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How to find and secure a bargain property - Sourcing & finding cheap property

There are lots of bargains out there, we just have to get of our backsides and look.

What Is A Bargain?

The first step in finding your bargain is to decide what you think a bargain is. To me a bargain is anything that can be purchased for at least 20% below market value, the property will then have what is called "first day value". I don't consider a property to be a bargain just because a new tube station is coming to the area in 3 years time, or if a bridge is planned in 6 years. I look at today's value and what it means to me.

Of course, we all want different things out of property, some people look at short term buying and selling while others look at long term capital appreciation. In the latter instance, buying a property slightly below market value with a view to local area improvements, that make it worth more over the next few years, will possibly be more appealing.

Yet another group of people consider a bargain to be a property that needs refurbishment or building work and where the price has been reduced accordingly. Once the work is done the property will usually increase in value.

So there you have it, a bargain is what you want it to be.

Sourcing Your Bargain.

Now here are some ways to get your cheap property.

Advertise

Advertising is a sure way to get people who need to sell their property to contact you. This saves you both time and energy as you just wait for the calls to come in.

A few tips on advertising.

1. Areas - Don't advertise out of your area if you are not prepared to travel. Pick local places to advertise.

2. Papers - Think about the type of paper / magazine people who are in a desperate state to sell would buy or pick up. Is there a local free paper like Friday Ads, or a local Bargain Pages, Ad Trader or Loot? Once you have chosen your paper look though it and see what colours stand out to you, and what size suits you. If you can't decide, try a 3 cm deep by 5cm wide advert in black box with white text.

3. Boards - Put up a card in local shops, supermarkets, community centres, bulletin boards, community boards, even ask if the church will let you put a card up.

4. Online - build yourself a web page with what you do. You can then point people to it with a small advert.

5. Wording - Think about some wording that will "attract" people to call you. Do not copy what other people have put, don't ask people a question unless the answer will benefit them and don't just offer a service. Adverts that say builders require houses do not usually have a call to action. If you can't think of any wording that suits you, try "Need A Quick Sale? Call ....". Simple as that. You are appealing to someone who needs a quick sale.

6. Number - Mobile numbers always look dodgy on this type of advert. Try an 0800 number, this will attract people in debt who can't afford to call mobiles, you can get them from here for only £2 a month with no contract.

Once you have your caller, be straight with them, tell them you do not pay full price, and maybe tell them you offer a debt relief service, paying off people's mortgages.

Estate Agents

Visit all of the Agents in the area and have a face to face chat with them. Explain what your intention is, but never let on that you are new to this. It is always best to give them confidence in your abilities and speed. A little bluffing goes a long way.

Ask them questions and make comments that will make them think you do this all the time. For example :

1. So have you got any property stuck on the books, ones that aren't shifting?

2. What's the story on it?

3. Has the Seller found somewhere yet? So they really need to sell now don't they?

4. Is it vacant (yes) oh goodness, not so good to leave it vacant there.

5. So do you think they are open to offers if I move fast? I have my finance (show certificate if you have one).

6. It's not my normal buy, but at the right price I'll take a look, can you sound them out before I make the effort to view?

7. Are there any that should have had their survey done, but seem to be dragging their heels? I'm keen to jump in.

Always make sure you take a card from the person you spoke to. Make a note of anything they said, it always pays to write things down. About 3 days later, call up and speak to the person you saw and "check in" with them. Remind them what you were looking for, jump on any you talked about to get an update. Ask them if they have anything new.

A week or so later do your rounds again, try and make it the same time of day, to catch the same person that was there last time. Tell them you've got offers in on a few from down the road, but you need to move faster.

Bit by it you will build up a relationship. Within a month or so, you may be the first person they think of if they need to shift something. In the mean time, between your Agent visits, get around to some of the new developments, aim for end of month (as some work to targets) and see if they are offering discounts or incentives.

Publications

Buy your weekly local papers, usually there are about 5 papers that cross over into each area. It is good to get hold of them all, set up subscriptions to get them delivered weekly, you don't want to waste valuable bargain hunting time going out buying papers when you can have door to door service. Look through the adverts (and place your own as above).

Pick up the ad mags, like Loot, Ad Trader, Thames Free Ads, Bargain Pages, Friday Ads to name but a few. People who are selling privately like to use free ads, they like to avoid paying estate Agent commission if they can.

Some people who advertise privately will reduce their price to reflect the fact that they are not paying Agent's commission, they may have it on with an Agent as well, but would prefer to sell private. It is always a good lead in to talking them down on the price if you remind them they are not paying commission by selling direct to you.

Reading through the free ads you should call about any property, it could be a potential bargain. Often private Sellers have just estimated the price of their property. They may have looked a few streets away and checked to see what they were selling for, but may not know there area is worth more. Some have even had their property valued 6 months ago (sometimes even longer) and, therefore, they may not be aware of any significant rises in the market. Even more Sellers accept the opinion of their family and friends on the value of their property!

Often the private Seller really has no idea what they are selling, they just want to sell it, showing keenness by adding the words "Quick Sale" to their advert. Some may be cunning, they get a price from local Agents and then inflate it to out of area advertising, hoping to prey on buyers who have no knowledge of the area. For example, the Seller has a bungalow in Cornwall. They know that prices are high in London, so will advertise in Loot, declaring it to be a bargain. Due to the price difference from London to Cornwall, an unwary Londoner could pay a lot more than the property is worth. The Seller knows they are trying it on. Sometimes, if you can catch people like this out, but still show willing, they still really want to sell and may be prepared to do some real negotiating.

