This is the Number 1 tip I give to buyers & it is the most important piece of advice; the Golden Rule, if you will. Whether you’re buying your first home, investing in property, or developing for profit... if you’re buying real estate you want to follow this core principle for buyers...
THINK SLOW - ACT FAST
Perhaps this seems really obvious. Is this really important advice? Yes.
Buyers get this wrong *all the time*, and it costs them time, money, and prime opportunities. It seems like incredibly simple advice. Deceptively simple, and that's the problem. It's too easy to say, "well, yes. Think before you act...that's obvious". Indeed, it is obvious... so why don't buyers do it?
Take it from a professional buyer: Think Slow, then Act Fast. It's the most important piece of advice you will receive.
Very often buyers of all kinds think, “Well, I’ll start looking around. That will help me decide what I want...” Then, they suddenly find a property and they really like, but they almost found it too soon... (niggling worries arise; "Should I keep looking?" - "I haven’t quite got my finances sorted out yet" - "Maybe I should wait a few weeks and think it over?"). Inevitably they call me a few weeks later to triumphantly announce that they have decided this property is the one for them. But it’s no longer available. Then they feel disheartened and down. And we have to start all over again.
There are stages, and a correct structure to the buying process, and it goes like this:
Phase 1 is working out WHAT YOU WANT TO BUY. This involves:
- Clarifying your financial position, and thinking about how you'll access your financial resources, and whether you're timetable may be affected by this.
How you wish to structure your purchase, how long it may take to move your funds around, and whether there are tax or other consequences to look into, are all things to be considered at the very start. These investigations and preparations can take a surprisingly long time, and could cause a deal to fall through later if not addressed in good time.
- Getting clear on what is available in your budget in each area, and then narrowing down your neighbourhood options...
Once you know what sort of budget you are working with, your Property Advisor or Buyer Agent will be able to let you know what neighbourhoods you will be able to target, and what your budget might buy in each. In major cities like London this may vary enormously. Perhaps you budget would buy you 3 bedrooms in one postcode, and 4 in the adjacent postcode. You'll then be able to narrow down which of those options your prefer (location vs value), or choose to explore both, so you can compare them in the flesh.
- Thinking seriously about what your Red Lines are...
If you’re a couple with a 1 child, obviously you need a place with at least 2 bedrooms - that’s a red line. Perhaps you need a space to work from home, so a home office/study is essential; red line. You may really like the idea of having a terrace or city garden, but that’s not a red line for you... it’s on your wish list (but you might be willing to forego that for a better neighbourhood, or perhaps a larger apartment or house). For investors, red lines might be a certain yield, or gross development value; a threshold below which the project would not be viable. Since the role of your Agent/Advisor is in part to help you save time, they need to have a clear idea of your red lines, so that they can ensure your time isn't wasted on looking at things aren't suitable, or viable for your needs.
Phase 1 can involve visiting properties, but be clear with yourselves and your Agent: this is not your search phase - this is your clarifying phase: do we even like this neighbourhood?; what styles/sizes of homes do you get here for our budget? etc.
Phase one is actually the critical phase, and the one that people skip too quickly over.
The buying process is incredibly stressful if you don’t have a clear idea about what you want. It might be fun to jump right in and start going and looking at properties, but things can start to go off the rails if the groundwork isn't in place. This is your THINK SLOW opportunity. Don't rush through this part - getting this nailed will position you to ACT FAST later, and jump on the right deal. And when you find that deal, you'll be feeling fully confident that it is, in fact, the right one.
Phase 2 is about logistical planning, and executing your targeted search:
You’ll know you’re done with Phase 1 if you’re feeling really clear on what it is you’re looking for...
Example: "A 2 bedroom / 2 bathroom apartment in one of these three target neighbourhoods, with good building management and transport links." Or, "1 or 2 bedroom investment units, with target yield of 4%, within 10 minutes walk of one of these 4 top university campuses."
LOGISTICAL PLANNING: Get yourself ready for when you find the ‘one’. Finance planning was Phase 1, and in Phase 2 we will be getting the rest of your 'support team' together right away.
- Using a great solicitor is very, very important to your outcomes. If you feel at all unsure about who to choose, ask you Property Advisor; we transact property all day long - we know exactly who's well-respected and who isn't, who's responsive and who will have have you tearing your hair out. After your Buyer Agent/Advisor, the conveyancing solicitor you choose will be the most important hiring decision you make, so taking recommendations is a great idea, if you can. Once you have chosen your solicitor, sign your paperwork. Get them started on all the groundwork, like identity checks, and other procedural things that can be done ahead of time. Your Property Advisor and your Solicitor will (ideally) work closely to get the deal done, so put them in touch now if they don't know each other. Your Advisor will keep the legal team updated as you go, so they can be ready to act efficiently when the time is right.
