I have spent a couple of years now getting to know my market place and I feel I have a relatively sound knowledge. I am in North QLD and my market has been in decline. (bust or normal cycle is a whole other topic).
Anyway about 8 months ago I started talking to all local agents. I told them exactly what I was looking for and what price I would pay. Generally speaking these properties were listed at $320k – $350k and I told agents I would pay around $260k. I was not being abnoxious, I explained I had two reasons one I felt that is where the market would be in 6 months and two I couldnt afford nor did I think it was a good idea for anyone to take on a highly neg geared property in such times. While I got the impression they thought I was dreaming i dont feel they disrespected me or thought I was rude.
Anyway, I inspected an old property with an asking price of $220k. I advised that I would be willing to make an offer that would be between $190k and $200k but I needed to do a second inspection to determine the extent of water damage. The agent advised this would be too low and offer.. The property sold the following week for $185k (less than I was willing to pay). Owe well chalk it up to experience.
Another home I inspected was listed at $320k. I make an offer of $260k that was refused. I advised the agent that I was willing to pay $260k if the vendor ever decided they needed to sell it. I knew this would take a while so I sat back and watched the asking price drop $299k then $280k. I spoke with the agent again and asked if they would consider my $250k offer now.. no response anyway ironically my inlaws put in an offer on the weekend and it was accepted $255k!
Two homes that I wanted to purchase sold for 5K less than I was willing to pay, even though people thought I was crazy that vendors would take these offers in time.. but the problem is they did not sell to me..
What am I doing wrong.. how do i get my hands on these sorts of properties. (I realise my post sounds kinda arogant but I promise I am lovely with these agents and thought I had a good relationship with them.. some I would even call friends of sorts).
It seems they just play each day as it comes, never think owe I know someone who would buy this at this price I might just give them a call.. I dont understandJosh AthertonMember@josh-athertonJoin Date: 2011Post Count: 269
apart from price what terms are you offering?Jacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
Remember that even if, for example, a property really is only worth the amount you are offering, you cannot buy it if the vendor does not wish to sell for that figure. Their reasons could include the fact that they'd make such a loss, they might as well hang onto the property, or that their feelings are hurt by the low offer. If it is the latter, why not offer more money with a really long settlement?
Portfolio I was offering unconditional 30 day.
JacM I dont think that price is so much the problem as timing, after all they ended up selling for less than I was willing to pay.
I really feel that the problem is in my management or communcation with the agents. After all it is they who know when the seller is starting to feel pain or starting to consider offers less than the asking. I know agents dont work for the buyer but how do you get them to pay attention for more than 5 min.
I just cant work out when to time my offers, thats why I thought I would try working with the agents and advise them that as soon as the timing was right my offer was there and I would act timely (I had pre approved finance etc).
Should I have waiting to submit my offers, I kinda knew the sellers had some realisation work to do but thought it worth a try, who knows what their situation is right.
Should I have regularly submitted the same offer to remind them I am still here and still interested.
What do others do when you like a propery, know it is overpriced and that at some stage the seller will come down to a realistic selling price and thats when you want to purchase it. How do you make sure you get it at that price and not someone else?gmh454Member@gmh454Join Date: 2003Post Count: 537
you are pricing corerctly but making offers too early
stand back, and wait (think hyena or vulture) let them sit …. eventually they will be receptive..
the agent who has listed it at 320 cannot put in a low offer like 260, it will look like he –
a. has not advised correctly
b. given up too early
c. is selling it too low …. to a mate.Josh AthertonMember@josh-athertonJoin Date: 2011Post Count: 269
try to gain an understanding of the vendors position first. this will help you get the timing right. I agree with gmh454 just sit back and wait. Sometimes relationships with agents aren’t as valuable as people say. Agents like getting a new buyer out of the blue who is quick to act. Maybe try having someone else put the offer forward once you have seen the property.
whatever the average time on market is just wait for that to be up or nearly up before presenting but make sure you are first to view.
Screw with the agents mind. Dont ring them back after the inspection either. view….walk away…keep an eye on the net with price, even drive by during an open home to see how many people are looking…you can view the hits on a realestate.com listing, do this and then make an appointment with the agent once the average time has come past and then make your offer. You will win some and loose some this way no doubt but I am sure overall you will get one.
