How Exchange with Delayed Completion Can Make Vendors Sell to You
Getting Vendors to Sell Their House to You – Exchange with Delayed Completion
There are some basic things that we always do, that always work says David Lawrenson of www.LettingFocus.com.
We always look at how we can solve a house seller’s problem. And this involves trying to put oneself in their shoes.
One of the simplest ways involves buying a house with a much delayed completion date.
As landlords, this is very easy for us to do, especially because usually these days, when we are buying, we tend to be paying cash and are not dependent on a mortgage. (Lenders limit mortgage offers to 3 or 6 months generally, so exchanging contracts with long-delayed completion dates does not work).
Generally, the preferred property for us is a two bedroom freehold house with two downstairs reception rooms, ideally with an entrance hallway, so all rooms are self-contained. (This is the type of property that we think has the widest appeal in terms of tenant types when we come to let it – it will appeal to single people or couples, or a family with one child or two small kids).
The owners of the two bed houses we are buying are often moving “up the ladder” and buying a larger house.
But, here’s the issue: It is hard for them to get vendors interested in them, until they have sold their own place, especially given the frequency of collapse of property chains.
By offering to move quickly to get to exchange of contracts stage (i.e. to fully legally commit to buying their house), we can now place THEM in the actual position of NOT BEING IN A CHAIN – which will be music to the ears of anyone they are buying from, putting them in a much stronger negotiating position.
We can move really fast to actually exchange contracts – often in a couple of weeks, if required, because we don’t have to mess about waiting for approval from a mortgage lender. And the delayed completion element in our offer means that the people we are buying from will not feel under too much pressure either. So, they can stay on in their own house for a few months after exchange, safe in the knowledge they have some time and also are in a much stronger position in their own property search.
Normally, our flexibility (to offer a fast exchange and a delayed completion date) will mean that the vendor will readily listen to any discounted offers we make.
So we get to buy their property cheaper (negating the extra SDLT we must pay as landlords) and they are in turn placed a stronger position too, to negotiate on their next buy.
The completion date could be months later than exchange of contracts date, if required. And we can be flexible about extending it further (within reason) if the folks we are buying from have still not secured their next move.
So we are all winners!
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We advise a range of organisations too to help them develop and improve their services and products for private landlords. David Lawrenson, founder of LettingFocus, also writes for property portals, speaks at property events and is regularly quoted by the media.
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