Negotiating Tips?

That's a good one, because most are out there for a quick buck.

 

There are some very sharp agents out there and these are the ones you source to sell your properties.

The agents that want to turn over stock, are lazy, they don't want to work hard at achieve the best price for their vendor are the agents that I like working with.

MTR

 

Of course. I think you can tell this by the ones that advertise "Sold in 1 day!"

You have to ask, did you really reach all the potential buyers having it listed for only 1 day?

 

We have an agent that advertises how much over the asking price he gets... I would never use him to sell my house but I do enjoy going to his listings for purchase as they go for about 5-10% below where I believe they should be.

 

The sad part is... that would attract some potential sellers! I know of someone who was thrilled her house was sold in three days for the price the agent quoted (needless to say someone got a good buy)

 

Hi Mick,

So for a normal property inspection, would that be costly to arrange for a Pest Inspection before making an offer ? (Typically it is ~$275-$350) per report.

As for the the property valuation yes, it can be done free using OnTheHouse.com.au or RPData Premium website subscription.

PS: Strata report for an apartment unit cost me about $300-350 to get, this is good to know how much is the amount of sinking fund available on the complex.

By doing those report if we still don't get theproperty, then it is at least $300 lost for the pest control report.

 

If your agent has a solid grasp on values then who cares how short or long it takes.

I have witnessed many great offers come in the first few days of advertising which the owner has knocked back with the attitude of 'if that offer came in so early there must be better out there'. Quite often that offer was the best.

 

Seen this too, the hardest thing for a REA is when they get a great offer on day 1 (not an amazing stupid offer like 1M for a 500k property) Is to convince the vendor it is a great offer and they should accept it. Seen it before properties sell for 40-50k less (5-10%) less than the highest offer as they wanted more.

 

I am currently interested in a property that started off at $710,000 six months ago and has come down to offers over $650,000 - my gut feeling is its worth a little less - however it has been on the market so long it has become stale. Agents are advertising it as new on market and no For Sale sign/Open for Inspection signs when I attended open last Saturday, naughty of them.

 

cool story, relevance to thread?

 

One of my strategies:
Both me and my wife usually play "not know each other".

It start when wife interview the agent, list down all the questions to find out the main reason seller have to sell. I have to admit wife better in fishing.
Then she submit low ball, if not accepted then she put counter offer. If rejected again, then we give few days break, and I will contact the agent. Similar process apply with different list of question.

I put low ball but not exactly same number as my wife. If this strategy work, vendor will think this is market value. And vendor dont want to lose another potential buyer.

This strategy not always work, especially in uptrend market but we enjoyed the process.
We bought $400k, 3br house 2010. While similar house sold $450k, in 7 months bank revalue at $460k

Same strategy help us purchase $320k, 2 br unit 2012. While next door sold $350k same condition.

 

Also what I did "building relationship" :
I have build relationship with REA in North Brisbane, start from March 2011 when we purchase 3BR house. On Christmas we send her Christmas card and bucket of flower (Cost < $50). Sometimes once every 4-5 months, I give her a call and ask how are you and how's the market. Even we know the market looks like..

Then on July 2012 we draw equity and call REA to check any stock available. First she offer what available on the market, but she did mentioned have new stock ready to publish in domain/realestate.com.au. Even though we didn't purchase via her agency (due to location - better suburb), I still maintain to send her Christmas card and gift card this time (Cost < $50).

Mid 2013 when Sydney busy, and Brissy still buyer market. She contacted me discuss about Sydney property market. I asked what her market looks like, and go through her listing stock. She offer new stock FIRST and what available on the market after that. She even drive me around when I visit the property, no need to rent car. We able to secure one in this time..

I spend around $100 - $200 (Christmas card, gift card, flower, phone call). For me personally its nothing compare the return

I keep my friend close to me, but keep my enemy (REA) closer..

 

Being sold on one day doesn't automatically mean the agent did to get the highest possible price. In a hot market, the highest price can be achieved that fast.
I was interested in a property for a client last week, got a heads up before it hit the market, couldn't get onto my client to discuss, the next day it hit the market and sold for a very healthy price, over asking price that day. I was given an opportunity to give an offer too, but it had already hit. Price which was above what I determined it was worth.
I will keep working for my client to buy through one of the agents who don't achieve as high a price as this particular agent does.

I love an out of area agent for price savings and outdated homes with great bones in an area where everyone goes nuts for modern looking properties,

 

This is a good strategy if the agent does not know you and your wife. I think that I might have to engage someone to inspect a house and make an offer close to ours. Just trying to convince the vendor that this is a market value. His head is currently in clouds and he asks a ridiculous price.

Has anyone else use this strategy successfully?

 

I've done it on Ebay once, listings with 'Best Offer'. You get 3 offers, all got rejected with 1 account, started just above the 3rd offer with another account, accepted.
Should be a similar theory with houses I guess

 

Has anyone ever dealt directly with the Sellers, even though they have a RE agent? To get into the nitty gritty and understand what the sellers want, as you are getting second hand info of the RE agent.

I've been watching a few negotiating videos specifically on Realestate and a couple have mentioned this. I've even had a seller contact me when i was buying, who was a very smart and smooth negotiatior - but i didn't buy. But still it was out of the norm, but he knew what he was doing even though on the other side of the fence.

 

I have a method I've used in the past to get around agents who dont want to play the game and present offers etc..

Legally you can write up your own offers/ purchase contracts. You can buy blank one's from the bigger newsagents and/or from the relevant state real estate institute's. (I havent looked of late, also maybe available online)

If an REA is not forth coming and/or refuses to write up your offer simply bring out your own and commence filling it out in front of them, stating you'l present your own and you're sure the vendor will be all ears when they find out their REA working for them is not doing their job.

Hope this helps.

 

@Rixter yes thanks. I was referring 'talking' directly with the sellers to get a full understanding of what they want. Too many times i ask RE agent what terms they want, why are they selling etc etc and they either have no clue - or little of a clue. which doesn't help me or them get the sale and negotiate a deal in my favour

 

Yep, you can do that too, thus why I mentioned REA who dont want to play the game.
Go direct to vendor and get it straight from the horses mouth.

 

To me this is negotiating 101 basics
But i just wanted to hear peoples opinion.

In todays qld market.

Offers mid 300s. I offered 325k. Rejected as expected as just on the market.
No counter offer. I asked if any conditions suit
They said not fussed about conditions
My max is 330k.

My approach
Well it appears im not in the ball park. And there is no counter. So ill just move on and it it doesnt move they may contact me in a few weeks. As im not even close

My two best investment friends approach
Well. Tmnt is getting his ego invovled and being stubborn and doesnt want to chase the offer. Should be putting in an offer of 320 immediately and hope for the best. No pain no gain




What do fellow investors think?