7 core mistakes3

The Seven Most ExpensiveMistakes London PropertyBuyers Make… & How ToAvoid Them

Please note that this report is intended solely for those acquiring

property over £1m in prime central London.

If you are planning to acquire a property in one of London’s internationallyrenowned addresses then you have one goal: to buy the finest property available

on the best terms possible. In order to achieve this goal, you need to exercise the

same care and attention you would when making a major investment.

Unfortunately the London property market is rigged against buyers. This is true

whether you are born and bred in London or if you are based overseas.

Consequently some buyers literally throw away hundreds of thousands of pounds,

and in many cases millions, by making a few basic mistakes. Fortunately many of

these mistakes are extremely simple to avoid.

This report will show you how. Whether you are purchasing a house which will be

your retreat from the frenetic pace of London life, whether you wish to find a home

in which to entertain and amaze your friends or whether you simply want to make

an astute investment. These strategies will help you find the best property in your

criteria without wasting huge amounts of time, money and stress.

The Prime London Property Market

Prime Central London consists of a number of neighbourhoods including

Knightsbridge, Belgravia, Mayfair, Kensington, Chelsea & Notting Hill. There is

a stunning array of modern and classical architecture, which attract the most

discerning buyers. Eaton Square, Chester Square, Egerton Crescent & Park

Lane have been internationally desirable addresses for centuries. More recent

developments such as The Knightsbridge, One Hyde Park and Montrose Place

provide 21st century facilities – spas, concierges, underground parking & 24 hour

security – for those requiring a family apartment or London base without the

concerns of maintenance and other tedious issues associated with classical

buildings.

Unfortunately, you can make some hugely expensive mistakes when acquiring one

of these properties. Although the prime central London property market is mature,

it is biased against buyers. However, if you understand how the London property

market works, then you can use the system to your advantage.

INTRODUCTION

THESEVENMOST EXPENSIVEMISTAKES LONDONPROPERTY BUYERSMAKE…&HOWTOAVOID THEM

INTRODUCTION

Who am I and why should you followmy advice?

My name is Jeremy McGivern, founder and managing director of Mercury

Homesearch, London’s internationally renowned property search agency. I have

been acquiring property for an elite list of clients since 2001. I have appeared on

Bloomberg Television and my opinions have been sought by The Financial Times,

The Times, The Sunday Times, The Daily Telegraph and numerous other major

publications. I was also named as one of the most influential figures in Prime

Central London property in Spears’ Wealth Management’s Property Power Index.

The information and strategies you are about to learn are the culmination of over a

decade’s experience buying property in prime central London combined research

we had conducted by an independent company, Empire Research Group.

I will show you the techniques we use to obtain “inside information” so that our

clients can have first refusal on the most exquisite properties.

These are proven strategies which you can use to acquire distressed

properties or the outstanding property in your criteria before other

buyers have even heard about them.

Just as importantly, you will discover how you can avoid throwing away vast sums

of money unnecessarily.

“We had been looking to acquire a property in prime central London for

some time. We had asked various companies to help us with this, but were

having little success. By chance we mentioned this to a business associate

who recommended that I speak to their property adviser, Jeremy McGivern,

at Mercury Homesearch. Within two weeks he had found two suitable

properties and had arranged viewings to fit in with our schedule. He

provided detailed information on both properties and gave us objective

advice.

When an agreement had been reached he recommended a solicitor who had

specialist knowledge of the building in question. Jeremy also liaised with our

representative to ensure that the transaction proceeded as smoothly as

possible. In the end it was seamless. It was a pleasure to deal with Jeremy

and the whole process was extremely smooth. He was efficient and

knowledgeable as one would expect. The standard of service was impeccable

ensuring that every request was dealt with swiftly and elegantly even after

the purchase had been completed.We continue to have him represent

us and would highly recommend you employ his services if you

wish to buy a property in London.”

For & on behalf of Enduring Overseas Inc. – Knightsbridge

THE SEVENMOST EXPENSIVEMISTAKES LONDONPROPERTY BUYERSMAKE…&HOWTOAVOID THEM

INTRODUCTION

Although it is incredibly obvious, very few buyers realise that they are at a

disadvantage. This is because it is the status quo, the way buying and selling

property has been handled for centuries. Many assumed that, with the advent of the

internet and property websites, the situation would improve. In fact this has probably

led to most buyers becoming more complacent and even less thorough in their search.

