My Property Investment Journey - Week by Week

Absolutely. In the real estate industry, its often the seller and their representing agent that bend the rules the most when it comes to 'unethical behavior' and the onus is usually placed on the buyer if they are somehow affected by these widely accepted practices. Things like doctored images on sale ads, dodgy renos to cover up structural/termite damage, cheap paint jobs that peel off after 3 months of settlement, under quoting practices and silent auction tactics designed to attract several buyers to enter into a bidding war etc.

It is up to the seller and their agent to sell the property with the most favorable conditions/price for themselves and it is the responsibility for the buyer and in this case, myself as the buyers agent to negotiate the best outcome for my client also.

Of course, everyone is entitled to their own opinion on what is 'ethically acceptable', and fortunately I do not work based on opinion but the fact that a real estate transaction can only take place when two parties mutually agree to a set of conditions, including negotiations of the final sale price.

In this particular case (and in the case of many of my deals), the sale price was not the priority for the seller, but rather a set of flexible conditions where they could walk away from the property as easily as possible based on their personal circumstances.

That said, my clients including Jose will confirm that if there is a need to negotiate a further price reduction on a building and pest where significant problems have been uncovered, I adopt a lengthy approach outlining all the problems, an estimated quote and an option for the seller to rectify all problems themselves prior to settlement - not a take it or leave it scenario with an unsubstantiated discount which never works anyway

 

Just as there are rules in war (Geneva convention) there are rules in life and investing.
It is not a matter of being soft. If your moral compass encourages you to engage in such acts then best of luck to you pal.

 

Sure a sale is made via a willing buyer and seller. However leveraging the vendor while the property has been under contract for 5-10 days already as a premeditated measure to obtain further price discount is not best practice. If that is how you obtain a favourable outcome for your clients then you need to address your business practices.
I am not saying you have done so, but your post seems to indicate that you are in favour of pushing as hard as possible under the b&p clause.
You will find that if this is your modus operandi (which another member raised as a good point to me) that vendors agents will catch on and be hesitant to deal with you as a BA due to a reputation of exploiting vendors post contract being signed.

Sure vendor has the right to reject the b&p issues and claim made, however if the vendor has sat the property on market, bought something else, screened the buyer, negotiated over a period of time, then signed contract, then 2-3 other potential buyers are told 'sorry property is under contract', it goes cold, then just a further 10 days to go buy and at that point the buyer to jam the vendor with a 5% discount on PP.
the buyer is less of a 'willing' party at this point as the circumstances are now in the favour of the buyer, the seller may be disadvantaged by having to crash the contract and go back to market again, all because a BA plays a game of asking for exorbitant discounts at B&P stage.
if the defects are genuine fine, but I would be interested to see what the defect list was on this place. This house is as plain jane as they come. For $15.5k there must have been some termites or serious structural issues on this joint mate.

Stand by your rights to negotiate as hard as you think you should, but if your advice time and time again is to bomb the vendor at b&p stage then your reputation will catch up with you.

 

I agree with this, but in this case, both the parties had already agreed on the price.

Were any "significant problems" identified? The renos by the OP don't suggest any repairs were required other than what was obvious on an uneducated, visual inspection.

 

This made me laugh! As someone who already went through one war I can tell you that there are no rules in war. Geneva Convention means S*it. If it were true then Bush, Clinton and few other American presidents (along with French and British) would be locked long time ago with other dictators. Bush is perfect example. Geneva convention say they dont support invasion of Iraq... did he listen to them? And who profited most from it? Besides USA never signed the Geneva Convention so i guess none of that nonsense applies to them...

Sadly war is business now days. and that is how it will stay as it is run by big corporations. As @Pentanol said in earlier posts. In business you think with calculator and in life with heart. could not have put it better.

Sorry going off track here...

Well done @Jose Eduardo Slompo have been following your thread from first week. . I too managed to find a great property from a seller that inherited the property and just wanted it sold quickly. If I didn't buy it then 3 other buyers with slightly lower offers than me would have.

@Greyghost I do agree that there should be ethical purchases and sadly none of that will happen until the 1% start doing something about it and being ethical (lead by example). They are the 1% because they didn't follow all the rules and worked the legal (and illegal) system to their advantage. It all depends what you want in life. Bill Gates stole and lied to get to where he is. But now he can spend all that money on worth causes... It amazes me that he "gives away" so much money yet every year he is wealthier and wealthier....must be karma....

Ahhh Capitalism....

 

Tks @Excalibur1, nice post! And tks for following my thread all the way from the start, hopefully it will get better and better as the years go by!

 

I clearly spend too much when I renovate. You added so much value for such a small outlay @Jose Eduardo Slompo. Great work!

 

I truly hope so, @Pat!

Where will your next investment be? I'm considering Brisbane or Melbourne, which one would you choose between the two?

 

Did I miss this answer (and if so then apologies), but what happened with approval for the garage conversion, and what did you do to confirm it? i.e. just a call to the council, or...?

Looks like you are enjoying your journey, @Jose Eduardo Slompo - best of luck to you.

 

Definitely enjoying it, @hobo! Nope, I didn't need approval.

 

For some reason I’m just not into Brisbane. No basis for this, I think it’s only that I don’t know it very well and have been concerned by the apartment over supply story. We love renovating, but doing an interstate Reno was certainly challenging as we did most of it ourselves. So we’d love a little ugly duckling 1960s 2BR apartment in Sydney somewhere along the new Norwest rail link so that we can work on it after work and on weekends. Some of the suburbs further out have not boomed like much of Sydney. But we’ve hit a serviceability wall for now so I’ll do some value adding on our Hobart properties.

But I’d choose Melb over Brisbane.

 

@Pat, definitely sounds like a great plan, there's plenty of opportunities in Sydney for those willing to go through the whole renovation process. The serviceability wall is a bummer, APRA is getting its way... :/

You don't need to add any value to your Hobart properties, the market over there is already adding insane value by itself!

But yeah, buying an established house in Melbourne or Brisbane is the great question in my head right now. Would love to hear what other members of the forum think...

 

This is actually true.

Simon has helped me with my recent purchase and we tried to negotiate a reduction due to some repairs that needed to be done.

HOWEVER, at the end of the day it is the SELLERS choice to AGREE.

In my case the seller disagreed on the reduction and yet the contract still went on.

 

@Jose Eduardo Slompo Let me know if you find a good BA in Melb. I am on the lookout for my next property as well.

 

@Jimmy_05, if I decide to buy in Melbourne I'll probably use Metropole or Empower Wealth. They're expensive, I know, but they've both been around for ages, I like their thinking and strategy and there's plenty of success stories.

 

And that's exactly what I'll be looking for in my next purchase

Tks @Rolf Latham

 

Thanks for the insights over the last 10 pages and congratulations on the purchase

 

Glad you found it all useful, @househuntn, tks!

 

How's the property going @Jose Eduardo Slompo?