The private Seller is often in a world of their own, some just want to get rid of a chain around their neck and you could be just the person to rescue them.

Driving Around

Another source of bargain property is so obvious, but many of us miss it. How many boarded up properties do you see? Take a pad and pen out with you every time you go out. Any properties, if they are boarded up check them out.

A simple check with Land Registry online will show you the owner, any charges on the property and what the last price paid for it was (if it was sold within the last 4 years). This information is a valuable tool for negotiation. You may see that the owner is supposed to be living at the address that is boarded up, it is likely they are having their mail redirected.

When you are out and about, note any properties with lots of for sale boards or letting boards. Is the owner desperate? Call the Agents up, each one may have a different story, investigate, it could be the bargain you were looking for.

Look for flooding of sales. If you know an area and see a lot come on the market all in one go, check out any obvious reasons. If it is just a coincidence, you might use them all against each other to play the price down.

Local Stores & Supermarkets

Yes, believe it or not people advertise their house to sell at the supermarket. Try and vary the supermarket you go to, they usually rotate their ads on a 4 weekly basis, so get down there and read them! You may find what you are looking for right in your local!

So now we know where to look, and where to get people to look for us. Once we have got this sorted out we need to be prepared to negotiate!

Bargain Negotiation

A bargain is a property that you have negotiated to a good price that you are happy to pay. If the Seller was on the market for £50k and you talked them down to £45k then this may be enough for you. There are different ways of negotiating a price.

One important point in negotiating around faults with a property. Be diplomatic, as the property may be the Sellers current residence. They can get offended and this makes them stubborn to deal with. Sellers will often deal with a Buyer they like, even in preference to a Buyer offering a higher price.

Start Low

You may find a property for £50k, you like it but want a better price than that. You may consider a silly offer like £38k (you may be lucky and they bite your hand off) and they may come back and say they will take £45k. You might agree to come up to £40, but make that your serious offer and see their response. Chuck in a few comforters, beautiful this, pretty that, can exchange as soon as I have your papers, can complete at your convenience, as I appreciate you have to find somewhere. Just throwing in some sweeteners may secure your price.

What The Seller Needs To Achieve

You may prefer to ask the Seller straight up what they will take. This could depend on how much of a mortgage they have to pay off. Don't beat around the bush if this is the way you want to go, offer your services as debt consolidation.

Pull Out And Come Back

You may put in a fairly good offer, but pull out, then come back with a lower one saying you found something out and can only do it at the lower price now. Throw in the fast exchange and see what happens. This is a bit underhand, but if the seller has messed you about, you may not feel comfortable with paying the higher price for the amount of hassle you are about to embark on.

The Ghost Buyer

Some people team up, send in a buyer, who offer below asking price, but a few days later, after Seller has got their hopes up, the fake buyer drops out. You then view on same day and rescue them, but not quite pay what they had before, but you came in and saved the day. This is mostly performed by old school investors, and can cause the seller to be quite stressed.

Chipping

So you offered, it was accepted, but on receipt of your searches, you are not quite happy. You might show you have your mortgage offer and are ready to go, but would like to renegotiate on the basis of the "so and so" that came up. Chipping is common and perfectly acceptable if a previously unknown issue has arisen. Some people Chip as a matter of course, it comes down to your personal morals.

General Negotiation

Some of the above negotiating might not be to your taste, but remember the Seller does not have to take your price. Whatever they do is their decision. Even if you feel bad, they took your offer because either they wanted to or needed to.

You can get the Agent to negotiate for you if the Seller is using one. Some Agents are very clever at bringing you both to a price you are happy with, they might even pretend to call the opposite side and come back to you with a counter offer, thinking they know what the other party is willing to accept. Some Agents have no idea and may not even come back to you if they thought your offer was low. In which case you may feel a visit or letter to the Seller might be appropriate, after all a sale is a sale and if the Agent isn't going to do the work to sell it by negotiating you up to a level the buyer will take, why should they get paid? Estate Agents are bound, by the practices of their profession, to convey any offer to the Seller, not all Agents will do this though.

If you are worried that an agent has not or will not put your offer forward, drop the vendor a note, or copy them in on the official offer.

There are many tricks to negotiating. I go in with the ruthless approach. I make friends with the Seller, but am not shy at making silly offers. If I get turned down, there is more out there, and I don't stress over it.

I try to look at each property as if I am not really going to get the deal anyway, so if I do it's a bonus. Then if it falls through there is minimal disappointment. Missing out on one property here and there is not a life-threatening situation, there is always next week's ad mag and Friday Ads to go through. Each one I lose, I learn a bit more for the next one. Though no two are the same.

There are lots of people who need to sell out there. Maybe their circumstances are unfortunate, but you worked hard to get where you are and I'm sure people wouldn't think twice about buying off you if you were a distressed Seller.

People who could be in the distressed Seller state could have any of these reasons;

Divorce, Death, Moving Elderly Parents into Homes, Chain keeps breaking, In Debt, About to loose home they want to buy, Threat of repossession, Vacant, Bad tenants.

There are many more reasons, so we can never run out of bargains, or have missed the boat, as some people say.

I hope reading this has given you an insight on how to find and secure your bargain. It's not easy, its hard work, but once you are in the routine of looking every day you will be surprised at how many seem to fall in your lap. Good luck and happy hunting!

In the meantime if you have questions, you may get the answers you need from the community of mousers who are online regularly in the.

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