In fact research by The Financial Times has discovered that the average buyer only

spends 96minutes viewing properties before they buy – This is 43minutes less than

people typically spend deciding on where to go on holiday or which computer to buy.*

If you follow the same strategy, the probability of you finding the best property available

is extremely low. In fact, relying on the internet could prove fatal as you will learn later.

When buying property in London the 2% rule definitely applies: 98% of buyers do

the same thing and so buy poor or average properties. Going along with the herd

simply isn’t an option. Fortunately for you, you can be one of the 2% who turns this

situation to your benefit.

Why Are Buyers At A Disadvantage?

The reason is simple: estate agents. The majority of property in London is sold

through estate agents. This is hardly a revelation. The problem is that most buyers

forget the real role of the agents.

It is essential that you remember the following:

• Estate Agents Are Employed By Owners – they are legally obliged to sell

their clients’ property for the highest price possible, on the most favourable

terms possible. They only have a “thin legal duty” to buyers.

• You Are Not The Priority – Each agent can have over one hundred buyers

registered with him/her. As friendly as the agents may be, they are not

concerned who buys the property as long as a high price is achieved for their

client. Their focus is not to find you your perfect home, but to sell one of their

clients’ properties to you.

• Each Estate Agent Can Only Show You A Small Percentage Of The

Properties Available – The agents can only show you the properties on

which they have been directly instructed. Therefore you need to be registered

with every suitable agent to ensure that you do not miss out on the best

opportunities (it is true that some properties are shared amongst the agents.

However, these tend to be the properties that they are having trouble selling).

* Source: FT Weekend – 31st July/1st August 2010

THE PRIME LONDON PROPERTYMARKET IS RIGGED AGAINST BUYERS


• The Finest Properties in Prime Central London Rarely Reach The

Open Market – You need to be able to source those exclusive “off market”

properties that the average homebuyer never even knows exists.

This is why acquiring a home is rarely the enjoyable, exciting experience that it

should be. If you follow the route that the typical buyer takes, you will find it an

unbelievably time consuming and frustrating battle.

Of course, if you are based outside of London or are simply extremely busy, the

problems are exacerbated: it is harder to discover all the relevant agents and to stay

in regular contact. In addition it will also be very difficult to view properties.

Therefore the estate agents are more likely to contact other buyers about the best

properties before they call you (it is a simple fact that they will be more likely to

earn their commission by focussing on clients who are easy to contact and can view

properties quickly).

If you are similar to our clients, you are highly successful and either focussing on

business opportunities or other interests. However, you must find the time to carry

out the necessary research to find the finest property in your criteria and ensure that

you are not paying an excessive price. Most buyers fail to plan their acquisition.

Therefore they actually spend more time than is necessary, fail to find the best

properties and end up making an average purchase at a high price.

Fortunately, you can avoid these issues by following eight simple steps to ensure

that you make an astute acquisition (Alternatively, if you are too busy or have no

inclination to handle the process yourself you may want to be represented by a

reputable property search agency).

These are steps we follow ourselves to achieve fantastic results, as described by a

recent client:


THE PRIME LONDON PROPERTY MARKET IS RIGGED AGAINST BUYERS


TESTIMONIAL

January 7, 2010

ToWhom It May Concern,

If you wish to acquire a property in London I strongly recommend you use Mercury Homesearch.

I have no doubt that we would not have been able to buy a property, which represented suchvalue in one of London's finest addresses, without his knowledge and expertise.

I live in India and wanted to buy a home in Belgravia, Knightsbridge or Mayfair for my family.Although I am a director of one of the largest property companies in India, I have had littleexperience of prime London market. In addition I was too busy to carry out the necessaryresearch and barely had time to visit London to view potential homes. Consequently, I neededsomeone with a proven track record to source all the suitable properties available, refine theseinto a shortlist and then to advise me on the value and to negotiate accordingly.

Mercury achieved this and more. While I was in India Jeremy McGivern provided me withdetails of suitable properties, honestly describing the pros and cons of each. When I was able tovisit London I was taken on a tour of properties that fitted my criteria. I was able to look at theseon my own pace as Jeremy escorted me on the viewings so I was not 'sold to' by the estate agents.I quickly decided that I required a larger property. Unfortunately I was only in London for fivedays, but nevertheless Jeremy was able to show me a good selection of homes that fitted mycriteria.

