Using BAs, a hindrance to low-ball strategy?

It seems like a good time to start low-balling for an IP especially on the east coast. Since I'm interstate, I always thought I'd use a BA for this purchase, that is until now. One of the touted benefits of using a BA is that they supposedly have close relationships with REAs and so have access to the best deals. On the flip side though, would these relationships make the BA more reluctant to low-ball on my behalf for fear of offending selling agents? I would appreciate your opinions on the matter.

 

How would you know what a "low-ball" offer would be? Wouldn't you be relying on your BA to advise you?

 

I wouldn't be jumping into east coast even with low balls as there is probably still some more downwards movement over there.

If I was low balling then I'd be doing it in Perth

 

As a BA for 14 years now I feel qualified to comment here
Of course we build on relationships with selling agents- it's in our best interests (and more importantly, that of our clients!) but that doesn't mean we're best buddies. Am I reluctant to assertively negotiate? Absolutely not What's the worst case scenario? The vendor says no. We're used to rejection - all part of the job And let me tell you, after doing this for so long, I haven't encountered an offended REA yet. We're just doing our job

 

Trust me, with what I had in mind, wouldn't need much local knowledge to know it's a low-ball!

Westminster, as always, your opinions are greatly appreciated. I plan for this to be a long-term investment and would like exposure to our largest city. I personally think that Sydney, and to a lesser extent Melbourne, will probably start recovering sooner and at a faster rate than Perth. I think rental demand would also be a surer bet. Having said that, I do think Perth is great value for a PPOR atm.

 

If I was contemplating to use this strategy atm in syd, I'd want it to be a numbers game.

Meaning super low balling heaps of deals . 20 to 50 deals. Trying to catch that 1 extra motivated seller.

I've used this simple approach for Brissy and for Syd pre boom and I got what I wanted.

 

I don't really agree with this. I can't see how you can properly "low-ball" without a very good knowledge of the value of the property you're offering on. Ideally, you want to know more than the seller.

Personally I think asking prices mean nearly nothing, and therefore low balling with reference to the asking price means nearly nothing as well.

 

I get that point but I think buying now is probably premature as it really hasn't been dropping that long in term of time. To generally get the most responsive low balls there needs to be more pain.

 

The idea of using a BA is that they find better deals (not only cheaper, but with development/improvement/return as per your requirements).
Deals the average punter wouldn't come across.

So I wouldn't expect a further 15-20% discount on what the BA can find.
Sure, there's no reason you can't low ball, particularly in this falling market....

My last initial low ball offer was rejected, and after 2 more offers and $25k increase (2.4%) I referenced other local sales and the falling market, then politely said "see ya" !
The REA couldn't even muster a response!!!

A BA is essential if you are not familiar with the area you intend to purchase in

 

Thanks for all the responses so far, definitely given me a few extra things to think about. As mentioned by some here, I'm also considering lurking for a few more months in the hope of further falls. I am a big believer in "no one can pick the absolute bottom", and I think if I can buy in a suitable area (guided by a BA), it should work out long-term.

 

I will like to share my personal experience.

I have a couple of real good real estate friends. I asked them before if they have ever thought of becoming Buyers Agent. Their answer are a Flat NO. Reason : They will be ostracized by the rest of the agents who represent sellers as Buyers Agent will be seen as working against them.

I then spoke to two other agents on this topic too and they admitted to me that if there are 2 buyers of a particular property - 1 just a normal buyer while the other represented by a buyer's agent, assuming all conditions offered being the same, they will be more inclined to push the owner to accept the one from the direct buyer. Reason being that they want to "make it hard" for these buyers agent to survive.

So this makes me ponder.. I have to pay a Buyer's Agent money to represent me yet, not able to achieve the best spot in getting a deal done. Umm..

 

I think it is actually the other way around, BAs make the REA work harder for their money, that why they don't really like to work with BAs, and sometimes REA want to use BAs for quick sell ( off the market sales)

personally I would rather trust BA's words than REA's words

 

That tells me that maybe you haven’t gone in hard enough .

In every deal I have done, I probably ****** someone off.

As they say in the movies namely, The Godfather:

“It's Not Personal, It's Strictly Business”​

 

@kieran Dam.. I must have been sick that day at business school when they teaching business wisdom. I have always thought it was "its not personal, just strictly for fun".

 

Mate, I didn’t go to business school; I attended the “school of hard knocks” .

Apparently, in that other fabulous educational institution (jail), they learn:

“It's Not Business, It's Strictly Personal” ​

 

Lol , trust you!

 

I did 'attend' business school but funny thing is, they could never find my name anywhere in enrollments.

 

Goes to show you that “it's not personal, it's strictly business” .

In this case, good business .

What business educational institution would want a failure like @Sackie in their student alumni?

 

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