Hi all,
I just came back from a trip away property hunting. I learnt some valuable lessons many of which I had already read about, but witnessed them in action myself.Some of the things I noticed were techniques used by agents to get their way with you. I thought that maybe others could add to this list from their experiences, here are only some of mine.
1. Internet says one price, but when you get their its 10K – 15K less.
2. Internet shows a good pic but when you get there half the back of the house is hanging off. And there are still tenants living there.
3. Your told that a property is renting for a much higher rent, but only to find that its the owners son. I had to ask the tenant myself to get this info
4. Factories and large industries that have closed down are confirmed opening up in the next month. When in fact its the same unsubstantiated rumour that has been around since it closed
5. Say the property has 220K on it. The agent tells you that the vendor has knocked back 210K. This sounds harmless, but I noticed that it works to set a price in the buyers mind and puts doubt in your mind of what is a reasonable offer.
6. Stories about the real-estate agent did so and so with a property just like this and everything was just great and jim and dandy and they made a fortune and bla bla bla bla. Or the same kind of story but about some other investor etc etc.7. The first question by the relo is “what are you looking for” the second question is “where are you from”
I had every single one of these techniques and more used on me on my trip. This last one, I said how is it relevant where I am from? She started to splitter and splatter and said “well it helps me find you a property because um… I know what you can do with the property”. Obviously I said “Sorry can you explain what you mean. And then she just repeated the same line. So I just let it go.
Not all agents were like that. Many were really good and you could tell they were honest.
Any way, be aware of these techniques. I also found that some were very effective on me and I did not notice until later what was really going on.
If you have any of these beware points please post them.
MarkyMark
Hi Marky,
my greatest diificulty so far in property investing is telling whether agents in VIC are honest. Three I have dealt with here, one in the country – two other in inner Melbourne. I can’t tell whether they are honest or not when selling me a property.
Like Steve said in his book that he realised that there was a price for the locals and another price for the city guys.
Kind Regards,
George.“If You never never ask, you’ll never never know”
Whenever I get hit with an open ended question I hit back with the best line of all, “Obviously you have a reason for asking that question, would you mind sharing it with me”?
The last REA that asked me a stupid question copped that one and didn’t he end up looking like a monkey in a suit!
But getting back to it I must agree Marky, some of these guys are that good you cant tell if there full of it. That’s the job criteria Im afraid “Sales” The art of selling yourself.
A good way to spot a stiff is direct eye contact when asking, or receiving an answer. If the eyes remain in contact with yours with out a blink or turn of the head you are pretty well safe with the answer, you have to be good to pull the sincerity off like that. Its not fool proof all the time but its as close to a lie detector as you can get. If they leave the sunnies on then you know its crooked[shades]
There are a few good books around on body language and I think it should be included as another tool for success in property.[thumbsupanim]
“Dont be looking in your back yard for a four leaf clover when the opportunity of a lifetime could be knocking on your front door….” “Even though you may be on the right track, you can still get run over if you sit there long enough”
Great post Marky
in regards to point no. 5, what do you do then ! Say the price of a property if b/w 220,000 – 230,000 and you offer 220,000 , agent says the vendor has declined an offer for 225,000. What next. Can they lie about that. Do you submint an offer for 222,000 ?
Too many mind games, too small a mind
WF
Relationships are everything in this game. I have found that dealing with one agent in one town has made a difference. Often country agents do not act under exclusive agency agreements and therefore can sell you any advertised property.
Building that relationship with one agent can create a lot of gratitude.
I would ask why he knocked back 210k and when? Its quite fair to say he is asking way to much, would that be fair Mr REA?
Leave him the slip of paper with 170k on it and tell him to call me when you need a commission.
Heres a banana you monkey, I will see you at the zoo…………
“Dont be looking in your back yard for a four leaf clover when the opportunity of a lifetime could be knocking on your front door….” “Even though you may be on the right track, you can still get run over if you sit there long enough”
Not sure what I find unusual about any of the things raised in your post, Marky, but others might.
I generally find country people to ask things like “where are you from?” as a matter of courtesy. Perhaps the town is small enough so that they know everyone in the town, and know you’re not from there? Country folks just like to chat before doing business, maybe- go figure- doesn’t make them all scammers.