When I had decided on a house, Jeremy arranged for a firm of builders (who have carried outextensive work in Belgravia) to visit the property the following day to advise on whether a liftcould be installed and give rough estimate on the refurbishing costs. He then recommended atarget purchase price providing comparable details, so that I could be sure that I would bemaking a good acquisition.

He then carried out the negotiations successfully and was extremely diligent in ensuring that thetransaction proceeded as smoothly as possible – he recommended an excellent solicitor andsurveyor and co-ordinated with my team in India. He even arranged for a security system to beinstalled ready for completion as we would not be there.

In addition it was a pleasure to work with him as the service was impeccable: from providingchauffeur driven cars, to recommending restaurants and places for my family to visit. Everythingwe asked for was handled swiftly and efficiently. I look forward to having him represent us againin the future.

Sincerely,

Mr A.L. – Acquired a 5200 sq.ft. home in one of Belgravia’s finest addresses

Iam not going to pretend that the process of preparation and planning is exciting.

In fact it is remarkably dull. However, the results will be exceptional and the

good news is that you can delegate most of the work.

Fortunately for you, most buyers do not treat the purchase of a home as a business

transaction. Consequently they are ill prepared. Youmust not make the samemistake.

You must be in a position to act swiftly when you find your perfect home. If you are

not then it is likely that you will suffer the frustration of losing it to another buyer.

We have often been able to secure advantageous terms for our clients

or had offers accepted which were not the highest put forward, simply

because we made sure we were able to act more quickly than anyone else. This is

down to some very basic preparation:

• Have your finances inplace–However you plan to finance the acquisition,

you have to ensure your financier is aware of your plans so that he/she canmove

quickly when asked. As a rule, youwill need to put down 5-10%of the purchase price

as a deposit on the exchange of contracts. The balance is paid upon “completion”.

It is possible, although rare, to “exchange” within hours of seeing a property.

If you are planning to buy an investment rather than a home there are also

ways to reduce the income tax exposure. (If you would like specific information

relating to your particular situation on either of the points above please email

[email protected] or call +44 (0) 800 389 4280 – as

you will understand there is simply not the time to look at each scenario here).

Youmust have this organised prior to making an offer otherwise there

will be delays. Any unnecessary delays may cause you to lose your ideal home.

The vendor can pull out of the agreement at any time especially if the

transaction is taking too long – Important – the agreement is not legally

binding until contracts have been exchanged.

Why take this risk?

• Prepare for SDLT – Stamp Duty Land Tax is payable by the buyer on the

purchase of a property. It is currently 4% for transactions over £500,000. The

government has recently announced that this will be increased to 5% from 6th

April 2011 for transactions over £1m. Again this can be legally avoided although

many solicitors do not offer this service. This is simply because it is not their

area of expertise. Therefore it is essential that you choose your solicitor carefully.

STEP 1 – PREPARATION


• Instruct a solicitor – It is essential that you use a solicitor who specialises in

London property transactions. You would not rely on a criminal expert to work

on a corporate case, so do not instruct a solicitor who is not a property

(“conveyancing” is the technical term if you like jargon) specialist. Again they

must be available to act as soon as you are ready to make a purchase. Therefore,

you should have instructed a solicitor to act for you before you even start

looking for a property.

There are money laundering laws which require solicitors to check

identifications and the source of funds before a transaction can proceed (this

will be more complicated if a specialist structure is being used). Have

everything in place so that you can avoid unnecessary delays.

• Instruct a surveyor – In most cases a survey will need to be carried out. You

need to have two or three surveyors prepared to act for you at short notice.

• Be available – You may need to view properties at short notice. Obviously this

may not always be possible, but if you have people whose opinion you trust, ask

them to view properties for you.

If you are well prepared this will be the basic foundation for your success. If you are

not, I can guarantee you will have to endure one of the following scenarios. You will:

1. Miss the best opportunities – our best acquisitions have always been made

when we have been able to move swiftly and pre-empt the competition, i.e.

other buyers.

2. Have to offer more to make your bid more attractive than that of another buyer

who can move more quickly than you.

3. Lose the property even if you have agreed a price and been sent the contract

– the delays caused by your lack of preparation will mean the seller will lose

confidence in your ability to complete the purchase. They will allow other

potential buyers to acquire the property. You will have wasted a lot of time,

energy and money.

