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Shame on me! Shame on me! I’ve been fooled. Despite my very best and determined efforts and ‘street smarts’, I’ve been hoodwinked. I hang my head low in shame.
Damn the London property agents!
After the fiasco with 325 Borough High Street (see earlier blog), I wonder if my immune system against property-agent-developer-bullshit was compromised and therefore I was more susceptible to making foolhardy decisions. Or, perhaps it was the pressure of seeing the property market rocket ahead and the fear of incurring an opportunity cost for not proceeding rapidly enough with another property that made me listen/accept/digest the bullshit from the next property agent. Regardless, I blame only myself for not recognising the deft high-pressure sales tactic used by a Daniel Cobb (London Bridge branch) agent.
When I’d received this email from the agent on July 11, 2014, alarm bells should have gone off:
“An offer has come in from a bulk buyer to purchase all remaining units in the XXXXX. I understand from your previous correspondence that you are returning to HK today/tonight however the developer’s would like to know if you would like to pursue unit XXX asap.”
As I was about to hop onto a 12+ hour flight (read: no internet access), I had to make a very quick decision. And so, I’d advised my husband that he should proceed with the purchase of Flat XXX before the “bulk buyer” snaps it up.
It later transpired (according to the same agent) that the developer rejected the offer to purchase all remaining units from this bulk buyer. Unfortunately, we discovered this only after the contract was signed. I now wonder (and this is only a supposition) whether or not there was ever a real bulk buyer. Have we been hoodwinked into making a significant financial decision based on smoke and mirrors?
The other major disappointment experienced was that I was led to believe, by the very same property agent who pressurised me to make an immediate decision, was that once the newly built apartments are completed, there would be an uptick in property value. This is because (rough quote here) most buyers want to see the completed product to examine the fixtures and fittings. Furthermore, a completed product has certainty whereas an off-plan product has more inherent risks (such as delays in completion date, construction problems, etc) and therefore an off-plan is usually priced at a discount to reflect the higher risks.
So at the completion phase (Dec 2014 – Feb2015 …. due to unexpected construction delays), not only was I incredibly surprised to find out that of the 19 flats in the building, only 6 flats (including ours) have been sold. And, instead of the price uptick linked to product completion, there was a drop of 5-11% in the asking price of the remaining units! And this is during a period when prices in London are still increasing (albeit a slower growth rate …. but a growth rate nonetheless)!
Again, I have to ask myself whether or not there was ever a real bulk-buyer for the remaining units. If there was indeed one, then I could only surmise that the developers (Northstar 2000 & Acorn New Homes) must be kicking themselves dreadfully because they would have sold the remaining 13 units at a much higher price. Instead, the remaining units are now on the market at a steep discount.
The only conclusion that I could reach that made sense to me is that the apartments were originally overpriced and thus did not sell well and as a consequence, the Daniel Cobb agent took advantage of my flight to Hong Kong to pressurised me to make a quick decision.
Shame on me for not recognising the high-pressure tactic!
In short, as bitter as the above pill is to swallow, I confess that I’m still at peace with completing the property purchase. (This is an owner-occupied purchase and not an investment purchase. As such, the no-rent-to-pay offsets some of the bitterness.) Regrets are terrible and I didn’t want the enjoyment of the new flat to be tarnished by what transpired previously. I’ve therefore filed my experiences above as “lessons learned” and hoped that in the future, I will be a little smarter and less likely to be hoodwinked by (in my opinion) untrustworthy sales agents. And that by the time my husband and I decide to move on and sell the property, we would not be in negative equity.