed enough the importance of researching when it comes to making an investment. Property developing when done successfully can be very rewarding but on the other hand it could result in you paying off debts or losing all money invested.
These risks can be reduced by careful and thorough research. Investigate the local market and property prices, additional costs and fees such as stamp duty and refurbishment. Be sure to also consider the re-sale value as this will determine the profit to be made.
Who will you be selling to?
It is important when you are planning your development to think about the type of buyer you will be targeting. Tailor the finishing’s and décor to the target buyer. Consider that someone looking for their home will expect a higher standard, therefore incurring more costs, where someone looking for a buy-to-let property will more likely consider a new refurbishment to a good standard.
Consider getting out of your house and looking for derelict or tired looking properties. Do not be afraid to approach the homeowner or council to enquire on the possibility of purchasing the property. It is important to note that there are derelict properties out there being developed through this process and can be very lucrative if purchased directly.
Property development is serious business
Property developing is not something to be taken light-heartedly and cannot be compared to baking a cake. Believe me, in developing there are far worse results if the ingredients are not followed correctly than a poorly made cake, poor decisions can lead to serious debts.
A rise in a property’s value, simply because of market conditions, does not mean you are a property developer. Property Developers have an ability to increase their properties price through creative additions ( especially in London) and seeing opportunities within the market.
What not to do…
Buying property in the wrong location has a detrimental effect on your investment. Some of the worst mistakes amateur developers make is purchasing property where there are limited transport links and in undesirable areas simply because they are attracted by the low guide price. There is a reason why properties in these areas are cheaper, it is important you find out why that is.
Fees and rates
This sounds obvious but it is important to note not to go beyond your means. Consider your limitations on how much you need to borrow even though it seems you can make it back once your project is sold. Consider the cost of renovation and if it is outside of your budget look to gain a partner or an alternative investment project which may in turn have lower returns but safer when considering the risks involved.
It is imperative that you find trustable tradespeople for your build as their costs can be the difference between your development being profitable or causing debt. Try and source independent testimonials and evidence of previous work, all good tradespeople will be willing to provide these.
Fixed contracts are advisable to prevent escalating costs.
It is important to keep a high quality standard throughout the development. Kitchens and bathrooms are what are seen to be deal breakers when a property is newly refurbished or developed. Cheaper imitations will not be cost effective in the long run and are often seen and questioned by knowledgeable potential buyers.
If your budget does not stretch to develop the entire property to a good to high standard it is important to focus on the main rooms that count and ensuring they are delivered to the standard required. Not forgetting the importance of a first impression, so the outside of your property is just as important as the interior as it is the first thing a potential buyer will judge.
Do not get carried away
Whilst it is important to keep finishing’s to a high standard you do not want to get carried away and spend beyond your budget. It may mean you will have to sit on your property for a while to achieve a profit or return you were looking for.
Aim for neutral colours, nothing too elaborate, just good long-lasting fixtures and fittings.
Adding a personal touch
Try not to add too much of your own personal likes into a property. Remember you are looking to sell the development to as wide an audience as possible. Neutral colours will enable an open mind to envisage living or fitting their furniture within the property.
Too many bedrooms
Often amateur developers make the mistake in adding too many bedrooms sacrificing good standard living space.
It is important to note that simply adding an extra bedroom does not mean the property will increase in value. More often you will struggle to sell as families’ greatly value living space.
It is a fine balance between adequate living space and what is profitable.
Do not fall into some amateur developers bad practices. Often works commence without the correct planning placing jeopardy on the sale of the property. Unrealistic work schedules result in additional costs or long delays, subsequently affecting the profit line.
Being too greedy
Being too greedy on your asking price often results in no viewings and longer sales process where you find yourself having to reduce your asking price which in turn can give an impression of something being wrong with the property.
Just because you have invested a lot into the property does not mean it is worth what you think. Property prices are determined by demand and supply, where your local or online agent can help provide you with an accurate valuation. Try to obtain at least two – three independent valuations to enable you to come up with a fair price. If one agent is much higher than the others note it is not that your property is better than others on the market, it is more likely that they are trying to win your business.
Remember your property will always find its true price on the market; it is just a matter of time.
No matter the pressures surrounding selling your development, timing is the key. Try to aim for it to reach the market at the effective times of the year. Avoid Christmas and summer holidays as buyers will be focussing on other priorities and naturally the market is quiet.
To the more experienced developer, who has learned through past experiences, will agree that the above guidelines are valuable when successfully developing property.
Once you are at the completion stages of your development and are looking for a buyer you then turn to a property agent. More so the common practice is to use the high street estate agent, but there are more cost effective ways in selling your property.
Online agents, such as iMoveEstates, will enable London property developers to save thousands of pounds during the sales process. Their one-off advertising fee starts from £249.00 which will enable your property to reach the millions of viewers to the mainstream property portals that your high street agent would also advertise on. Depending on the amount of properties you have to sell, selling through an online estate agency can be a sure way of drastically increasing your profits.
Online estate agents enable you to have more control through the sales process, whilst having the security of experienced property experts for a fraction of the cost.
Now that there are alternative solutions that can help developers of all levels, it is time to factor them in when you are looking at your project costs. Selling your property online in today’s market is one of the most effective ways in reducing additional fees, such as estate agent commissions, that no longer need to be charged. Start taking advantage today and get in contact with a member of the iMoveEstates team.
iMoveEstates LTD CEO