IMPORTANT NOTE: Property transactions are often complicated, so can take

time. There is no legally binding agreement until you have exchanged contracts.

Agreeing the price is not the end of the negotiation.


STEP 1 – PREPARATION

One of the main reasons why buyers waste huge amounts of time is that they are

not truly focussed on what they want. If you do not have a clearly defined

picture of what you require, you will spend hours looking at unsuitable properties.

When we first meet our clients we spend considerable time discussing their

requirements to ensure that everything has been considered.

You obviously need to know the basics like the number of bedrooms, bathrooms,

whether you need a separate dining room, budget, etc. However, you also need to

consider:

• The condition of the property

• Length of lease

• Will you require a lift?

• Views and orientation

• Architectural styles – both internal and external

• Service charges

• Will you require a garage, swimming pool, gym, media room, etc?

We have also discovered that one of the most revealing questions we ask is: “What

do you want to avoid?” This will help you paint a clearer picture of what you want

and therefore reduce the amount of time wasted on viewing unsuitable properties.

You will also quickly be able to assess whether your criteria are realistic and modify

them accordingly. Too many buyers spend months trying to find “a needle

in a haystack” when in fact the needle never existed in the first place.

TIP: If buying an investment property, be very clear on what returns you

require. Do not make the mistake of confusing your criteria – just because you

would not live in a certain area or type of property does not make it a bad

investment.

“We used Jeremy to help us find an investment property in London. We were

not going to have time to evaluate the market fully ourselves and wanted

someone to give us good, honest advice on location and value, and to find us

the best property that would meet our objectives. Jeremy did just that. He

was also extremely efficient and helpful, not only up to completion but also

afterwards. We would use him again.”

Mr. C. Dowling (Chelsea & Kensington)

STEP 2 – REFINE YOUR PROPERTYCRITERIA


Ihave already mentioned this, but it is worth repeating: The majority of propertiesare sold through estate agents, but buyers forget that this immediately puts them

at a disadvantage:

• EstateAgentsAreEmployedByOwners– they are legally obliged to sell their

clients’ property for the highest price possible, on themost favourable terms possible.

• You Are Not The Priority – Each agent can have over one hundred buyers

registered with him/her. As friendly as the agents may be, they are not

concerned who buys the property as long as a full price is achieved for their

client. Their focus is not to find you your perfect home, but to sell one of their

clients’ properties to you.

This does not mean that you should avoid the agents. One of the biggest

mistakes that buyers make is insisting on only seeing “off market”

properties. This is partly because they are in contact with the bigger agents and

therefore assume, wrongly, that they are seeing everything openly available. There is

also the view that “off market” properties are more prestigious. Indeed this is often

the case. However, the agents do hold properties “off market” themselves.

Nevertheless, the agents will be your main source of properties. However, you cannot

rely on them to contact you. You need to ensure that you are at the top of their list

of “preferred buyers”. This will be essential as you want to be the first to hear about

the best opportunities when they become available. Therefore you need to:

• Register with every estate agent in your target area – Remember the agents can

only show you the properties on which they have been directly instructed.

Therefore you need to be registered with every suitable agent to ensure that you

do not miss out on the best opportunities – at the time of writing there are 196

estate agencies in prime central London. At the time of writing there are

223 estate agencies in prime central London. If you only register

with ten agents you are immediately reducing the probability and

likelihood of success.

• Do Not Rely On The Internet – Over 75% of people start their search

online, because it seems like the most efficient way to source properties in

such a fragmented market. Unfortunately, they are severely hindering their

chances of seeing the best properties: The Sunday Times reports that “The

best property that comes to the market sells almost before going onto the

Internet”.(November 29, 2009).

STEP 3 – DO NOT RELY ON ESTATEAGENTS OR THE INTERNET


Indeed Savills reported that 46% of properties on its books at £2+ million

are ONLY available privately and Knight Frank reports more than 30% of

sales of £2+ million homes and 52% of the £5+ million are off-market

properties.

YOUMUST CONTACT THE AGENTS AT LEAST ONCE AWEEK

TO BE THE FIRST TO SEE THE BEST PROPERTIES

• Provide a clear list of criteria for the estate agents – they will see that you

are serious and focussed on the search. The clearer the requirements the

less of your time will be wasted. However, you have to strike a balance – be

careful not to be too exact otherwise the agents may omit to tell you about

suitable properties.

