15th September 2018
We are on the verge of closing a deal in Battersea. The property is a freehold house, which requires modernisation. The property is surprisingly small, given the quoted resale price of £1.2M. But there again, I don’t know the market on the other side of the river.
A local agent confirmed this is indeed the valid local price for a developed property. Many buyers now understandably don’t want to pay for decoration carried out to someone else’s taste. This point varies across different regions in London. In some areas, they absolutely must have the finished product in order to attract an end user.
Usually, it comes down to the type of client who will buy the property. The wealthy are generally cash rich but time poor, and have little time or patience to deal with a build project. Often, they want quick gratification.
In this location, according to the agent, the clientele would be open to taking on a project like this. A freehold house means it is free of hold, i.e. you have no freeholder to report to and take permissions from. This can be very valuable in terms of execution of a project, and can add massive amounts of expense to a project.
The local agent claims houses are in short supply, and this one should sell quickly. He recommends a resale price of £950K, which I can live with. However, often the proof is in the pudding. There are agents who are expert in talking a good game to get the instruction on, and also expert in beating the client down once they are in a long contract with them.
To be fair this agent was commercially minded, maybe he smelt that I was in the trade and therefore there was little point in going to and fro in negotiation. Straight away, he offered to resell this for a 1% commission, and no notice period. This means we can dis-instruct them instantaneously.
So, there was nothing for me to say. You cannot negotiate if the other side have given you what you want from the outset. Although, I guess it depends on how cheeky you wish to be.
Perhaps it helped that he saw that we had recently purchased two properties, on behalf of clients, in the area, and there were possibly more in the pipeline.
We are due to be exchanging on this deal for £760K, and expect a quick resell, no more than 6 months. We may get some light planning in motion, like a loft extension and a rear extension. This always helps to smooth a resale along, and doesn’t cost too much in relation to the uplift you are looking to get. There is much leverage one can get in just obtaining planning permission, without even doing any work on the property.
Suresh Vagjiani
