When I’m looking through or enquiring about a property, agents often ask “how much do you have to spend?”.
This may seem like a simple, direct question but if I answer honestly doesn’t it give away too much information to the agent? I mean if I’m looking at a property that’s asking $320k and I can only spend $260k max, wouldn’t telling the agent that turn them off? They wouldn’t show much interest. But I know that having a look at the property and putting in an offer might work. Flip side to the coin, if I say that I have plenty to spend, agent might then pass that on the owners who might play stubborn when negotiating, especially if they know that I’m love with their property.
So, what to say when they ask “how much do you have to spend?” ?
Ah, isn’t negotiation an art….. anyone know any good books on negotiating on property?When Im asked my price range, I usually say that I’m chasing the return and not limiting myself to a price range.
I just say I’m flexible and the price I’ll pay depends on the results of some number crunching.
This way they understand that I’m not emotional about the place – it’s all just sums to me.
I also say it depends on the Property; then I ask them what year it was built in..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorIf you dont tell the agent even a range, then they usually dont bother calling you back. Why would they? You might not even be able to get finance and you could be looking at properties from 400k.
As an agent I find that we usually dont bother dealing with people who wont at least give us a range. We like to negotiate & make deals, and yes, we get paid by the vendor, but not if deals arent made, then there’s no commission.
My advice, at least give some range, or give the agent an idea, even if it’s below what you really have to spend.
Just some food for thought from the other side of the situation
(“,) $$$ HoLdEnCoMmOdOrE $$$ (“,)
tell them you are an investor with unlimited finance!
Price dosent matter you are looking for a value add or high returning property!We buy properties in Adelaide. No Agent Fees.
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http://www.renttoownau.com/ http://www.vendorfinanceau.com/I agree with the others.
I just say I am after yield and price isn’t such an issue if the returns are there. they are so used to people with smaller goals of a home or an IP.
I do usually give a range as we all know the higher yields are usually in a certain bracket but I also make it clear I can go higher if something special comes up.
In todays market I doubt they will let you go too quickly.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi I’m an agent myself (Bulgarian real estate: http://www.balkandreams.co.uk/ )and to be honest I have never asked anyone that question. However I have been asked the question and here is what I think is a good answer for the situation you described earlier on. If you know that you are looking at a property which is over your budget, you can say exactly what your budget is (or closer) and that you are looking at this particular one for a friend (probably good to take a pics ) and if you do decide to buy it, because you really like it, the agent will be well aware what you have and so will the owners.
You might be able to knock off a couple of grand this way, I don’t think there is any way possible to go as low as you were saying.From the agent’s point of view, and to be fair, I always give a price range. After all, they need something to work with! If not, then I doubt many would have the patience to go much further with you.
In all the deals that I’ve done, I’ve provided a price range, as, by the time I’ve commenced my physical search, the research done on yeilds, previous sales and specific areas beforehand has ascertained my price bracket pretty well. If I don’t know what a likely fair price estimation is on a particular type of property, then I haven’t done my homework.
Having said this, however, I do keep an open mind and, if I am financial enough [biggrin] let the agent know to keep me informed on any great return- priced up to $x amount. This also lets them know that I do have the finance for the right property should it come along.
The price range I usually provide is also large enough to leave room to negotiate effectively. Doing my research thoroughly also allows me plenty of leverage to use in negotiating the best price I can possibly achieve. And, to date, I’ve been pretty happy with the results [exhappy].And Simon is right, in that most REA’s in today’s market (in NSW anyway) are looking after their second best asset (their buyers) much better than in boom time.
Cheers,
Jacque
http://www.housesearchaustralia.com.au
Totally Independent Buyers Agents- Sydneyhttp://www.invested.com.au Australia’s premier Investor Education site
Fair Point Jacque,
In my work I also need a rough guide before I can help people plan their finance. All too often we suspect the worst of REAs but we know there are some very professional ones there. I hope that the end of the boom should shake out the cowboys after a quick buck like it is in my industry.
I have often suspected motivations of Agents. There are some I know who work for the vendor right up until the listing is secured then work for themselves to get a sale through – even to convince a vendor to take a low offer just to secure the commission…..cynical of me?
But I figure if vendors are appointing a professional to do their negotiating and marketing then so should we appoint someone to negotiate and research. In these days of a flat and even declining market there are some motivated vendors out there and unless we are close to the market ourselves we will not find them without assistance.
How would you suggest we choose a Buyers Agent that will work for us and not just send us a email of local listings and split commission with their listing mate and bill us for the service as I hear is happening in smalltown NZ and regional towns in Australia?
Even heard of agents renting places to mates at inflated rental then advertising the property at 10% + return!!
Is a minefield these days.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by Mortgage Hunter:But I figure if vendors are appointing a professional to do their negotiating and marketing then so should we appoint someone to negotiate and research. In these days of a flat and even declining market there are some motivated vendors out there and unless we are close to the market ourselves we will not find them without assistance.
How would you suggest we choose a Buyers Agent that will work for us and not just send us a email of local listings and split commission with their listing mate and bill us for the service as I hear is happening in smalltown NZ and regional towns in Australia?
Even heard of agents renting places to mates at inflated rental then advertising the property at 10% + return!!
Is a minefield these days.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
You’ve hit the nail on the head there, Simon, with the appointment of a professional. Just as I wouldn’t be bothered to going to the effort of investigating all the lenders options out there (much easier to use a broker!!) it’s interesting that most buyers of property still choose to go it alone- up against the experience and expertise of agents whose very job is to push the price as high as possible.
The way I look at it is that our fees pay for themselves (and, in some cases, many times over) so you’re ultimately better off using a third party.Commission splits are more common in places like the US, but truly independent BA’s are those (like myself) who take no kickbacks, commissions or referral fees from anyone. Fullstop. Any BA who is doing this has to disclose to you, as purchaser, that they are doing so.
Personally, with the obvious conflict of interest that goes hand in hand with commission splits, I’d only ever choose an independent BA. Ask them upfront if they get any referrals, commissions or kickbacks from anyone and ask for a rundown on what their system of a search entails.To avoid the old practice of inflated rents just prior to sale, ask to see a rental ledger which shows the rental history of previous tenants.
Cheers,
Jacque
http://www.housesearchaustralia.com.au
Totally Independent Buyers Agents- Sydneyhttp://www.invested.com.au Australia’s premier Investor Education site
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