• Let the agents know you are in a position to move quickly and that you are well

organised. Ultimately they want any sale to go through quickly and easily so

that they can earn their commission. Show them that you are prepared and will

act professionally.

• Build a good relationship with the agents. Call them at least once a week and

do not rely on email, which is impersonal and will be deleted and forgotten.

• View properties whenever possible or have a representative view them on your

behalf. However, if you do not think a property is worth viewing explain why to

the agent, so that he/she gets a better picture of what you want.

• Always give feedback on a property the following day – again very few people

do this and it will make you stand out.

Of course, if you are based overseas, you must be careful not to constantly call the

agents if you know you are not going to be in London to view the properties. The

agents may begin to think that you are wasting their time (they make their living by

selling properties so will understandably focus on those buyers who are actively

looking) and then will not be motivated to call when you actually are ready to view.

So you need to judge how often you should call them - perhaps just call twice a

month for updates until a month before you arrive in London. Then follow the

steps outlined above.

Again this advice may seem simple, but too many buyers rely on websites and email

hoping that technology will make life easier. It is easier, but not effective – if

everyone else is doing this how do you expect to gain an advantage and have first

refusal on the best properties?


STEP 3 – DO NOT RELY ON ESTATE AGENTS & THE INTERNET

London’s finest and most exceptional homes rarely reach the open market.

Obviously we have an advantage when sourcing these, because:

• We have cultivated a vast network of contacts.

• We have an intimate knowledge of the finest properties in London. Therefore

we are able to identify suitable homes for our members and can approach the

owners directly.

• Many homeowners approach us directly to enquire if their home would be

appropriate for one of our clients. By doing so, they can sell their homes

discreetly and be assured of a smooth and professionally handled transaction.

However, there are other strategies we employ which you can use too.

1. Place adverts in suitable publications like the Financial Times describing

the type of property you require. Remember you need to attract the readers'

attention so make sure the headline stands out and make sure you position

yourself as a strong buyer. This can be an expensive way to find a property as

you may have to place numerous advertisements and are not guaranteed

success.

2. If you have a very specific area you are targeting – walk the streets

to identify potential properties and write a letter to the owners.

3. If you are looking for a property with a concierge or porter visit

suitable buildings and speak to them. Porters are a great source of

information and if incentivised can ensure you hear about upcoming sales.

4. Contact developers directly – They may be happy to sell to you instead

of placing the property on the open market for a number of reasons, e.g. they

save on marketing costs or an early sale might help their cashflow, etc.

5. Inform friends and family that you are looking for a property –many

of our members require complete discretion so this approach may not be

suitable for you either. However, if this is not an issue you may be surprised

how often a friend of a friend or even a business acquaintance will know

someone who is considering selling a property.

STEP 4 – SOURCE OFF MARKETPROPERTIES


Unfortunately buying off-market property can put you in a weak position when

negotiating if you have to make the initial approach. You may have to pay a

premium to acquire the property, if the owners had not planned to move. For

some of our members this is irrelevant as they only want the home of their dreams

and the best of the best.

However, if you are a skilled negotiator you should be able to counter this

problem.


STEP 4 – SOURCE OFF MARKET PROPERTIES

Iam often asked what is the biggest discount I have negotiated on a property.

Unfortunately, this misses the point completely. The size of the discount is only

relevant if the property is fairly valued in the first place. Negotiating a discount of

20% is no good if the property was 50% overvalued in the first place.

As an example, I am currently negotiating on a property for a client. It is on the

market at £6m. If I did not know the real value and thought that a 25% discount

(i.e. a purchase price of £4.5m) represented a brilliant piece of negotiating, then my

client would be overpaying by roughly £1m.

ACCURATE INFORMATION IS ESSENTIAL IF YOUWISH TOMAKE AN

ASTUTE ACQUISITION – if you have a good feel for values then you will spot

the bargains and be able to move before anyone else. You will also avoid

unwittingly overpaying.

Unfortunately, the property market is opaque. The information available is often

incomplete and out of date. For example, you can visit www.landregistryonline.gov.uk

to discover what properties have sold for in each street. Unfortunately this data will

not tell you the size, condition or lease of the property. Therefore the information is

of limited use.

You can also visit www.primelocation.com or www.globrix.com to see what is

currently on the market, but again these only show guide prices rather than

purchase prices. Therefore, you need to be very careful when assessing the value

of a property and carry out as much research as possible. You may need to visit

numerous homes in the area to get a feel for price. You should also speak to all the

agents, with whom you are in contact, to find comparable data and ask if they can

provide the old details for houses they have sold.