About some things, I’m cynical and questioning. But i just don’t see anything particularly controversial about what you’ve written.
kay henry
markey – i agree with you. if you are an out of towner it is the agents best interests to find this out as quick as possible and try and pull a bit of a swifty. with country towns going great, +ve cashflow, buying sight unseen etc etc all the rage, these guys can see a canary from a mile.
check all your facs before being sucked in. just because they are from the country doesnt mean that attitudes are as wholesome as apple pie (or shepherds pie)
Well, I thought that was a good one about the owner having his son in there paying a high rent.
Hey how many times have you discocered this?
Hey Marky,
Agree with all u hav said, its happened to me many a time, most common was the higher rental then usual promise (family once again lol), the promise that a lick of paint and a mow of the lawn will add X thousand dollars to the value (so why doesnt the vendor do this … dahhhh???) lol…
“where are you from” …. geeze this question really shites me at times, some, as Kay sed, do it out of common “country” courtesy, others, like an agent in Wellington, NSW wouldnt shut up about how cheap prices were compared to what “you sydney siders” are paying, i was reminded that the purchase price for some of the crappy run down shacks she tried to sell me were only a 10% deposit in sydney (several times over), and the prices were etched in stone, no haggling, no offers pending this and that…
I walked away, not happy with her attitude, and noticed 2 houses i had seen re-advertised a month later with 10-15% reductions….. haaaa….
Agents are now selling by a method called “private tender” i think its called, where agents tell u where to start an offer, and advise that the asking price has already been passed…. not directly of course…. steer clear… if its for sale for 110K, and they wont accept 112K, good luck to the other person (if they exist) who has offered more then you…
But thankfully not all agents are like this….
Cheers
Jason
I have found most country agents pretty good. However I have my ways of getting thru the charade. It does help to know body language and the best of all ask questions u already know the answer to and act dumb.
IF they get a glimpse of intelligence they will be very careful in their approach and sells, if u act dumb they drop their guard fairly quickly.
Ask lots of questions and fast don’t give them too much time to think ask the same questions spaced apart sometimes u get different answers. I even prefer to take them in my car when looking buy them lunch, tell them to save their fuel its unfamiliar territory for them and can throw them a little off balance with out them even realising it. Be very very friendly but most of all act like u know little.
Once this has been done u will have a good idea if the agent is full of it or not. When the deal is ready to be done then show your intelligence, by then they would more then likely like you and be more helpful.
Works for me.
Regards Bear
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DONT MISS OUT!!!!!MarkyMark,
It’s okay to be an “out-of-towner” but if you add that to being “armed with little or no knowledge” of the area, and haven’t done your homework, you run the risk of being stooged.
RESEARCH, RESEARCH, RESEARCH….ASK ALL THE QUESTIONS BY PHONE FIRST….better a huge phone bill, than huge mistake!!!
Jo
Yeah, research is the answer to RE. Basically, by the time I call a RE to start asking questoins about any place, I like to have read every article about the region, the town, the street, and feel like I have a handle on all known issues about the place.
Personally, I don’t see RE as a game of one person outwitting another (ie RE outwitting me or vice versa). I am just always myself to RE’s, and I find they are either usually helpful and nice (most of them I have found to be like this) or they are snooty and I don’t bother dealing with them.
As I’ve said before, RE is *to me* about bricks and mortar AND building relationships. For others, it is a numbers game, or about personal power or something else. I’ve kept enjoying RE because of the relationships I’ve built- teamqwork with RE agents, vendors, PM’s, banks, solicitors, etc. If I felt suspicious about all of them, it would do my head in.
If you do your homework, you should almost know as much as the RE. So you need never feel worried about being hoodwinked.
kay henry
I agree Kay, but it also pays to sus them out in your own way , isnt that just being yourself?
I also agree that most agents (not all) have been great to deal with , some have been slack however but ya get that in all walks of life [wink]
Regards Bear
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DONT MISS OUT!!!!!Thanks for the interesting comments.
Hi WallFlower
On your question on point number 5. It so happened that I was interested in that property. So what I did was I did a full inspection on it and totally sused it out. Then i walked out with the agent and said I will offer you 190K and I put it in writing for him. I was by no means low balling as I knew from my research that this property was well and truly not worth the asking price. In my mind I was prepared to pay 195K (5K more than I offered).They came back at 195K and when the agent told me over the phone that that’s what the vendor wanted the agent said again “and you know they’ve already knocked back an offer of 195K” Obviously implying that they wont go lower. I knew that counter offer was coming so it didn’t matter at that point.
