Should Property Developers Hire Agents to Find the Best Deals?

Development Finance

One of the first things you learn when you become a property developer is the importance of being at the front of the queue for prime plots or pieces of land. After all, this represents the very foundation of becoming a successful property developer: beating others to the punch where high-potential build units are concerned.

What’s discovered quickly by newcomers to property developments is that there are countless different options available for tracking down land and properties. You can view listings, head to specialist auctions, speak with commercial state agents, and so on. Play your cards right, and with a little luck (i.e., the right place at the right time) thrown into the mix, you could score yourself something seriously profitable.

But when it comes to the best of the sources available, opinions differ from one developer to the next. Many professionals within the sector (established and aspiring) have chosen to go with the ‘armchair’ approach and to put their faith in web portals.

There is no shortage of online resources for developers in search of profitable investment opportunities, and browsing online opens the door to a full nationwide search at the touch of a button. You can even check out what the UK’s major auction houses are planning to put under the hammer and get a head start on your due diligence.

Best of all, you can add your name to a mailing list, set a bunch of preferences, and be alerted each time something pops up that might be of interest to you, all with no effort required on your part.

All is well and good, but there is a flaw to what seems like a wholly logical approach to seeking development opportunities: the fact that there are probably several thousand more developers just like you who have adopted the exact same approach. The army of armchair-dwelling developers who wait for good investment opportunities to fall (literally) into their laps is growing all the time, creating ferocious competition for those who adopt this approach.

Missing out on the best deals?

Even if you are happy to contend with this kind of competition, there is another huge issue with this particular approach. If there is one important lesson to learn about property developments, it is this:

Some (if not most) of the most lucrative deals available are never listed or marketed online.

The best deals of all have a tendency to be completely ‘off-market’ in nature, meaning you will never even catch sight of them by staying glued to your computer. It is not that these plots and properties are not put up for sale or that numerous potential buyers may find themselves bidding against one another to seal the deal.

Instead, it is simply a case of established commercial estate agents being right at the front of the queue, when and where the most enticing deals pop up. The owner of the property or plot being sold puts together a description of what is on offer; they send this to the commercial agents on their mailing lists, and these agents immediately contact the clients on their own books who are looking for these types of investment opportunities.

In doing so, sellers shift their lots with little to no fuss and get the best possible price for them without ever having listed them on the open market.

Of course, all the above only holds any real value if the agents a property developer hires have the right contacts in the first place. Even so, it illustrates how even the most committed approach to ‘armchair’ research as a property developer could still leave you right at the back of the queue.