Remember that the agents are paid to achieve the highest price possible for their

clients so you must take their information with a pinch of salt. They should not lie

to you, but do not use one piece of comparable data as concrete proof – just

because one house has sold for a high price does not mean that it was the right

price – the buyer may not have known what they were doing (we see this happen

every week). Conversely do not be put off if you see one other comparable which is

much cheaper. The buyer may have found a fantastic deal and does not necessarily

make your potential acquisition a bad one.

STEP 5 – ARGUABLY THE BIGGESTMISTAKE YOU CAN MAKE


www.globrix.com

www.primelocation.com

www.landregistryonline.gov.uk

Double check all information and find as many comparables as possible. Only once

you have a good idea of what similar properties have sold for can you start making

an informed decision on what you should be offering to acquire the property.

However, the most important information is often related to the owners of the

property themselves. Some useful questions include:

• How long has the property been on the market?

• How many viewings have you done in that time?

• How many offers have you had?

• Why do you think you have not had any offers?

• How did you calculate the asking price?

• What price do you think they would accept?

• Why are they selling?

• What have they said about the lack of offers?

• Where are they moving to and have they found somewhere to buy?

The better the relationship you have with the agent, the more

information you will uncover and they may let slip a vital detail. This could

make all the difference in the negotiations.

An Important Note On Short Leases – Many buyers are put off acquiring

short leases, because they do not understand the leasehold system and/or believe

short leases to be inherently bad. Nevertheless, short leases can be very good

acquisitions. However, this is a highly specialised field – some leases cannot be

extended and valuing short leases and calculating the cost of the lease extension is

extremely complicated. This is not something you should attempt yourself.

Unfortunately, it is too vast a subject to cover here, so please contact

[email protected] for further information.

“I have never had a service that I would recommend as wholeheartedly as

Mercury Homesearch. From beginning to end, Mercury helped us through

the tortuous process that is buying a house – from dealing with estate agents,

to employing solicitors, negotiating the price (and getting a much better deal

than I would have attempted) ... We’ll be using them again.”

Mr &Mrs D. Loehnis (Lancaster Gate)


STEP 5 – ARGUABLY THE BIGGEST MISTAKE YOU CANMAKE

Negotiation is a skill which can be learnt, so do not worry if it does not come

naturally to you. We could write a book on the subject and we strongly suggest

that you read as much as possible if you have little experience of negotiating.

However, we will offer a few simple tactics, which will give you an edge over most

sellers:

The key to a successful negotiation is to have as much information as possible. For

example, if you can discover that the vendor must move quickly, then you know

that price is not the only motivating factor.

1. Keep asking questions throughout the negotiation – one piece of information

could make an enormous difference.

2. Before you enter the negotiation you must commit to a ceiling price which you

will not exceed. This will be based on the data you have accumulated and the

discount or premium you are willing to pay. If you stick to this, you cannot

“lose” the negotiation even if you do not come to an agreement.

3. Never make your first offer the asking price or your ceiling price. You want

your first offer to be declined – if it is accepted you know you probably

could have acquired the property for less. The owner is also more likely to

renege on the agreement later, thinking that he may be underselling the

property.

4. Always ask for more than you think will be accepted. This may be in the form of

a low offer, but you should also ask for additional items to be included, e.g. The

Aston Martin in the garage, some of the artwork, antique chandeliers, snooker

table etc. The point is that you do not expect or necessarily want these items,

but you can concede them later in the negotiation to appear flexible.

5. Make any increases in your offer in decreasing increments – e.g. £5m, £5.5m,

£5.75m, £5.9m. This will give the buyer an indication that you are coming to

the end of your threshold. Also if you make large increases in your bid the seller

may think, rightly or wrongly, that you have more money available and may

demand more.

STEP 6 – LEARN TO NEGOTIATE


6. Always ask yourself: “What can I offer the seller that would be of huge value to

them, but little loss to me?” For example, a swift exchange with a delayed

completion, paying in dollars rather than sterling, etc.

7. Always seem reluctant to buy and make it clear that you will be happy to walk

away from the negotiation at any time. If the owner is keen to sell (or the estate

agent needs the sale to hit his/her sales target) then they will not want to run

the risk of losing you! Of course you need to take the market as a whole into

account. If there is strong demand but little supply then the seller will have the

upper hand and you will need to tailor your approach accordingly.