There is a great thing I read somewhere, I think it was on this forum. Basically it talked about allowing the ‘other side’ of any negotiation to have a win. If I had said “my offer is 195k and not a cent over then the other side did not have the chance to win as well and it all may not have worked.
Kay henry
I agree that country people do ask where are you from as a form of courtesy. One agent in particular that I was dealing with asked me and I could tell that it was simply courtesy and also I think to assist my understanding of the area, which she did. The area that I went to I had researched really well. I found that if an agent is going to use what ever technique then your chances of seeing to the core of what is meant is to really know your stuff about the area.I came to the conclusion after my trip away that the way to win is to not compete against the external influences. I was there for a very specific reason I knew how much I could spend, I knew the area and dynamics, I knew how to look at deals and see if they fitted into my plan and if they were profitable.
These were all things under my control. Anything outside this (good or bad real-estate agents comment etc ) either assists you or does not. When I found that I was getting confused (and I did get confused about what I should do and what I was being led to believe by what people were saying) I went back and asked myself “why am I here, what do I want and what do I know is true (i.e. my research)”.
This put me straight back to where I was coming from. I found that cleared things up well for me.
An example of this is the offer that I was describing above. I was in a dilemma, I was walking around that house trying to justify 210K (the knocked back offer) The area was great and I thought that that might have brought the place up a little. To make things worse I had past sales data on every area accept that one (my fault), also there are some emotions going on inside me about low balling.
I then thought what do I know is true about this area, it was then that the confusion vanished and I offered 30K below the asking price and the thought of low balling did not even enter into my mind. It was clear to me that this property was over priced and if they had had an offer of 210k then that investor, had, in my opinion, offered too much.
Hello all, jsut to drag this out a bit further, I really need to learn ‘the art’ of figuring out excatly what the frik to pay for a house.
If one had a house that they wanted $95,000 for, is it reasonable to say they would put it on the market for 100,000 so they could have a bit of bargning le-way. ? Now, bunny (me) comes along and offers $95,000, RE says ‘they have refused offers for $98,000. Do i just pay the $100,000 and buy the bloody thing (coz it meets all my requirements).OR, walk away etc. I have missed out on a few houses that consequently get sold for a couple of grand more than what i offered. But the price i offered was my max for our stratgey…it’s getting a bit frustrating…WF
Hi Wallflower,
Let me explain how I work it (it’s by no means the right or wrong way; just my way). If a property is advertised on the market for 100,000 I assume they want 100,000. If they give a range of say 90,000-100,000 I split the difference (using the midpoint) as an indication of what is a likely acceptable figure for the vendor. HOWEVER, it is not always going to guarantee a sale at that price!!
I too have lost properties for a mere thousand or two (at most). But as I am buying an investment, I have to be emotional removed from the property. It is often emotional attachment that guides people to over-extending themselves and their budgets.
Take heart, the right one, at the right price (or the price you are willing to pay) WILL COME ALONG. In the meantime, keep bargaining – maybe use things like shorter settlement periods to win you some favour with the vendors.
Good luck
Jo
MarkyMark :o)
Sounds like you had an interesting time out there!
With the last RE I had (and am having) dealings with, I found no point in pretending I am from the local area (coastal victoria) when in fact I am from urban sydney :o)) I told her immediately that I am in sydney, and I asked if she was from the local area. She told me she had grown up in a place that was near to where I had gone to Boarding School. That link kind of opened up a channel for us, and made our chats a bit easier.
In my work, I have to negotiate with people every day- from every level of the structure I work in. I do exactly the same thing with them no matter what the issue is- do my research so I know what I’m talking about, and then be myself in every facet of dealing with them- stand by my principles, but let them know I am being authentic. I have made it a conscious choice to be myself with every person I know in life. Whilst people don’t always agree with what I have to say- in business or RE negotiations- most have learned to trust me.
Like with anything else, when we try to make out we are something we’re not, people can usually see straight through us. Better to display ignorance, I think, than to pretend we know stuff when we don’t. Humility works.
Seems you stuck to your strategy, Marky, and didn’t rush into anything- good for you :o)
kay henry
Wallflower,
Sorry, I should have clarified….as for the advertised 100,000 house – just because they want 100,000 doesn’t mean I START at that price !!!
Jo
To easy, ask agent how long property has been on the market if its been their a month i offer $90,000 not negotiable. If its been on the market for 2 days i offer $94,500 if its a good deal.
Dom[biggrin]
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