Potential Pitfalls Of Property Investment
Common issues in property investment
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If only buying a property was as simple as we all wished. But given what is at stake, it’s no surprise that every last step of the process needs a lot of checking, double checking, and legal box ticking. For the inexperienced property investor, however, things can seem super complicated.
And the trouble is that it is easy to take your eye off the ball. When this occurs, there are a few common pitfalls that can often arise - and I’m going to take you through them right now. Let’s get started and ensure you are confident about recognizing these vital issues.
Let’s start with the property itself. It can often take a little while between exchanging contracts and taking over the home or building. But what happens is the seller damages something during this time? Technically, the seller should let you know if there is any new damage - but as you can imagine, it’s not always that simple.
Your best bet is to take out insurance from the day you exchange contracts. It will give you that little bit of assurance that you won’t have to face enormous costs by yourself if there is something awry. This issue also highlights the importance of paying for a proper survey just before you exchange. It will give you the proof you need that damage has occurred. And, as a bonus, if it reveals any issues you can start negotiating a discount.
It is essential to run checks on the people who are representing you throughout the sale. You need reliable, trusted lawyers and with first class reputations and experience. Don’t get palmed off with inexperienced staff and solicitors if you want to avoid mistakes and oversights.
If your lawyers do make a mess of things, you might have a case for negligence - for more info click here. There are other professionals involved, too; the estate agent, for example. But as a buyer, it is vital not to mistake them for being on your side. It’s the estate agent’s duty to represent their client. Sure, they will want to make the sale - but this can lead to added pressure on you. Let your solicitor know if the agent pushed you too hard.
Sellers and buyers
There are two sides to every property sale. You might think that you get on great with the seller and that everything is rosy. But it isn’t always the case. If someone comes in at the last minute and offers more money, the chances are they will gazump you. And the sad truth is, beyond appealing to the seller, there is nothing you can do other than entering a bidding war.
It can be heartbreaking - especially if you have fallen in love with the property. But you have to see it for what it is - a pure business transaction. Try and leave your emotions at the door, however hard it might be.
Borrowing money can always cause problems, no matter how much you earn. Lenders can value the property at less than the selling price, which means you might be a little short. In these circumstances your only real option is to negotiate a lower price with the seller.
You can also experience delays in getting your mortgage. Avoid this particular problem by ensuring you have given the lender everything they need to process your application.
Good luck - I hope everything goes smoothly!
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