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Buying in the run up to Christmas – opportunity or trap?

I had surgery on my shoulder last week so I am typing this one handed with my left rather than right hand, so apologies for any mistakes.

And don’t worry, it was nothing serious. I put my shoulder out playing football last year and it hadn’t recovered. As my surgeon gleefully pointed out when he visited me before the operation, I am far too old to be running around a football pitch.

He scores zero points for bedside manner!

Oops, sorry, my ever-vigilant assistant, Veronika, is telling me to focus and not bore on about my arm. So, what about London property? Well, the run up to Christmas is often a great time to buy.

Why?

Because some sellers become far more flexible on price. Quite simply they want to have exchanged contracts or at least agreed a price before the end of the year. This is completely illogical (unless there is a tax motivation), but either way it works in your favour as a buyer.

The fact that fear is the dominant emotion in the market right now also works in your favour and shrewd operators are taking action as noted by Bloomberg:

Billionaire American Families Seek Profit From Brexit Chaos

Basically, a firm run by two families, the Stephens and the Van Tuyls — is looking to invest heavily in the London property market: "Brexit in its current status causes uncertainty," said Peter Mather, one of the FirethornTrust's founding partners. "The uncertainty causes volatility, and the volatility causes opportunity."

This is only one example of what is currently happening but several other wealthy families and trusts are also taking advantage of the old adage “Be greedy when others are fearful”.

So, if you are contemplating acquiring a property, you should start actively looking now rather than waiting until the New Year. HOWEVER, …

… you must be selective. I was recently speaking to a gentleman who was proudly telling me about the massive discount he had negotiated on a property in central London and how it was a bargain. And on the face of it the discount he negotiated was big compared to the asking price, but there were two problems (I didn’t say this to him by the way):

  1. A discount is only really a discount if it less than fair value. Most asking prices have little resemblance to fair value (as in this case)
  2. Focussing on the discount rather than the future performance of the property is one of the biggest mistakes property buyers make.

In this instance, he had bought a property that by its very nature was guaranteed to underperform the market in both weak and strong markets – the exact reason the seller was happy to be rid of it. In other words, this property did not adhere to the “Best in Breed” strategy.

Here are some basic figures to show you the importance of buying a property that will outperform:

If you bought a property for £1m this is what would happen:

 0 Years 5 years 10 years 20 years
5% per annum £1m £1,283,358 £1,647,009 £2,712.640
8% per annum £1m £1,489,845 £2,219,640 £4,926,802
10% per annum £1m £1,645,308 £2,707,041 £7,328,073

 

As you can see, over the long term the difference of just a couple of percentage points outperformance can be huge due to the power of compounding.

And this is the trap too many buyers fall into. They see a “bargain” but only consider the base numbers, because they have been told that the run up to Christmas is a good time to buy. So, it is essential that you undertake your due diligence – not only by scouring the market to find the best opportunities, but also to understand what makes a best in breed property and what represents fair value.

If you don’t find a suitable property then just wait until you do, even if that means waiting until 2019.

(If you are buying a home, you will probably be focussed on finding a property where you and the family will have lots of space to grow into, where you will feel safe and have fun while also having easy access to great shops, schools, restaurants, etc. I am not suggesting that you sacrifice this, far from it, but most homebuyers fail to see the full range of properties available and miss the one that would fulfil their requirements and will outperform).

One final note – due diligence does not mean looking at websites or waiting for property alerts. You need to source off-market properties too. Now, you won’t be able to recreate the network that I have which allows our members to have first refusal on the finest properties in London, but you can still give yourself an advantage over most other buyers by simply speaking to the estate agents once a week.

Because the estate agents often don’t list all their properties as the agency, Jackson Stops, highlighted in an email they sent out two weeks ago:

“You might be interested to hear that c.20% of our sales this year haven’t made it to the open market”.

Quite frankly, relying on the websites virtually guarantees average results (although you should be just about ok if buying properties under £1m as long as you fully understand valuations and are a good negotiator).

