Dear Kaza4k,

Unless you get an enormously huge offer, the buy and hold concept ( which has several variations ) is a much better long term wealth option.

Buy and hold can mean literally just that – hang onto the property and slowly over time the rents and the value increases, thus enabling you to buy more properties.

Or it can mean “wraps” – which can be translated as “buy, hold, but sell really slowly”. Again, rents / payments and values increase over time, and you still win.

Either is good. Selling over and over again involves too much work for not a guaranteed gain.

This is purely my opinion, so feel free to argue with me !!

BDM

Dear Moneytree,

I agree with Hilary – what ever the asking price is, always make a lower offer.

At best the offer will be accepted.

At worst, you will haggle back up to the asking price.

You’ll never know if they’ll accept a lower offer unless you ask !

Thanks,

BDM

G’day Superman,

You could try some or all of the following websites…

http://www.realestate.com.au
http://www.realestateview.com.au
http://www.domain.com.au
http://www.property.com.au

These will certainly get you started. I hope this helps…..

BDM

Dear Bruce,

I presume that the rules on agents commisions in WA are similar to those in Melbourne where I am….

Suggestion number one is to ring a few agents and ask. Don’t tell them your address or surname, but ring and ask. In Melbourne the initial offer by the agents is anywhere between 1.5 % and 4 % of sale price, plus advertising costs.

As Steve has suggested in his point # 5, negotiate. If the agent asks for 4 % of final sale price, offer him/her 1.6 %. If he asks for 2.4 %, offer him/her 1.2 %, etc.

Alternatively, make something up to suit you first, then the agent second.

I use a “sliding scale” that has been very successful for me. I offer the agent this kind of scenario :
0 % ( nothing ) up to $X, then 10% of everything between $X and the final sale price. The $X figure is negotiable.

Or you could offer 5% of the difference between $Y and the final sale price, including advertising costs. Or make something else up yourself !!

If you do your sums, and you know that the agent will always tell you that he can get $428 trillion for your house which you know is worth about $200 thousand ( or whatever ), you can use these or similar sliding scales to your advantage.

RE Agents are great at selling houses, but most of them are really bad at simple mathematics. Use this fact, but do your sums BEFORE you even talk to an agent. Keep in the back of your mind that an agent is not going to agree with your offer unless he can see that it is potentially atractive to him. The “sliding scale” concept means that if the agent actually does sell your place for $428 trillion, then he stands to get more than his original offer of 4% of final sale price with your “sliding scale in place”. But this should not worry you, because he has got an obscenely high price for you ! And everybody wins ! If your place finally sells for $200 thousand as you correctly thought it would to begin with, then the agents commission is very, very low. And you win !

Don’t set out to rip the agent off, and definately give him/her an incentive to get a good price for you. But do cover yourself, “just in case” the sale price is not as high as the agent originally suggested it would be….I used a similar scale like those above when I sold a house a year or so ago. I was very happy with the final sale price. The end result was that I paid $1400 in commission. Had I used the agents offer of 4% of final sale price, I would have had to have paid $4800 in commission.

I hope this helps.

BDM
Melbourne,
Australia