Hi all,
Please let me introduce myself. My name is Tee and I have been checking out your site for a few mths now. I have been considering investing and am hoping to buy my first IP soon when things settle???
Quite a lot of useful information flows through here but I must admit some of it it still a little technical for me at this point.
I would love to be able to find someone with some investing experience who might be able to help me out with occasional questions. I am from Newcastle.I am nervous about taking the plunge particularly in relation to the negotiation side of things since I have never had to deal with a real estate agent before. How do people deal with estate agents? Any tips??
Where do I start?
What is the best way to make an offer? Walk in and say I'll offer u $XXX or how for a written one??? What if any conditions should I place on the offer? Subject to finance, ,subject to favourable building & pest inspections etc … what happens between time offer , acceptance and contract signing? Can I back out if needed eg horrible neighbours scenario etc??
Hope someone can give me some tips.
Many Thanks and I love reading your posts!!
Cheers
TeeDear Tee,
The first lesson on how to deal with Agents is to ignore most of what you read on Investment forums as you will only ever hear the bad stories and in fact most of them are only bad because the investor did not get their own way. The fact is Agents are actually real people just like you and I believe that if you treat them with the same respect that you expect, you will have a good experience. Tell them what you are trying to achieve (No of Bedrooms. Bathrooms, size of land, location etc) and how much you would like to invest. Get them to show you some properties and you will quickly learn fair market price and have more confidence to place an offer on the property that eventually takes your fancy.Many people will try to tell you that the profit should be made on the purchase, however I will tell you that the profit is made when you purchase. There are many investors running around that would've, could,ve or should've but they couldn't get the price down to where they thought was a good buy and the other person who was prepared to pay the extra is sitting back counting their profit and the other buyers loss.
Agents are real people, and the majority are great – however, you're not there to make friends. Don't be afraid to tell them what you think a property is worth to you or what you are prepared to pay for it. Don't be afraid to negotiate. They are legally obliged to advise the seller of all offers.
As agents work from commission a few thousand dollars difference (or even more) is negligible difference to them in terms of percentage earned in commission but can make a big difference to you in terms of profitability margins.
Building checks are always a good idea however, and although fair play to withdraw from an offer before any contracts signed try not to unless for good reasons. Just be upfront about what will make or break a deal for you – you will soon find out if you are being unrealistic!
Aren't REAs currently the most untrusted proffession in Australia, having beaten even Lawyers?
Treat them like you treat any other salesperson, politley but always aware of the fact that they need you more than you need them. If you don't buy, it's their loss, not yours. There is heaps of stuff to buy at the moment and heaps of REAs looking to make a sale. Everything they say is about making the best sale they can, so everything you say should be about making the best buy you can – that keeps the playing field fair.
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