- In addition to conveyancing, you'll need to organise insurance and surveys, both of which can be handled by your Advisor. You'll also want to think through whether there will be removals or shipping to organise, or whether you'll need to acquire furnishings, or even carry out renovation or decorative works. These suppliers can book up, so giving them advanced warning would be wise.
YOUR SEARCH begins seriously in Phase 2.
Your Agent/Advisor will bring you a shortlist of all the properties that meet your criteria, and it’s time to take a good look at them. If you're in the country and visiting the properties in person, take notes at each property: be thorough, collect floor plans, and have a conference when you get home to recap what you liked (or didn’t like) about each one. If your Agent is searching for you (and you won't view them yourself, in person), they will have visited each shortlisted property, and will present you with all of the details. If you're having trouble visualising the place, you can ask you Agent to shoot some video, or annotate the floor plans and images for you, as well as photographing the property and local area.
At this stage you’re not merely browsing aimlessly around; the things you’re looking at should all be appropriate choices that fit your criteria, so, unlike earlier stages, it may be more difficult to choose between them.
If possible, walk through every property you like at least twice.
A tip I give here is to take a printed floor plan, and scribble your thoughts onto it as you go through each room..
The first time you walk through the property, just take it all in. Don’t worry about trying to remember details, just get a good feel for it.
Once you’re done, head right back to the front door. And start over again.
This time, scribble your notes onto the floor plan; if you’re standing in the hallway and it feels cramped, write “cramped” in the hallway. If you head into the kitchen and it has lovely big window and feels homey, write “good feeling. Lots of light”. Nose around a bit; think about light and aspect, and also listen for noise. Nobody else is going to look at your notes so don't be embarrassed to write down disjointed thoughts and random observations. It’s a great way to recap each one later, and remember the impression and the feel you got in each, as well as the details of what is positioned where, and what the practical pros and cons are.
This stage will end with a decision, but how quickly that happens can vary...
You might find the perfect property right away, and just know it's 'The One'. Or, you might go out on a few viewing days over a couple of months, until you find the right property. For investors, this may happen without viewing the property in person at all (many of my overseas clients buy like this), but when the right opportunity arises, you will know, because you laid thorough groundwork and know exactly what it is you're after.
Phase 3 is the final phase - PURCHASE.
If you’ve taken your time to lay the right groundwork in the THINK SLOW phases then you’ll not only be ready, but you’ll also feel confident to ACT FAST.
Taking a systematic and targeted approach to buying is crucial to feeling that sense of confidence that you’re making the right decision. Don’t let anyone rush you into it. Phases 1 and 2 (and particularly phase 1) aren’t a race. Take it slow, think things over. Ask questions, and prepare.
When you’ve found ‘The One’, it’s time to be decisive. Provided you’ve laid the right foundations you should be able to act swiftly and decisively now, to grab the opportunity that is right for you. Jump on it, and if you know you want this property - be swift, and clear in your intentions.
Sellers hate wishy-washy buyers, so come to them with a clear and simple pitch. This is called positioning yourself as the 'Preferred Buyer', and it's crucial...
The gist of a good pitch: “We are great buyers. We love this house and we intend to buy it. Our finance is ready (proof of funds available if necessary), our lawyer is awaiting our instructions, and we want to offer you a price of XX for your property. We hope that you will accept, and would like to exchange right away. We are willing to move as swiftly as your situation will allow.”
- How would you respond to this buyer? They're ideal, right? ...this pitch is credible, succinct, clear in it's intention, and flexible to the needs of the vendor. This is clearly a great buyer, worth the vendor's consideration, isn't it?
For investors the correct pitch is slightly different, but should underscore the same points: credibility and transparency (with respect to financial positioning), clarity of your intentions, readiness to move swiftly (legal team prepared and awaiting your go ahead), and flexibility (where possible) to demonstrate deference/respect to the vendor.
Buyers are often surprised to learn that sellers don’t always go with the highest offer. Of course price matters, but so do other things; being able to move quickly; being viewed as reliable and well-positioned (financially and legally); coming across clearly & honestly in the way you communicate. Vendors, like buyers, would like a simple and smooth transaction. Your Agent/Advisor will handle the wording of your offers and the subsequent negotiation, but no amount of polite or floral wording will disguise a lack of planning. Get yourself well-positioned, and then lead with that - it's always the best way to secure the deal.
These are the three phases that take you from intention to acquisition, and you can see from reading through them, just how important it is to go about your search, and subsequent purchase, in the right way.
If you want to ensure that you feel confident and assured when it comes time to purchase, you have to be clear on what it is you really want.
If you want to ensure that you don't miss out on the right opportunity (by delaying at the wrong time), you have to get all your ducks in a row beforehand.
Think Slow in the early phases, to Act Fast when the time is right. It's the best advice you can receive when it comes to buying, and if you follow it, you can be confident of securing your ideal home, or investment.
Thinking Slowly in the early stages allows you to Act Quickly when the time is right.