There’s a lot that goes into buying a property be it for residential, commercial or industrial purposes. One of the things that buyers often overlook is the pre-acquisition needs and requirements that are necessary for the transaction. Because of this, a number of mistakes are committed which lead to purchase failure or a poor deal. To avoid this, we’ve sought the lead team of experts from Alternative Bridging to warn us about these crimes and hopefully lead us to make better and worthwhile investments.
Forgetting and/or neglecting them
Not acknowledging them is the first step to failure. As mentioned, it’s not uncommon for many people to commit this mistakes given that majority of buyers are only focused on the asset’s price tag or its asking price. For example, a commercial building may be for sale at $100,000; however, there are extra costs to it that are spent and required prior to paying for the said value. There’s the money spent looking for the property, the expenses paid for professional serves to lawyers, real estate agent and chartered surveyor. Of course, there’s the security deposit and down payment.
Poor calculation and estimates
No one can predict every expense item to the dot but estimates serve as a good cue to guide us in our transactions and planning. When investing in an asset, a lot of information has to be taken in (e.g. market rates, economy, supply, demand, etc). Regardless, one has to be able to come up with realistic and close estimates to best prepare for these needs. Knowing the current market value of the property and the requirements mandated by the seller helps too.
Absence in the budget
Buyers need to prepare adequate funds. That means one’s resources should cover not just the asking price but also the unlisted pre-acquisition costs. Besides, one cannot acquire without having to drop bucks for the down payment or secure an asset with a deposit. Furthermore, many of these costs won’t even appear in the “for sale” advertisement or listing. Furthermore, one’s budget has to include ongoing costs as well but that’s a topic for another day.
Lack of preparation and source identification
Last but not the least, Alternative Bridging’s team warns us about inadequate preparation and planning. Pre-acquisition needs require money and with that the identification of cash sources. How does one plan to fund for these expenses? What sources will be tapped and what’s the status of their availability?
Visit http://www.alternativebridging.co.uk/development/ for more info.