Join Australia's most dynamic and respected property investment community

Negotiation tactics - what agents say

Discussion in 'The Buying & Selling Process' started by Investing101, 27th Oct, 2015.

Tags:
  1. Investing101

    Investing101 Well-Known Member

    Joined:
    18th Oct, 2015
    Posts:
    60
    Location:
    Over the rainbow
    After making an offer on a property the agent has tried directing my attention to lessor quality home, suggesting the offer I'm making is more suited to it.. I'm looking for a good response to this.

    Things ive heard multiple times: "Is that your first or final offer?" and "I'm sorry but this house is just not going to sell for that". This happens before the offer is even taken to the seller. And some would find themselves feeling like they should up there offer at this point when you are only negotiating with yourself.

    Also had them tell me they had multiple offers on a place and what they were. Just ignored this, sure enough those offers seemed to struggle to get all the required signatures on them...sure.
     
  2. Investing101

    Investing101 Well-Known Member

    Joined:
    18th Oct, 2015
    Posts:
    60
    Location:
    Over the rainbow
    Sorry agents if i'm showing people where you hide the bunny in the hat.
     
    samiam and Zine like this.
  3. sandyfeet

    sandyfeet Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    130
    Location:
    South Coast NSW
    Ask that the offer be presented to the vendor and keep looking,

    If your offer is reasonable, maybe suggest the other properties that he believes 'fit your offer' seem overpriced :p
     
    Esh likes this.
  4. Natedog

    Natedog Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    273
    Location:
    Melbourne
    Make your offer conditional on it being presented and accepted within a set timeframe. Usually gets the agent moving. It could be 4 hours or 24 hours, whatever you stipulate.
     
    Kangaroo likes this.
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,143
    Location:
    Canberra and Sydney
    They either accept your offer - or provide a counteroffer and kickstart negotiations. Anything else is just stuffing around.

    Cheers

    Jamie
     
    S.T, Esh, Bryan Loughnan and 2 others like this.
  6. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,578
    Location:
    Australia
    Copy in the vendors solicitor of the offer
     
  7. pugstar205

    pugstar205 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    109
    Location:
    Brisbane
    The question to ask is: "are there currently any contracts on this property?" It's a yes or no answer. If no, then everything else the agent says is just hot air.

    My standard approach is polite but firm: "my offer is based on my own market research and investment objectives. It is an offer to buy the property today. If the seller would like to see my offer on a contract, please email one to me".
     
    Bryan Loughnan, Kangaroo and Ardi like this.
  8. Investing101

    Investing101 Well-Known Member

    Joined:
    18th Oct, 2015
    Posts:
    60
    Location:
    Over the rainbow
    Asking if there are any offers or even contracts is flawed because the agent could still be lying. Or stretching the truth a loooong way. He may have drafted a contract for his mother for $1, sellers wont take it but now he is not lying and can tell you there is with a straight face.
     
  9. Investing101

    Investing101 Well-Known Member

    Joined:
    18th Oct, 2015
    Posts:
    60
    Location:
    Over the rainbow
    while all this info gives better perspective thanks. I think i over thought this and just replied pretty much with "not interested"
     
  10. pugstar205

    pugstar205 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    109
    Location:
    Brisbane
    I don't think an agent would outright lie about other offers or contracts. They want an offer out of you after all. They probably don't want to take low offers to the seller having promised them the moon and stars to get the listing. What an agent will likely do in my experience is exaggerate the level of interest by the market - 'we're getting a high volume of enquiries'.
     
