Hello everyone.
Can i please get some tips on how to negotiate with agents? I’m new to the game and find that they are treading all over me when it comes to getting their lowest price.
For example, lets say the offer price is $120 – 139 000.
You do your research and crunch the numbers with the following details:
Sale price: 155 000
Reno: (10 000)
Acquisition/sale: (12000)
Profit: (15 000)
Other: (3 000)Offer: $115 000
Your aim is to buy, reno and re-sell in 12 – 18 months
You put in your offer and the agent comes back saying ”we presented the offer but they won’t accept it……..we would need an offer in the range as advertised” That’s if they presented the offer.
So you sit back and think…’’how do I come back on this??’’
Investor’s advice would be greatly appreciated!!
Thanks heaps.
Rich
HI Rich,
Put the offer in writting
ask the agent to present
response
move on or do the dealIt is a difficult question because in my opinion real estate investing is about people. relationships/communication etc etc. How to negotiate with a person depends on who the person is and to make it worse you are doing it through a third party which really makes it even harder to answer.
you may have a very young inexperieced agent who has just been sent out to get listings and sign people to exclusive contracts. he may have promised the vendors a price in order to get that listing and if it is early days he probably won’t be presenting you offer (sorry if that offends but they just wont tell you about it). Unless they are using your number to condition the vendor down to a more realistic price.
The job of the agent is to bring parties together to an agreable price so they get paid. That is it. Without doing that they they won’t get a cent so dispite all the whoha about them being an advocate for you there is quite a bit of conditioning going on on both sides.
It may help your cause if the agent can see a pack check coming his way when he hears your voice on the phone or sees your number flash up
how – he knows that you are a serious investor/person in general – he also knows that you are fair and will pay a fair price – but at the outset he needs to know that you can pull the deal off eg. if he presents this offer are you goin to be able to hold up your end of the bargain. can you do the deal at 115k or are you just fishing.
D&L Property Projects Ltd
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Hi Richard,
First what is your investment plan ?
Are you experienced at reno’s and costings ?
Why keep a reno property for 12 – 18 months and risk a tenant destroying all your hard work ? You might save some tax but it also slows you down stopping you from moving forward with too much cash tied up.
First you need to research your target market and determine how much renovated houses sell for and then work backwards. Not all houses that need work will be suitable. Make sure the property is well located close to schools, shops and transport and preferably in a quiet leafy street surrounded by houses of a similar or better standard.
Having found a suitable property next do a 1klm radial search which will list all properties sold for the previous 12 months. Use this data to back up your offer to the agent. Knowing why the seller is selling and how long the property has been listed, may give you an indication of just how badly this person will negotiate.Never tell an agent your price just say you’d like to submit a written offer. An agent will try to talk you out of a low ball offer so only insert the amount at the last moment and make sure its always with a deposit cheque. Never tell the agent your strategy for the property or become emotionally involved, its just another deal.
If your offer is going to be substantially lower than the asking price ask the agent how did they arrive at that price and have they had any other offers yet ?
I hope this may help you on the way to success.
Kind regards,Amanda
“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”Thank you for your detailed advice.
I’m going to put in the offer this week so let just hope i can get this deal….
Im in it for live in and renovate. Im very new and would like to use this as an opportunity to learn, make contacts and hopefully get some profit out of it.
Fingers crossed.
Thanks again.
richard.
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