8. If a seller agrees to your offer but later changes the terms, ask for

somethinggreater in exchange. For example, you agree a price of £8m with a

quick exchange and normal completion, then later they ask for an extended

completion. You need to demand something in exchange –“To be able to give

you the extended completion we will only be able to pay £7.5m.” They may or

may not agree to the reduction, but it will stop any further “chipping” in the

negotiation.

9. When putting forward your offer always put it in writing. Make sure you list all

of the items so that there can be no confusion or arguments later in the process.

Make sure that any offer is made “subject to contract and survey” and always

insist on an exclusivity period “from receipt of a full set of papers” in which to

exchange contracts. For more details you should contact your solicitor, who

should be able to advise you on this.

This is a very brief and basic list of tactics, so you should really read more on the

subject of negotiation. However, if you put these ideas into practice you will have a

far greater chance of concluding a successful negotiation.


STEP 6 – LEARN TO NEGOTIATE

Remember that agreeing the price is only the first phase.

25% of purchases fail between the completion of negotiations and the exchange of

contracts. The legal process can be extremely drawn out and the longer it takes the

more likely it is that the deal will collapse – the seller might receive a higher offer

or think that he is selling for too little.

We always demand a period of exclusivity to avoid other buyers trying to increase

their bids. This can be structured in various ways and should be discussed with

your solicitor before you include it in your offer. However, we advise against

putting down a non-refundable deposit as the risk is often not worth it and we have

never had to go down this route (obviously there are situations where a non-

refundable deposit may make sense. However, these situations are rare).

Ultimately, it is your responsibility to make sure everything proceeds smoothly.

You need to co-ordinate your financier, solicitor and surveyor. Remember your

solicitor will probably not see the property so you need to give him or her as much

information as possible and flag any potential points of concern.

You also need to ensure that the other side is acting swiftly. If they have a solicitor

who does not specialise in property you need to ensure that the estate agent is on

top of the situation.

There may be numerous third parties involved as well including managing agents,

The Grosvenor Estate, English Heritage, the local council etc. You need to ensure

that your team is ahead of the game and that the seller’s side is providing the

information in a timely fashion. If you do not, you must be prepared for the

frustration of losing your ideal home.

Remember yours will not be the only house purchase your solicitor,

surveyor, financier will be involved with, but you need to make sure

they are focussed and efficient when handling your case.

Fortunately, most problems can be resolved if handled efficiently. The key is to

have a good team in place (see Step 1) and good communication.

STEP 7 – THE AGREEMENT IS NOTLEGALLY BINDING UNTIL CONTRACTSHAVE BEEN EXCHANGED


Asyou can see it is very easy to throw away hundreds of thousands of pounds

when buying property in prime central London. You can make a poor

purchase, pay too much or waste money by paying tax unnecessarily. In the worst

cases you can do all three and many people do.

Fortunately most of the steps you need to take to avoid these mistakes are very

simple although not particularly exciting. For many they appear too simple or

boring to make a difference, which is why most buyers fail to follow them (see the

2% rule). Consequently they make average or poor acquisitions and fail to put

adequate structures in place to protect their wealth.

Admittedly, you will need to spend some time and energy following these steps, but

over the entire process they are guaranteed to save you time, stress andmoney. You

have the choice to follow the boring, disciplined approach that works. Or you can try

the haphazard approach adopted bymost buyers and hope you get lucky. Just be aware

that this approach leads to huge amounts of wasted time, energy and disappointment,

not to mention a poor or at best average acquisition. The choice is yours.

How do the world’s most successful entrepreneurs, CEO’sand wealthy families acquire property in London?

Of course you may be like our members and are one of those select few for whom

time is too precious a commodity to spend learning the intricacies of the prime

London property market.

You do not have the time to deal with the dull process of calling all the relevant

agents and then wasting time viewing “suitable“ properties, which actually fall a long

way short of the prerequisite standard. Neither do you wish to endure the stress and

frustration of negotiating with estate agents. Nor are you excited by the thought of

dealing with all the tiresome bureaucracy and legal machinations involved.

Quite simply the common, run of the mill way to buy property is inadequate for

your unique requirements. Fortunately, the more discerning buyers have

discovered that they can have first refusal on London’s most outstanding homes

while transcending the frustrations of the average person.

