Keeping The Deal Stitched Together
22nd October 2019
Last week we finally completed on a two bedroom flat in SE2. I say finally because this deal was agreed a full nine months ago. Perhaps this number is significant, as it’s the time from conception to birth.
This was a probate deal, there were four beneficiaries for the sale of this property, hence the reason for the delay in getting the deal done. Consent had to be sought from all four, and often they would simply not respond to requests from the lawyers.
Our fascination with this location is backed by solid research and we have been buying here for our clients for some time, and will continue to do so. The delay in Crossrail is a good thing. It has kept the window open for investment even longer.
The property was an investment property, therefore, we thought it prudent to purchase with the benefit of the existing tenants. This means our client has been receiving rental income from the date of completion.
However, in order to do this properly, we had to rehash the agreement; and, this came with its own raft of problems.
The tenants refused to sign because they had not been informed of the sale, to compound this they had a list of issues in the flat which they were insisting should be resolved before signing any agreements.
When we were finally due to execute the deal, we discovered one of the beneficiaries whose signature was required went off to Ghana. Documents had to be couriered back and forth. When they were finally executed, the mortgage expired. So, the whole process had to be restarted.
All was not over yet. When the new mortgage came through, we were ready to exchange and complete simultaneously. However, the boiler blew up and this now had to be resolved as we did not want our client to inherit the issue. A retention of £1K was agreed to expedite matters.
Finally, the deal was completed last week. The property was completed at £240K and, in our opinion, is worth £275K. This deal is not driven primarily by the discount, rather by where prices will go in the next 3-5 years. We believe this will prove to be one of the strongest hotspots in London.
Our client has not actually seen the property. She is a first time passive property investor. Despite the time, hassle and money (to be fair most of the hassle fell on us in sorting the various issues out), she has agreed to go ahead with another purchase; in Camden this time, driven by the deal, though the flat is already in an extremely strong location.
This is a property we have been tracking for about a year. Originally the deal fell apart due to the revised lease not reflecting certain important points which were in the original lease. The vendor had a tussle with the previous lawyer who drew up the lease. This accounted for the delay in getting the deal in a format where we were satisfied enough to exchange.
This client works in the financial services sector, and has done so for many years. Yet, she had neglected to invest properly for her future welfare. With these potentially two acquisitions we are confident her future will be very secure.