  11. Bryan Loughnan

    Bryan Loughnan Well-Known Member

    Joined:
    20th Jul, 2015
    Posts:
    130
    Location:
    Brisbane
    Negotiating a property purchase is very complex and varies from property to property and agent to agent. The tatics you use will vary depending on what the agent and most importantly, will vary depending on the property - or more specifically - the vendors expectations/motivation. The more you know about the vendor, the better position you are in. Sometimes playing hard ball and providing a sunset clause is your best option - sometimes it's not. There are certainly times giving a vendor time will work in your favour. Knowing an agent and how they operate will help as well. Some agents 'buy listings' - (tell a vendor what they want to hear - that they will get them more for their property than another agent, but realistically knowing it will be negotiated down ie "I'll get you $400k for this property" when in actual fact it is only worth $380k and they know it and are allowing for negotiation). On the flip side, there are agents who 'underquote' - list the same property (worth $380k) for say Offers Over $365k - just to generate a lot of interest and attempt to get a mini auction happening. The more negotiations you do with agents the more you will learn.
     
    samiam, Leo2413 and Investing101 like this.
  12. Investing101

    Investing101 Well-Known Member

    Joined:
    18th Oct, 2015
    Posts:
    60
    Location:
    Over the rainbow
    well said, too true
     
  13. CU@THETOP

    CU@THETOP Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    227
    Location:
    Brisbane
    Agent I need you to submit my offer. If you don't I will have it submitted by another agent because if you will not be the effective cause of sale and my offer is ultimately accepted then my solicitor tells me that even with an exclusive agency you will not be entitled to a commission due to your breach of fiduciary duty in not presenting all offers to the seller.
     
    Jkat, wylie and Perthguy like this.
  14. mja

    mja Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    175
    Location:
    Sydney
    Do you talk to agents much? Do they ever call you proactively? Might be the market you're investing in is hot and no agent ever proactively calls (or returns phone calls). Develop rapport with agents. For example, I've been chatting on and off with one agent in regional NSW for a while and literally told him the other week 'Look, I'm after a property I can put a stupid offer on, if you have a vendor who's keen and wants a done deal, let me know.' I managed to secure a deal under market value without the property making it to advertising stage. BA's do this day-in-day-out. :)

    Also stress that you want your offer presented to the vendor.
     
  15. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,343
    Location:
    4/136 The Parade Norwood, South Australia
    As an agent I would have to say that I don't give a toss about the buyers own market research and sunset clauses, we usually have a good feel of what the property should achieve and anything below that with an expiry date on it is just not taken seriously. Yes we tell the vendor that there is a low ball offer but suggest that we should not take it, unless of course they actually want to give the property away.

    If the offer is within a range that the property is worth and especially the upper range or above then it's taken seriously and things move quickly from there - no sunsets required as good offers will be accepted.

    Agents encouraging vendors to take offers below market price because god forbid, they are going to expire - does not deserve to be in business.
     
    wylie and Bryan Loughnan like this.
  16. JDP1

    JDP1 Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    2,838
    Location:
    Brisbane
    And what if the offer is within range but at the very low end. And it's a rising market. Are sunsets still to be discarded?
     
  17. Rumplestiltskin

    Rumplestiltskin Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    402
    Location:
    Perth
    Not in this market though Xenia. Agents can only eat Wallpaper Salad for so long before the worms start biting.
    Let's be honest,the only tool agents have in their kitbag nowadays is telling the vendor to drop their price.
     
  18. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,343
    Location:
    4/136 The Parade Norwood, South Australia
    dropping price depends on initial price and property - we don't always recommend it. Some properties in some areas can be pushed above appraised price, it depends.
     
  19. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,343
    Location:
    4/136 The Parade Norwood, South Australia
    Most times we have an idea on what it's going to go for so if we have precedence that it will eventually sell towards the lower range then we express that to vendor - our research never other peoples. I have to say, as an agent, unless it's a cheapy property in far Northern suburbs of Adelaide that is run down, we tend to target home owners not investors. Home owner are the ones that pay top dollar that's why most marketing is written specifically for home owners. Again it depends on property. Some can ONLY be sold as investments.
     
    Perthguy likes this.
  20. Rumplestiltskin

    Rumplestiltskin Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    402
    Location:
    Perth
    Not always, just most of the time, particularly in the current market.
    I have never heard of a real estate agent that does research, this must be a relatively new development.
    The last one I saw was reading a book called "How to Hammer a For Sale Sign In For Dummies" on the front lawn of a 1st home open.