What is a Preferred Purchaser?
How do you become one? What are the top tips to get you to the front of the queue? How to buy from a position of strength?
What is a Preferred Purchaser?
Full transcript below:
Alex: So, we now sort of flip the coin slightly, and this is now, you’ve successfully sold our property and going onto the buying side, so, when you come to buy your property. So, as mentioned at the beginning, the aim when you come to buy your property is to become what I term, the preferred purchaser, and what a preferred purchaser means is that you are seen by the estate agent, you are seen by the house seller as the most reliable and most secure individual or buyer for that property but not necessarily the highest monetary amount. Because of course at the end of the day someone can offer you cloud nine money, but if they are in a five-man link chain and its all looking rather shaky, they can offer what they like because at the end of the day that’s very high risk. If someone is cash in a briefcase, in rented and they’ll do the deal in four weeks, you’re going to go with that option. So how do you become a preferred purchaser? As we’ve mentioned its getting yourself into the best possible buying position, ideally the ace card is going into rented accommodation, it just means that you get effectively red-carpet treatment the whole way and you will outdo anyone else that it involved in a chain because you are seen as low risk. When you come to buy, it sounds silly but do get your cash funds ready. Take them out of the HSBC Swiss bank account, bring them back onshore. Don’t have them in stocks and shares whereby it’s a five month lead out notice period to get them, you need to think about timings, pull the plug and get them into a nominated account. Key when you come to buy, once they are in the nominated account get a screen shot or a bank statement, scan it into your computer and email it to yourself because when you then co e to negotiate you’ve got proof of your cash funds instantly to hand so you can turn around instantly to the estate agent and say I am cash, bang, straightaway. You are then very much on the forward footing, the estate agent may not have asked for it yet, most agents who are worth their salt and good at their job will ask for it at some point, but you’re just seen as proactive you’re on the case, you know what you’re doing, the estate agent can relax and he gets passed on to the house seller/vendor and away you go, it just makes things so much easier. The other thing which people very often overlook is mortgages, and it’s a big hot topic at the moment and they still remain jolly tough to get. So, when you come to buy sadly gone are the days, it’s not good enough anymore saying to your mortgage broker what do you think I can get, and he’ll turn around and say well Alex I think I can probably get you £300,000, do call me when you find the right property. Absolutely wrong advice don’t do it. What you need to do is get your mortgage broker, not necessarily a high street bank I always say go to a broker that is whole of market. They don’t necessarily charge you anything as well, because they can claim a fee from whichever provider they sort of suggest, but get what’s called a AIP, a agreement in principal so this is taking you on from initial application through various steps and stages and whoever. Natwest will write to you and say Alex, one sheet of paper, very happy to give you £300,000 in a mortgage, that is your AIP. As we do with the bank statements, scan it in, email it to yourself, it’s part of your proof of funding, but again people often trip up at that point so when you come to buy the last thing you want is to be faffing around and you haven’t actually got a mortgage ready and how you will come undone as a result. The other thing again when you come to buy, do get your conveyancing solicitor ready. There’s much less to do but again get client ID signed off with them, get a file open and make sure they’re ready. Have a surveyor in mind as well and make sure they’re not going away on holiday for three months and make sure they’re available. If you are looking at that type of property make sure you’ve got your trusted refurb team on standby and again keep the personal rapport, it’s all about people, keep it up with the agent and the vendor because as we know once you go under offer there are quite a few obstacles to get to exchange, the better you get one with people the more likely you can overcome those issues. So, when I was acting for a client, this happened to be in North London, we were negotiating, we agreed terms and I instantly supplied on my clients behalf, proof of upfront, that’s our cash terms, that’s an agreement in principal he then said it’s agreement I’ll just type out the memorandum of sale, the solicitors can start speaking, he emailed that out, within two hours of that being received I had my solicitor calling him for extra information. I had my building surveyor calling saying can I have access. I had my mortgage broker ringing him saying what are the details, I need it. All of a sudden, the estate agents slightly on a back foot, not quite what he’s expecting and we effectively, we turned the tables. We became the one that was negotiating, to the one that was commanding the situation and calling the shots. So, as I said its about bolting out the tracks, best foot forward and it then meant that if we came to renegotiate post survey, you were doing so from a position of strength. Thankfully in this example, there wasn’t a need, it flew through survey, but it just goes to show if you start of with good intent, get the estate agent, get the vendor with you, you all head off in the same direction.