Let's talk CORPORATE SALES
If you’ve been following our Instagram/Facebook you might have noticed that we recently completed on a corporate sale property. We shared the highlight of finally getting that completion officially over the line but behind the scenes blood, sweat and tears (and dollar) went in to get to that point.
So let’s talk CORPORATE SALES.
The obvious place to start is “Well, what is a corporate sale??”. A corporate sale is a property being sold by a company (usually a bank), often a repossession or a deceased estate. Any accepted offers go to public notice - i.e. the number you have offered and had accepted gets publicised on Rightmove for every man and his dog to see and potentially GAZUMP.
The property we recently bought through this method (#PROJECTGRACE) wasn’t our first rodeo; our first attempt had a less satisfying outcome.
So what happened?
We were right at the beginning of building our property portfolio, we’d had our offer accepted and our price had been publicly advertised for 2 weeks whilst we’d plodded through conveyancing. We were literally in the bank wiring the money across to our solicitor when we got the call from the estate agent to say another offer had been received - £5k higher than our offer. The numbers at that level just didn’t work for us so we had to let the deal go.
I remember the moment when we looked at each other, devastated, and one of us instructed the bank clerk to cancel the CHAPS payment.
We still had to pay our solicitor and surveyor as they had done all their work, a total of £800 - EIGHT HUNDRED POUNDS - down the drain!
HOWEVER once the initial shock had subsided the antidote to disappointment was to keep our eyes fixed on the bigger picture.
Some wise and anonymous person once coined the phrase, “Don’t count the cost of the shovel when you’re digging for gold.”
In other words, don’t cry over losing small amounts in the pursuit of riches.
We’ve continued hustling and we’ve closed many deals since and we are still on track to get to our goals.
Anyway enough of that - what’s the story so far for #PROJECTGRACE?
Charlie viewed this one some time ago, thought the property had stacks of potential as a mini-mo and put a low offer in which was not accepted. We had a bit of back and forth with the agent (there are higher offers blah blah blah) (don’t believe there were actually higher offers at that time), but after a while the property did go to public notice with somebody else’s offer.
We then got a bit busy as you do, didn’t really think about it and then one evening we were chatting about any hot prospects in the pipeline and we came back to it. It was 2 weeks into public notice.
Long story short, we got into a bidding war with the other potential buyer and managed to secure the property eventually - we actually got to our very top offer, so we were pretty lucky as had the other party increased even by a little bit we would have conceded.
SO, what are a couple of real-life tips for when purchasing a property via corporate sale!
Often people don’t know what they are willing to pay until they see what someone else is willing to pay. I’m wired like that - when I’m in a restaurant I do find it weirdly helpful to know what other people are ordering before I make a choice, I think this is a similar principle!
There are people waiting for an offer to be publicised in order to get a feel for where their competition is BEFORE they offer. We learnt this the hard way on our first attempt to secure through corporate sale.
The less time your accepted offer is advertised the less likely you are to have your deal snatched. SPEED is your friend.
From our final offer being publicised we exchanged on #PROJECTGRACE within 3 working days, and the only reason it took that long was because the company selling had a stipulated minimum offer-advertising period. You kind of want your purchase secured before anyone has the time to react and counter-offer.
I guess to some people all of the above sounds pretty brutal but this is how corporate sales work; they are designed to give the company selling the fairest price based on market demand.
If you proceed to conveyancing on a corporate sale you have to be prepared that the rug might get pulled from beneath your feet at any moment.
And be prepared to keep your chin up if it does!
To a lot of investors, the highs and lows of buying through corporate sale just aren’t worth it and they steer clear - and that is absolutely fair enough. However there are some very juicy deals out there via corporate sale, and for us at Capstone Fox we would absolutely go for it again if the right property came up through this method.
How about you? Have you ever bought via corporate sale? Has it ever scared you off? Got any tips to share with us??
Got any questions on the above? Drop us a line to firstname.lastname@example.org or give us a call on 07546 820 941.