How to Find Below Market Value Property In A Market Boom

So, here's the secret, here's what you need to do. I need to explain a little bit of background first of all. One in three sales in the UK falls through. That's the National Office of Statistics figures, one in three sales. It's actually 36% of deals. Why do deals fall through? A number of reasons. First of all, sometimes the buyer or the seller just change their mind. Usually it's a financing issue. The buyer is struggling to get their finance and thus can't buy the property.

Sometimes both the buyer and seller are very willing but maybe the buyer has to sell another property, before they can buy this one, and the sale of their property falls through. It's what we call a chain. So a chain breaks when someone in the chain can't do the transaction and everyone in that chain is affected. So this is why it's such a high number, one in three sales fall through.

Imagine for a minute that you've a property that you're selling, and you put it on the market. After a while you have some viewings, you finally get an offer that you accept and you’ve sold the property. That's then moving through all the legal paperwork that has to happen, the buyers getting their mortgage sorted out etc. Only until a couple of months down the line, and maybe even longer that, you get a call one day from either your solicitor who's selling the property or your estate agent and they say, "Really sorry to say, but the buyer can no longer proceed with the purchase."

It's an absolutely devastating phone call because mentally you've kind of moved on. You want to spend the money or you’ve thought about buying the new house, whatever you're going to do with the money. You've mentally moved on from this property and yet the property is there unsold, back to square one. You've got to have more people traipsing around your property. You've got to have the anguish of having offers or not having offers and negotiating. It's a real pain. Given that one in three sales through, it happens to many, many sellers.

So if you can find these people where a sale has just fallen through, they might be more flexible. They're going to be more motivated to give you either a lower price or flexibility on the terms of the sale. If you find these people where the sale has fallen through, they might be happier to sell to you at a better price. Many of my students have used this strategy. They might've made an offer on a property which was initially rejected, because the seller decided to go with someone else. The sale fell through, my client has gone back, and maybe this time the offer has been accepted, maybe they've gone with someone else again. So it was the third time my client was able to buy the property. But here's the interesting thing, sometimes at less than their original offer. So my client has made an offer. They're happy to pay that higher price but seeing as the seller has come back, they've been happier to take a lower amount. So this is how you can buy property below market value.

The key is to find motivated sellers. In a booming market, the biggest motivation is when a sale falls through. So how do you do this? When you're looking for properties I think on a weekly basis, you should be using the search platforms such as Zoopla and Rightmove in the area in which you're looking to invest. Type in your search criteria and then do a search to see what's available.

What most people do, they'll put in the criteria but they don't check a little box on the form. So on Zoopla, where it says advanced search, you click on an advanced search and you should click a box that says include SSTC and Under Offer. What does that mean? So when we do a search for properties, we actually want to include properties that have technically been sold. Someone has made an offer, it's been accepted by the owner and it's just going through to the legal paperwork. Now most investors don't want to have those properties come up because they think, well, it's sold. I've missed out. I'm too late. They don't even bother speaking to the agents about those properties. But my idea for you that absolutely works, is that you want to contact the agents about properties that meet your criteria - but have already sold. Remember, one in three of those sales fall through.

So you get the properties come up in the search, you call the agent, they'll say, "Oh no. "Sorry it's sold." You’ll need to find out how long ago was the offer accepted. If it's only just been accepted in the last week or couple of weeks, then fair enough. But if it was accepted months ago and the property still hasn't exchanged contracts, I would say something like, "Well, I thought it would have been exchanged by now. "Well just to let you know, "I'm really interested in this property "so can you let me know if any reason the sale falls through." They’ll then say, "Yes, of course we will but it's not going to fall through." That's what they think. They don't know. It might fall through because one in three sales in the UK fall through.

It’s not good enough for you to rely on the estate agent to come back to you. Some good agents will do that, but unfortunately, many agents are not that organised. They speak to a lot of people and they probably didn't bother to take a note because they thought the property was sold. So you need to be proactive. I would call that agent every two weeks about that property. Keep asking, keep on following up. You say, "Look, I know you've told me it sold, but I know things fall through. I just want you to know I'm here." So keep reminding that agent. If you're calling every two weeks about that property, I'm pretty sure no one else, unless they've done my training, will be that persistent. The agent will then remember you.

The day it comes back and they say, "Oh, it's failed." They’ll then say, ”That person, they were calling me, what was their name?" They should hopefully call you. But still, in case they forget, in case they lose your details, you need to be proactive. You need to be reaching out and asking them if it's still available. There might be a number of properties on the book. It's not just one property you're calling about. What about this one? What about that one? What's the progress? Just let them know you're interested. They need to know you are a serious buyer ready to move. So you need to be proactive.

When you do those searches on Rightmove, there's a little box next to ‘Find Property’. Again, you need to tick the box to say, give me the properties that are sold, subject to contract, SSDC and Under Offer. So it's in slightly different places on Zoopla and Rightmove but go and have a look for those.

Now moving forward, whenever you look for a property, make sure you check those boxes so those properties come up. This is a great example of doing something different to what the average investor will do. If you do what the average investor does, you're competing with everyone else and you're going to get the same results as an average investor. If you want to be a more successful investor, you need to do things in a slightly different way, a contrarian way maybe. So if you think the property is sold, great. Speak to the agent now.

This is a numbers game. A lot of those properties are going to be sold and you're not going to be able to do a deal. But all you need is one or two deals to come through that have fallen over. Particularly, if a sale has fallen over two or even three times. The seller is going to be desperate to get this next person who can actually deliver, who's actually going to come through and buy the property. For that certainty and the speed, they might even be prepared to be very flexible on the price and all the terms. This is actually a very simple concept when you think about it and I believe that to be a successful investor, you don't need to reinvent the wheel, you don't need to do lots of complicated things. You just need to do the right things consistently.