I have been surfing the internet looking at property advice available online. There is lots of it. ‘Quick road to financial freedom’, ‘How to get 20% discount off properties’, ‘Start a property portfolio no money down’, ‘Get Rich quick’.
I would not go as far as to say these headlines are a scam, but they are very misleading and designed to draw you in. If you are going to buy property you need a deposit, stamp duty and legal fees. If you are not putting any money down your mortgage company are most probably being misled by someone.
In purchasing a property, the higher the risk, the greater the opportunity to get a deal. I do not believe in taking risks that you cannot totally quantify and understand in financial terms. When you are told you can get a 20% discount on property, you should ask where the starting point was, how was that arrived at and why you are getting a discount. If the property is valued at market value, it would have sold. That is why it is called ‘Market Value’. If it is overpriced, then you are not getting a discount when it comes back down to market value.
In my experience, talking in terms of a good price is more realistic than talking discounts. A house that is in poor condition, where others cannot see through the work required to the property’s true potential, may be purchased at a good price. Of course, there is a risk that the work required will be more costly than expected, taking away the benefit of the good price. Understand that cost, and be thorough, to minimise the risk.
These headlines are created to get your attention and lure you in. The companies and individuals will make money off you, either directly for courses and advice, or more commonly indirectly through introduction fees from people they recommend such as solicitors and mortgage brokers.