What do they have that you don’t?

SUMMARY


Membership to Mercury Homesearch, London’s internationally renowned property

search agents. We only ever act for a select list of buyers and have a proven track

record of outperforming our members’ expectations:

“We were extremely happy with our membership to Mercury – and the whole

process of finding a property would have been a lot more exhausting without

them. Our personal consultant was scrupulously punctual on all our visits,

brilliantly well organized and always followed up on visits. He provided us

with background information... and gave us a very good sense of how

realistically priced a property was. He was also sensitive to our specific

needs, tailored the viewings, and handled estate agents and our expectations

very well indeed - more importantly he turned out to be a fantastic

negotiator as well!"

MrM. Gwynne (Acquired a 2800 sq.ft. house in Kensington with

direct access to communal gardens)

If your application to join Mercury Homesearch is successful:

• You will only have to make one call to discover every property on the

market – so you will avoid suffering the normal stress and wasted time that

the typical buyer endures. Your personal consultant will use our list of 376

contacts to find and preview every suitable property available and source off-

market properties too. Although this is not glamorous work it ensures that you

will have total market coverage and first refusal on the most exclusive homes.

• You will only be presented with the best of the best in your chosen

areas – Before the search commences, your personal consultant will meet you

to discuss and analyse your requirements to create a detailed brief. Your

consultant will then preview every suitable property and refine these to a

shortlist of the most outstanding residences. This will ensure that you only see

the homes that meet or exceed your unique requirements. If your consultant

believes all the properties available are inadequate then you will be advised not

to waste time viewing them. The search will continue until a suitable residence

has been located – in nine years we have never had a member complain that

their time has been wasted on viewing an unsuitable property.

• You will not be pressurised by estate agents –You will be chauffeur

driven to each viewing where you will be escorted by your personal consultant

to discuss each property and to ensure you can examine each residence at your

leisure. You will not be subjected to sales pressure by the estate agents (who are

representing the owner).


SUMMARY

• You will be advised on price – It is impossible to negotiate intelligently

without knowing what represents fair value. We will give you a detailed account

of how we have calculated this figure, which will include accurate comparable

data, that is not available to the average buyer, so that you can make an

informed decision. We will also conduct further research into the reasons for

the sale to strengthen your hand in the negotiations.

• You will be represented by an expert negotiator –We will devise a

strategy to achieve the best price possible. This will depend upon the

information we uncover and the variables which will be unique to that

particular property and the parties involved in the negotiation. You will always

be informed of our strategy and we have a proven track record of

achieving better prices than our members would have negotiated

themselves (if you would like to speak to past members this can be arranged).

• You will avoid all wasted time, stress and frustration – Once the

negotiations have been successful, we will co-ordinate the solicitors, surveyors

and financiers to ensure a smooth transaction - over 20% of purchases fail

because this is not handled correctly (Please note that we will not handle the

purchase money itself, so there is no question of fraudulent behaviour).

• You can maintain your privacy – Many of our clients require the utmost

discretion. All information is strictly confidential and we can structure the

acquisition so that you can remain totally anonymous if you wish.

I am so confident that you will be delighted with the service you will receive that

you will be covered by the Mercury Guarantee:

"If you are not entirely satisfied with your membership within the first month, we

will return you membership fee immediately (no small print or unscrupulous

caveats)". No-one has ever enacted this guarantee and over 70% of our members

are referred to us by past members. However, I believe in this day and age of

excessive hype that you should have the luxury of being able to decide whether we

are as good as we say.


SUMMARY

If you would like to acquire the finest home available on the best terms possible,

but are too busy to handle the process or would prefer experts with a proven track

record to represent you, I would like to invite you to join our elite circle of

members. Please call us on +44 (0) 800 389 4280 or email

[email protected] to reserve a membership

consultation.

I look forward to hearing from you.

Best regards,

Jeremy McGivern

Managing Director –Mercury Homesearch

London’s Internationally Renowned Property Search Agents

p.s. All members are covered by the Mercury Guarantee: "If you are not entirely

satisfied with your membership within the first month, we will return you

membership fee immediately (no small print or unscrupulous caveats)".

p.p.s. We have one rule that is sacrosanct: "No two members may have similar property

requirements". You will not be eligible for membership if your requirements clash

with those of a current member.


SUMMARY

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