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Best way to get 'under market value'

Discussion in 'General Property Chat' started by Seal, 5th May, 2016.

  1. Seal

    Seal Well-Known Member

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    What strategies and ways have you got places under market value?
    Eg making sure you know a suburb really really well?

    Happy for lots of suggestions.
     
  2. datto

    datto Well-Known Member

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    Somehow appeal to their emotions.

    Maybe something like " I'm a struggling first home buyer and I really need this property for my kid's sake"

    Failing that, try "Geez you're looking great, do you work out?"

    Now, if that fails just direct the agent's attention to something behind them and while their back is turned to you, run out the door and try another agent.
     
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  3. Leo2413

    Leo2413 Well-Known Member Premium Member

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    From personal experience this is what has worked for me:

    1. Try to buy in the 'buyer advantageous' part of the state cycle.
    2. Know the target suburb values very well.
    3. Build relationships with agents in the area. Let them know you are ready to buy a couple of deals if the price is right, and can also be a quick sale for them.
    4. DD on the vendor as much as possible to find out motives to sell.
    5. If you can sell your 'proposition' to the agent well, often they will sell it to the vendor.
    6. Aggressive, low ball offers (but not too ridiculous).
    7. Find many potential deals and go after them emotionless until you close a deal.
     
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  4. Perthguy

    Perthguy Well-Known Member

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    Technically, the price you pay for a property is market value ;)

    But I know what you mean. I find the houses that no one else wants to buy but I see the potential. I paid over market for my last property but still nearly $100k less than original ask.

    Q: How do you get $100k off the price of a house?
    A: In a falling market, just wait :p
     
  5. Johnny Cashflow

    Johnny Cashflow Well-Known Member

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    If there was a "way" everyone would be doing it
     
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  6. Blueskies

    Blueskies Well-Known Member

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    Agree with this. My feeling is that 'typical' properties in areas with reasonable sales volume will tend to behave as a pretty efficient markets, and it is hard to secure a genuine discount to fair value. It is the ones where you can see the potential that the majority miss.
     
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  7. sash

    sash Well-Known Member

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    How about...hey buddy have you spare house? ;)

    or better still "homeless" will work for a house.....
     
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  8. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Find properties that failed to get any bids at auction.
     
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  9. mr500

    mr500 Member

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    I tend to watch houses that are way overpriced (usually cause the owner over capitalised) come down, then down, then down. Then make a rather rude low ball offer. If accepted, all good. If not, move on.
     
  10. Dan Donoghue

    Dan Donoghue Well-Known Member

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    Maybe try this?

    "I'm buying it to use as a meth house, give me a discount and I will cut you in for 10%"
     
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  11. Chilliblue

    Chilliblue Well-Known Member

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    Undervalued properties are generally those that have some potential that no one else has seen, could not be bothered with or did not get to them in time.

    Sometimes they can overpriced and sit on the market, other times they will not have made it to the market.
     
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  12. Jerry O

    Jerry O Well-Known Member Premium Member

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    Always come in with a proposition. Do your research first then find out how much do think the property is worth for you. Its obviously different from what the vendors think so explain why you are giving this offer, what will benefit them if they accepted the offer (quick settlement?) etc etc.
    i always find out the reason for selling first then find a common ground to negotiate. Always find a win-win situation.

    At then end of the day, the price a property is sold for "becomes the market value."
     
    Last edited: 7th May, 2016
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  13. hammer

    hammer Well-Known Member

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    Know your target area really, really REALLY well. Once you know a place backwards the opportunities stand out like neon lights.

    This part of it I can totally vouch for. Unfortunately that's only half the battle.

    You'll still need negotiation skills and be prepared to take a few failures before you succeed....
     
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  14. Chilliblue

    Chilliblue Well-Known Member

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    Not always true as a valuer or bank will discard distressed sales and the like if they are not in line with the general market.
     
  15. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Agree @hammer , This can make a huuuge difference. Personally, I don't think many investors spend any real time and effort in the negotiation skills/tactics area.
     
  16. albanga

    albanga Well-Known Member

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    I have to agree that market value is what someone pays for a property.

    Think about it like this, if you pay 400k and believe it is "under market value" and then list it 30 days after settlement. What do you think someone will pay for it? You believe someone will offer 500k?? Ofcourse they won't.

    I personally believe the term under market value is when a properties potential is not realised and by making some adjustments you reveal its true potential and market value.
     
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  17. Leo2413

    Leo2413 Well-Known Member Premium Member

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    I don't believe that what someone pays is always the market value at all.

    The last place I bought when compared to similar properties.. I should have paid 70k more but I managed to get it for UMV simply because I was in the right place, right time, right vendor and some aggressive negotiation and it worked. I believe if it was on the market for another 2-3 weeks it would have sold for more.

    I don't believe houses always sell for what they are worth. There are times of the year ppl are away so don't buy, quite a few agents are incompetent and get a worse than expected result for their client, vendors themselves have a myriad of emotional reasons why sometimes they are willing to sell faster and/or off market and settle for less than they could otherwise get.

    A friend of mine refused to have private appointments during the week because it spoils his 'peaceful time' and only lets them come to inspect on Saturday. Also he refuses to listen to the agent and go to auction (which is the best thing to do in his case for best price) and wants to accept a for sale amount, even saying he knows he will get lower this way but, and I quote "want to get it over with already".
     
    Last edited: 6th May, 2016
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  18. Ardi

    Ardi Well-Known Member

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    Try filtering on RE.com the oldest listing first. Start lowballing!
     
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  19. Foxdan

    Foxdan Well-Known Member

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    I look for the properties on real estate websites that have poor quality photos as a starting point. I usually flick straight past the ones with great professional photography as these attract emotional owner occupiers.
    Then start looking at time on the market. Our last two were overpriced and on the market too long so they slid down the classified pages. The prices had been reduced but because they were on page 10, most people didn't see them. They both needed minor renos to bathrooms and kitchens which turns off a lot of people including investors but are easy to organize.

    Then narrow down the options to those properties that might take a realistic low ball due to circumstance and see what comes back. often an owner needs to wrap up a sale quickly to pay for another property they have bought.
     
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  20. albanga

    albanga Well-Known Member

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    @Leo2413 for once we will just have to agree to disagree.
    But I still love ya work ;)
     
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