Cold call from RAE about buying my investment property

Discussion in 'The Buying & Selling Process' started by Winadil, 1st Feb, 2020.

Join Australia's most dynamic and respected property investment community
  1. Winadil

    Winadil New Member

    Joined:
    1st Feb, 2020
    Posts:
    4
    Location:
    Toowoomba
    As the title suggested I received a phone call from a well known local REA about if I was looking to sell my investment property as he has a buyer looking for something like my property for a quick sale.
    While we had not thought about selling at the moment, we are not off the idea that IF the right price came along we would sell.
    For a few years, the house was major issues with maintenance and bad property manager but things have finally turned the corner with repairs and a company with decent property managers.
    The property is currently being rented out and is positively geared/break even, so it is not a burden for us financially too much
    The local market has been poor at best and as we had bought at near peak time and the market the REA mentioned at the current price we might break even/small lost after all the REA fees etc.
    I spoke to another REA from the company that is managing my property and he suggested he goes have a look at the property and give his option on what it would be worth in the current market as well as outlook for the area

    I am in 2 minds about what to do.
    there are a few pro and cons

    PROs
    Could invest money form the sale fo the property in a Managed Fund and potentially make better returns over 5-15 years
    could get a decent price at the current market value
    quick sale
    would free up a lot of liquid cash
    potentially pay off all debts
    get out of the market that is barely doing much
    Tax
    Less worrying about the house itself and random issues that seem to pop up.

    Cons
    Would barely break even
    Market Could turn and then lose out on a hot market place
    Not in financial stress, no need to sell
    more potential problems with the property down the track and cost more money
    tying down a fair bit of cash that could be spent elsewhere
    The fee seems quite high

    I spoke to the cold caller REA and it mentioned that if it fell through that it is a no sale/no fee

    The REA then sent me a Sales agency agreement and I told him that would look over it and get back to him after I get the valuation on my house.
    I did give it a quick browse and notice that his fees were 3.85%+GST which seem very high when compared to what I found on the web about the usual rates for RAE
    also he mentioned that he cant get an offer from the potential buyer unless I sign the agreement? is that true or some kind of marketing ploy just to give me their business?
    While I am in no rush I don't really want to stuff any of the parties involved around, If it turns out to be a bust then so be it but better everyone know in a week then dragging on for a month

    As this is my first time being in this position of selling I really don't know the in's and out's of the property market too well.
    I went on the web and looked at most of the regular Australia property forums and notice that the cold call itself is usually a marketing ploy just to drum up business and the other REA mentioned this as well but it seems legitimate that he does have someone looking to buy.

    As we moved away in May 2014 for work my understanding is there could be CGT issues after May 2020 if we do sell or was I reading the ATO website wrong?

    any input or advice would be greatly appreciated as I don't really want to get played
     
  2. TMNT

    TMNT Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    5,573
    Location:
    Melbourne
    What area is it?
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    24,332
    Location:
    Sydney or NSW or Australia
    The agent is on a fishing expedition to get (your) business on their books.

    You say that you'd barely break even if you sold and it's neutrally geared, there's no pressure to list unless you want to go to market. It's probably making money while you sleep as interest rates have fallen substantially - you might consider refinancing instead.

    If you sell later, you'll have to pay tax, that's only if you make a profit and by the sounds of it you won't or it will be an insignificant amount (it's at half of your marginal rate). There are worse things than making a profit or paying CGT.

    The comms rate would appear high unless it was a very cheap property or in a difficult location.

    If you decide that you will sell through this agent, why would you give them any more than one week's agency agreement as they already have a buyer lined up?

    Have they indicated a price?

    Buyers aren't exclusive to a single agent unless the buyer doesn't use technology.

    Is that what you're expecting? What price have other agent's and your own research indicated?
     
    Last edited: 1st Feb, 2020
    Dan Wood, Terry_w and Marg4000 like this.
  4. Marg4000

    Marg4000 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,670
    Location:
    Qld
    A common ploy.
    Sounds like a local agent is just fishing for listings.
    Don’t sign anything unless you are certain you want to sell, probably at a reduced price.
    Once the agent gets the listing, the “interested buyer” usually disappears, and you will be pressured to drop the price.

    Rule #1. Never believe anything a person says when he wants something from you - your listing.
    Unless you have concrete evidence this is true, it almost certainly isn’t.

    If you do decide to sell, list with a reliable local agent of YOUR choosing. Not just the one who says they can get the highest price, or the one who says they have a keen buyer.

    Once the listing is on the internet, all interested buyers will see it.
     
    Archaon, Dan Wood, TMNT and 1 other person like this.
  5. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    7,912
    Location:
    Australia
    Sure they have someone looking to buy. But that doesnt mean that someone is looking to buy your property. This is why agents collect contact numbers at open homes.
     
  6. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    12,466
    Location:
    Brisbane
    I agree with @Marg (and others) but even if you wanted to sell - why choose the agent charging such a high commission?
     
  7. willair

    willair Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    6,266
    Location:
    ..Hong Kong Garden..HK..
    Quote..
    I spoke to the cold caller REA and it mentioned that if it fell through that it is a no sale/no fee

    I get a few calls like this with a varying degree of regularity from the usual suspects every now and again ,and in the mail ..
    Same as what you have in front of you ,and as more experienced then me '' Above'' have said this is a normal ''TRICK'' agent's are taught from the start ..

    Picture this ,the principal standing in front of the new Sales agent,the new hopeful who maybe not even last six months or maybe one year if She-He is very lucky..

    The principal has a long list of name's,and this is where the number's game come's into the game..

    The new hopeful rings every number saying the same from the print-out in front of them ..

    The principal just keeps pushing the sales person,next call--next call-- as the principal will listen to every call till they get that one person who says maybe just maybe depending on the vendors outlook..

    Next thing,the leased euro car in parked in your drive way and 2 people are waiting with their foot in the door you sign the sales paperwork the mystery person who wanted your property goes like cold water on a white hot bbq plate and after six months when you walk away you get the bills for ''SFA''..

    The way i work these people is quite simple,just tell them bring the cash contract around with a 45 business days wiwo settlement period and depending on the contract you have in front of you after your legal team has checked the contract you sign or rip it up in their face..

    I may appear to be blunt-rude -ect but in all my life from 1983 when i started investing in R-E WITH 4K in my blue collar work clothes back pocket not one flash in pan RE has ever turned up with a cash wiwo contract..
    good luck..imho..
     
    Last edited: 1st Feb, 2020
    Archaon, wylie and Marg4000 like this.