Are you buying for investment? have you considered stronger areas perhaps where market price is fairly standard but values are on the rise not in a slump?
Thank you I think you must be right.. I always seem to lay my cards out too early. Owe and yer I always give the agent detailed feedback..dou
Just a bit tricky cause most of these homes have been on market for 6 – 12 months so not quite the standard cycle at present. That said as prices have come back so far there is more interest entering the market so perhaps we have reached a bit of a plateu.
Guess I just have to learn to play the game a bit better.. didn't realise realestate was so much like poker!
Portfolio PI, I have certainly considered other stronger areas (and continously looking) but dont have many funds to play with so am a bit limited. I like my target area because it is well positioned to enjoy some of the benefits of the resource boom but is only 30min from the coast so I think will be positive in the long term (which fits my strategy) also nearby and an area I know well so feel a bit confident with it.SkydancersMember@skydancersJoin Date: 2011Post Count: 4
I think it’s sad that we have to play games but I think you’re right Intrigue.
Play hard!ksherwellMember@ksherwellJoin Date: 2007Post Count: 125
From an agents POV, you 1st placed an offer of $260k, then after a while dropped to $250K. It comes across like you are playing games, and no agent likes this.
Saying that the agent still should have called you, to say you can have it at $260k.
Was your offer in writing?
I have heard of experiences from other agencies where this has happened and the owner sued the agent for the extra amount.
Better hope these couples don't find out.
It all comes to the agent and understanding their vendorAndrew_AParticipant@andrew_aJoin Date: 2003Post Count: 392
So you were relying on the selling agent to alert you when your criteria could be met? (I think I have identified the problem)
> Agent's often don't know the vendors motivations themselves, if you want to buy a property at a price and it's not likely, submit a written offer and get it out in the open.. negotiations don't work.. wait.. move on.. look for more deals..try again later
> I'm a full time buyer and only a small % of the industry bother to chase me up, and very few do it more than a few times.
Thanks for your comments all,
ksherwell, I didnt drop my offer I kept it at $260k and I was certainly not playing games (sorry that was a typo.. dou). I wanted the home and to me and my situation the price was to be $260k. I offered to do a contract or written offer (site unseen on the spot)but the agent said no she wanted me to inspect first and was concerned my offer was too far away from asking price, thats when I said okay I will wait but can you please let me know when the expectations drop because I am ready to act at that price as soon as the seller is.
gmh454, I completely understand what you are saying about the agent that listed at $320k cannot take an offer in of $260k without it raising eyebrows but as it was 6 – 12 months after the first list, I didnt see this as a problem – the whole market moved and the agent could not be to blame.
Thanks Andrew I guess I am just surprised that the agents dont understand their vendors well or that they wouldnt contact me or particularly you if they know that a buyer is there willing to pay a particular price. I thought they would want a deal and surely picking up the phone to an existing buyer is easier than inspections and things with a new buyer.. hmm seems strange to meAndrew_AParticipant@andrew_aJoin Date: 2003Post Count: 392
It does seem strange, however it is true. Once you work with a situation long enough you begin to view it as normal and are not surprised any more. Generally the industry is heavily geared towards the new hunt new kill mindset and there are very few farmers out there nurturing longer term relationships where long term is more than a few days or weeksCatalystParticipant@catalystJoin Date: 2008Post Count: 1,404
Intrigue- a few questions. How many properties do you own? Do the agents know this? They may be perceiving you as a tyre kicker. I've met many. People that go to open homes for years. Put in offers but buy nothing. Don't get me wrong it sounds like you are trying to buy something. Do you have finance approval? Tell the agents you are cashed up ready to go TODAY.
I'm going to disagree with a few people.
First I think relationships with agents do matter. Having said that I know most won't ring you. especially if someone walks in the door with money ready to go. Why would they? Unless they have something ready to go. They don't have someone walking in the door and they know you are a buyer (as opposed to a tyre kicker).
Tell them what you are willing to pay and state why you think it's only worth that much. That way the agent knows you're not just making wild, low offers.