You can discover more about this in my book, The Insider’s Guide To Acquiring Luxury Property in London. If you haven’t requested a copy you can do so by leaving your details on the form to the right-hand side of this page or emailing [email protected] or calling 02034578855 (+442034578855 from outside the UK).

Good luck with your search for a property in London.

Best regards,

Jeremy

 

Request your FREE Copy of the Book

 
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In the book and set of 6 CD’s you will discover:

THE MOST EFFECTIVE WAYS TO FIND "OFF MARKET" PROPERTIES

See the properties that most buyers will never even know exist.

HOW TO HAVE YOUR OFFER ACCEPTED EVEN IF IT IS NOT THE HIGHEST OFFER

Get this right and your chances of making an ideal acquisition rise immeasurably. Counter-intuitively this has little to do with the actual negotiation itself.

HOW TO ENSURE YOU GAIN ACCESS TO THE FINEST PROPERTIES ON THE ESTATE AGENTS’ BOOKS FIRST

Most buyers waste time viewing wildly unsuitable properties and never find their ideal home. Put this technique to use and ensure you see nothing but the best.

WHY RELYING ON THE INTERNET SERIOUSLY AFFECTS YOUR CHANCES OF EVER FINDING THE IDEAL HOME BY MAKING YOUR PROPERTY SEARCH EVEN MORE DIFFICULT THAN IT ALREADY IS

Most prospective buyers turn to the internet to find a property and are disappointed as a result. This book shows you why and what to do.

WHY THE ASKING PRICE OF THE PROPERTY AND THE ACTUAL VALUE CAN BE WORLDS APART, AND HOW YOU CAN ENSURE YOU DON'T OVERPAY OR MISS THE OPPORTUNITY TO ACQUIRE A HOME AT A BARGAIN PRICE

This strategy alone can save you hundreds of thousands — even millions — of pounds on your property acquisition

20+ NEGOTIATION TECHNIQUES TO HELP YOU ACQUIRE YOUR HOME ON THE BEST TERMS POSSIBLE

These are strategies I use in every negotiation to achieve prices my clients would not have thought possible (this may seem too good to be true. However, if you would like to speak to past clients who will confirm this, please contact me. While many of my clients value their anonymity some have kindly agreed to speak to you if you wish).

THE TEN QUESTIONS YOU ABSOLUTELY MUST ASK THE ESTATE AGENT OR SELLER

Information is power in negotiations. These questions are your foundation for negotiating the best price possible

AND MORE...

and many more tips and proven tactics to ensure you successfully purchase your ideal home or investment while avoiding the normal stress, frustrations and unnecessary expense endured by the average buyer.

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Who am I and why should you listen to me?


Jeremy McGivern

My name is Jeremy McGivern. I am the founder of Mercury Homesearch, the internationally renowned property search consultancy, and author of The Insider’s Guide To Acquiring Luxury Property in Prime Central London. I have been acquiring property in prime central London for clients for over 13 years.

Having physically viewed over 22,000 properties in prime central London, studied the details of over 153,400 apartments, houses and investment opportunities and spoken to 232+ estate agents every week for over a decade, my advice is in high demand and has featured everywhere from Bloomberg Television, The Financial Times and The Daily Telegraph to Forbes India and Bahrain Confidential.

Please note that the strategies and techniques revealed in the book and CD’s are not just theory. They have been tested and proven over 13 years of acquiring hundreds of millions of pounds worth of prime London

property for my clients, who include some of the world’s wealthiest families and most successful entrepreneurs and business people - it may surprise you but over 30% of our clients are British and based in London so this information is relevant whether you have bought a property in London before or not.

Acquiring a prime central London home is a minefield for the uninformed. Make sure you put knowledge on your side by reserving your free copy of The Insider’s Guide To Acquiring Luxury Property in Prime Central London and set of 6 CD’s. Simply leave your details above and I will have them sent to you immediately.

Good luck finding your ideal home in London.

 

Best regards,

jeremy-signature
Jeremy McGivern

P.S. If you are serious about acquiring a home or investment in London the simple steps in the book and CD’s is guaranteed to save you time, money and stress. Simply request your copy of the book by leaving your details in the form above.