Does letterbox dropping work when looking for a PPOR in a certain area?

We are looking to buy a PPOR in Eastern Suburbs of Melbourne within 10 mins walk of a train station for school reasons. We are looking in the Glen Iris, Malvern, Malvern East, Hawthorn East, Hawthorn, Camberwell areas.

It has been a difficult process because so few of the properties that come to market meet our criteria.

We are thinking of preparing a flyer to put in letterboxes of houses in our search zone. It would just state that we are actively looking in the area and to contact us if you are considering selling your property.

Has anyone done such an exercise? How did it go? I imagine most replies would be time wasters?

 

Partly depends on whether you are willing to pay above market.

 

Imho, doing something is better than doing nothing
Calling some agents, and come to open house to talk with agents should be included.
Real estate investor training to tell you that you will get 10-30% discount by mail dropping is a dream now, I guess.

 

Do you mean what an agent would tell an owner their house is worth?

If the answer is to that question is yes, then no, we are not willing to pay that amount.

Fair market value is what we would like to pay in an ideal world. In my experience that is around 10% less than a price an agent would tell you that you can buy a property for.

One of the reasons for starting this post was too find out if people do sell their houses for less than market value in such a situation.

 

I am being rung a couple of times a week by agents with properties in our nominated areas, key is that our criteria is quite slim so nearly all the places we are offered are off the list straight away.

 

So, how would you have bought those properties? By offering more.

What the agent says they can sell it for doesn't matter. What it does sell for, does matter.

Owners who dont trust or like agents, who are clueless about property values are rare these days.

 

@Deakin5 In my experience a low yield but equally low cost strategy. Why not try?

We have done a couple of rounds of letter box drops with a reasonable response rate which has resulted in an unsuccessful offer. I don't think our negotiation skills are very good.

There's a thread with proof it can be done Anyone buy a house through a letterbox drop?

 

Yes, the negotiation part is something that I imagine would need to be treated differently in a situation where you are dealing with the owner directly as compared to negotiating via an agent. Are owners likely to be less willing to budge on price when they don't have an agent pressuring them to accept an offer?

 

The exercise will most probably work if you walk around all day dropping off the leaflets on a weekend and speak to as many home owners as you can.

But you are going to have to target the properties that appear to meet your criteria.

If you visit and speak to say 2000 homeowners, using the law of probability, you will get a result of some kind. Be it verbal abuse, a dog attack or maybe an invite to a BBQ and some grog (best to do your leaflet drop around noon on a Sunday for that one).

 

Haha, I was thinking the areas that we are looking in the people may not take that well to knocking on their front door and asking if they are considering selling their house!

Hence the idea of producing some sort of memorable flyer. One idea might be to take the mickey out of the real estate agents, letterboxes in these areas are often receiving advertising material from agents saying they have buyers who are interested in buying in your street.

You are right about targeting properties that meet our criteria, spending some time researching properties before hand is likely to save a lot of time in the long run.

 

Theres a disconnect here. Why dont you just offer enough to get those properties that are coming onto the market? If agents are calling you, it's not that hot a market.

 

Personally I think if you're not willing to pay a premium amount, you almost certainly won't have any luck.

But if you are willing to spend the time to try, I guess that's up to you. I think there's more productive ways to go about it though.

 

I take your point here, our search has taught us that if you want an A-grade property you are going to be competing with quite a few others. We have often been out-bid by buyers advocates who seem content on securing the property for their client and banking the commission.

The agents calls or emails are generally for off-market properties, over 75% of these properties are never listed. I get the feeling in quiet periods like this agents are ringing around all their potential vendor contacts and seeing if they can secure a sale at an inflated valuation.

 

Any clues on the more productive strategies?

 

why are you not willing to acknowledge the obvious here? Other people are willing to pay more than you. If these are more expensive properties, often buyers have big deposits or high incomes. The buyers agents are probably told i want that property, this is the limit.

you seem to assume everyone is overpaying but you know what its worth. But whatever is paid, is the market. If you think its only worth 10% less than what people are paying the only way you will get anything is if the market deteriorates.

 

I think you're going to have more luck building a network/relationship with the strong local real estate agents. I don't profess to know the area well but often is the case that there will be stock available off market, and the odds are the agents will have done the door knock/free sales appraisal letter drop already.

 

I am hearing where you are coming from.

I think a big issue at the moment is the lack of supply, I am told by numerous agents that they have many properties ready to be listed at the start of term three (two weeks time) with a one month campaign leading up to auction.

 

Well I have built relationships with a number of agents in the area (maybe not the right ones?). That relationship with a buyer does not seem to alter their playbook of introducing potential buyers to an off-market property at a valuation around 5-10% higher than what it is likely to be listed at if they can't find an off-market buyer. I am well aware that if its an appealing property then the likelihood is that it will sell for higher than the guide price in the end.

 

As some others have mentioned, I think the best thing to do is to become a local expert on the area or type of property you're seeking, and so you can move quickly when the right one comes up.

At the same time, getting to know the agents in the area and letting them know you are serious about potentially buying means that you might get an early heads up on something that hasn't yet hit the market yet.

 

I've often wondered this myself. The logic is that if an agent takes 2-3% of a sale, a vendor should be willing to sell to you for a 2-3% discount, therefore pocketing the exact same amount themselves, or splitting the difference with you. The real kicker is the dream of finding someone 'who never realised they wanted to sell until you approached them and is so wrapped up in your charm and hard-working ethos they can't wait to sell to you for whatever price you name'!

The reality though is more like a lot of time-wasters who, even if genuinely interested in selling, don't trust not having an agent involved and therefore second guess everything you say; receive inflated valuations from agents who want to sell their home (and warn them of the many dangers of 'dealing direct with an unscrupulous investor/developer'); and take up weeks of your time only to not-commit at the last minute.

Then again, if you're willing to go through that enough times I'm sure you'd jag a bargain eventually; just don't put a price on your time at the end of it, or you might see those savings evaporate!