I also disagree with not keeping in contact with the agent if you think the property is a good oner at your price. As I said the agent will take the price from the person walking in the door. It's about timing. If you're not there, the person who is there will get it. Let the agent know you are keen at YOUR price. Also make sure you are speaking to the lead agent for that property. He/she is the one who makes the decisions.
Good luck. I know it can be frustrating when you do yourt research, find something good and you lose it. But don't dispare there are plenty of oportunities out there. I've kicked myself a few times but then something else always comes up.
Thanks Catalyst, you could be right they may think I am a tyrekicker who knows.
I only own two properties so far as I am new to the IP journey and yes agents do know this. I believe that many think I have a good understanding of the property market in this area. They know that I am pre-approved for finance and will act quick but they also know that I am not an emotional buyer so my price is my price and if I miss out on due to that I miss out.
What I hate is missing out when my offer was more than the final sale price and I dont understand how to secure the home I want at the price I want without submitting a written offer every week for the same amount.
While I do alot of research into the market I do alot on line and in the shadows so to speak. In 12 months of looking I have only been to 3 inspections and made offers on two of them. I dont want to be seen as a time waster.
I usually talk to the agent about my offer range prior to inspecting the home, as I say I am not an emotional buyer so the numbers are where the numbers are with or without an inspection.
I always explain to the agent my reasoning for my offer, I even try to present it in a way that helps them to communicate my position when talking with their seller. Maybe I am telling to much, giving myself away…Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069Intrigue wrote:I always explain to the agent my reasoning for my offer, I even try to present it in a way that helps them to communicate my position when talking with their seller. Maybe I am telling to much, giving myself away…
I don't think so. I always provide a reason for my offer in the hope that the agent will convey it to the vendors. It also helps establish some credibility – it shows you've done your homework.
I think Andrew made a great point above. It's probably due to the fact that the agents have forgotten you ever put in an offer in the first place.
JamiecolinnewlandParticipant@colinnewlandJoin Date: 2006Post Count: 128
Every agent is under a legal obligation to submit EVERY offer so do not take what the agents says "too low and offer". Write it up and submit a modest deposit ($1).
Sit down WITH the seller (not the agent) and find out what their selling motivation is; do they need CASH TODAY?
I would include a special clause to the effect that the offer is open until a set date and time 'UNLESS you have another offer on a different property accepted prior to them accepting'. This allows you to make multipul offers all over the place and only legally obliged to completed the offer that IS accepted. This allows you to get on with closing on a deal and not waste further time on poor agents or laging sellers.
I would also send a copy of the offer direct to the seller (and advise the agent of this as well), just to make sure that they are actually submitting your offer.
I would not carry a bleeding heart for too long either, just cast your net as wide as possible.
Cheers.Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069colinnewland wrote:Sit down WITH the seller (not the agent) and find out what their selling motivation is; do they need CASH TODAY?
I can't imagine there would be any real estate agents that would facilitate this. Most open houses are done without the seller present. Unless you knock on their door outside of inspection times (which won't prevent the real estate agent from being paid) and might frighten the sellers.
JamiecolinnewlandParticipant@colinnewlandJoin Date: 2006Post Count: 128
You are in the drivers seat, not the agent. Tell the agent you need to speak directly with the seller. The seller is the person that you want to speak directly to.
If the agent refuses to arrange a sit down, send a polite letter to the seller asking for a meet. Remind them that this will speed up your final decision making process and the offer and eventual sale = cash in the sellers hand.
What have you got to loose, at worst all they can say is "No".
Thanks Colin for your comments. I have to say that I agree that it would be better for my case to be able to speak directly with the sellers. Sometimes I think I understand more about the market and the sellers needs than the often newby agent.
I would really like to do this but as Jamie suggested agents are not keen and I believe that often sellers are not so keen (they enploy the agent so they dont have to be involved in any negotiations). I have often thought about sending a letter direct to the sellers but am concerned this will upset agents and make things even more difficult for me?
And thanks I am not really carrying a bleeding heart rather trying to learn as much as possible from the situation to make me a better investor in the long term.
I appreciate all the advice people!Jacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
Have you thought about hunting for property that is technically not yet on the market? For eg doing a letterbox drop in the area of interest introducing yourself, and inviting the owner to contact you if they might have an interest in selling their property, and at the same time saving themselves a bit of money (due to not having to pay a realestate agent commission).