Snap up a SNIP - 25 November 2008

Posted by Paul Collins 1 comment

We’ve waited a while for a new acronym to hit the overseas property market, but now we have a phrase with which to describe what is going on in the international real estate market. Having gone through BARBies last year (Buying Abroad, Renting in Britain), we are now faced with SNIPs - Secure Now, Increase Pending.

This idea, which does actually make sense in the current climate, has been coined by Serge Cowan, MD of Unique Living, specialists in high-end properties in the top destinations across the world. The idea of ‘distressed sales’ in the high-end market, he says, is a little misleading as owners just want to relocate, upgrade or just fancy change.

To a certain extent, I aggress with this philosophy. Those lucky enough to consider themselves in the top end of the property market may have enough capital in the bank, trust fund or offshore deposit to be untouched by the troubles in the stock markets, pension funds and housing market in the UK. In this case, it may be possible for them to be able to sell at the moment for a lower price than six months ago, without being a ‘distressed’ seller, but I think solid figures backed by research are likely to find that this group represents only a tiny proportion of the market.

But the point really is that now is a good time to buy, if you are able to do so comfortably. Reality dictates that the people who are able to buy comfortably at the moment are the ones who are not looking for extensive finance for their purchase, given the reluctance of the banks to lend at present. Therefore, most of the movement in the property market overseas in the current climate is likely to be at the top end.

There is also a good point to be made for the rest of us who can’t afford to buy without the aid of a bank. Should you be able to get approval on a mortgage deal for an overseas property – especially if it is something you are buying for your own personal/lifestyle use – you could be in a great position to take advantage of the ‘distress’ of developers and estates agents.

Like most people, there is something about pressuring a private seller to sell their property at a greatly reduced price that I would find difficult, or even a little distressing. However, I’m sure that some people would take a certain degree of pleasure in the discomfort of an estate agent forced to accept an offer well below what they were hoping to sell for.

Developers can be an even better source of discounts and perks if you are interested in buying at the moment. Furniture packs, flooring, white goods, TVs, air conditioning, sun loungers, swimming pools, the list of extras that can be added onto new properties is almost endless, and developers used to be able to charge extra for nearly all of them. Now, you can negotiate on all sorts of different optional extras to be included in the purchase price, as well as trying to get the best possible price from the outset.

It is a bit against traditional British values of reserve to haggle and make cheeky offers, but in much the same way that UK developers have to be open buyers’ offers; developers in some of the overseas property hotspots are unlikely to dismiss many buyers out of hand. If you do feel confident enough to make an offer to a developer, you are likely to find them receptive to the fact that you want to buy. If you can show that you are serious about wanting to buy on their development, and can show that you have the ability to fund the purchase, you will find negotiation very possible.

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