Hi everyone. I'd appreciate anyone's advice/experience about this. Say there's a house I've identified as wanting to buy but it's not on the market. I think my approach would be to write a letter addressed to "The owner" and put it in their mailbox. The letter would say I am interested in buying your house – please call me (with more detail too, but not the offer price). Say the owner called me and we agreed on a price…. what do I do then?? What's my next move(s)? Thanks.
Have a solicitor draw up the contract, arrange finance, exchange contracts and settle on the property.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
The first point there confuses me. Does the vendor also get a solicitor involved or just normal conveyancing? By solicitor do you also mean conveyancor? Or specifically a solicitor? How do I avoid a situation where I've put money into conveyancing but the vendor changes their mind and I lose the money?
I think you're jumping the gun a bit.
Making an enquiry with someone out of the blue is a fairly common occurrence.
I would never introduce myself in writing. Too scammy. A professional approach is almost always done through a reputable agent.
Anyone could be your agent. Your solicitor, a buyers agent, friend of a friend etc. It should be seen as legitimate or you risk not being taken seriously. You can either have an agent negotiate for you or use the agent to introduce you if the response is positive and you do the negotiating personally.
Whatever you do you must have your ducks well and truly lined up before you initiate contact.
Freckle wrote:I think you're jumping the gun a bit.Making an enquiry with someone out of the blue is a fairly common occurrence.
I would never introduce myself in writing. Too scammy. A professional approach is almost always done through a reputable agent.
Anyone could be your agent. Your solicitor, a buyers agent, friend of a friend etc. It should be seen as legitimate or you risk not being taken seriously. You can either have an agent negotiate for you or use the agent to introduce you if the response is positive and you do the negotiating personally.
Whatever you do you must have your ducks well and truly lined up before you initiate contact.
Thanks Freckle, that's good advice. I'm thinking if I send 10 letters to 10 different people, 1 might respond wanting to sell. I'm just not sure what to do in regard to the contract issues.
If you're going to send letters I'd actually prefer to make approaches in person. You could introduce yourself to the owners and indicate your interest. A face to face encounter will provide you with much more information. A letter is simply sending a message in a bottle. If it fails you have no idea why. The personal approach at least gives you a shot at understanding what's happening which then gives you opportunities to counter objections or motivate the target.
As far as getting to the next phase of possible contracts I would tend to use a buyers agent as a consultant to walk me through the first one or two. They will provide the contract docs (if the seller doesn't engage an agent themselves) and help you navigate the complexities and overcome problems.
Do the initial grunt work yourself then bring in expertise to handle the various components of a transaction.
You should adopt a team approach to buying just as you would if taking on a conventional purchase.
Here's a little tip. People will react more favorably to polite, respectful, professional type contacts than flyers in the post. It's also an opportunity to gather information about a street or area. Questions like; "Would any of your neighbors be interested in selling?" It's the opposite of referral selling. In this case it's referral buying. You could leave a card if they change their mind or know of someone who might be interested.
Another tactic is to go to a neighbors and indicate you're interest in buying a property in the street or area and mention a few including your primary target. That may provide a lead in to an intro with the target or if people drop their guard provide you with some inside intel to work from.
You'd be surprised what people will tell you if you have the gift of the gab.
Take care of course with your approach if you decide to knock on the door. People will immediately have their guard up because they are protecting their turf and their person, and who knows… you might be one of those folks trying to convince them into some dodgy new electricity company.
Whatever you do, the first sentence should put them at ease and make it clear your intended conversation is about their lovely house.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
If you are really serious about buying a particular property/street II totally agree with Freckle re the personal approach. Letter-boxing may yield you something but I've had much better response through knocking on the door.
As JacM says – expect that awkward moment at first while you assure them of who you are and what you seek. The other option would be to drop a letter in their mailbox and follow-up a week later with a knock on the door.
Let us know what you choose to do and how it goes!
Cheers,
Tracey
Thanks everyone. It's the contract side of things that bothers me though. I spoke to my conveyancer today, who said that like any normal sale, the vendor would have to prepare the contract. I'm just worried that after agreeing on a sale and a price, the vendor realises that after paying a solicitor for the preparation of the contract of sale, I could just ride off into the sunset never to be seen again and they are left with the bill and a contract of sale they don't need. I wonder if there is a mechanism whereby I could have say a grand held in the vendor's solicitor's account, so that if I do bail, they get to keep my cash, but if it goes through smoothly, the solicitor releases my money. Does this sound reasonable?
Tracey B wrote:If you are really serious about buying a particular property/street II totally agree with Freckle re the personal approach. Letter-boxing may yield you something but I've had much better response through knocking on the door.As JacM says – expect that awkward moment at first while you assure them of who you are and what you seek. The other option would be to drop a letter in their mailbox and follow-up a week later with a knock on the door.
Let us know what you choose to do and how it goes!
Cheers,
Tracey
In all honesty, I think I would appear more professional with a letter. I'm in my mid twenties, and I look about 10 years younger than I am. I would get nervous in this kind of situation and they would not take me seriously. I do however write quite well, and I'd rather the initial conversation be in a less confrontational manner like a phone call. I'd like to ask you though, what is your success rate with out-of-the blue-knock-on-the-door approaches leading to actual sales? What kind of people tend to want to sell their house this way? Do they get suspicious and think that all of a sudden their house is worth millions since even a stranger wants to buy it?
alfrescodining wrote:Thanks everyone. It's the contract side of things that bothers me though. I spoke to my conveyancer today, who said that like any normal sale, the vendor would have to prepare the contract.Either party (buyer or seller) can initiate a contract. You walk up to someone and make an offer to buy their property for $XXX and they agree you have a contract. A written contract is simply the formalised version (for recording purposes) of something that is in the main negotiated verbally.
Quote:I'm just worried that after agreeing on a sale and a price, the vendor realises that after paying a solicitor for the preparation of the contract of sale, I could just ride off into the sunset never to be seen again and they are left with the bill and a contract of sale they don't need. I wonder if there is a mechanism whereby I could have say a grand held in the vendor's solicitor's account, so that if I do bail, they get to keep my cash, but if it goes through smoothly, the solicitor releases my money. Does this sound reasonable?You would make the offer in writing with whatever conditions you wish to include. Both parties sign it and an objective party witnesses it. A condition may include subject to solicitiors approval for example. You both enter into negotiations and agreements in good faith. If the deal falls apart then unless you have a prior agreement for cost each party bears their own costs.
In business when one entity offer to buy another the initiator normally bears the cost of DD and supplies a deposit to 1/ show they are serious, 2/cover the sellers costs, and 3/ pay a non refundable portion that usually covers both 1 & 2. A successful deal may include the deposit as part of the sale price (or not).
Alf here's a heads up.
Knocking on doors asking people if they might like to sell their property is a fairly inefficient way of looking for opportunities in a market. You are far better of using your time looking for motivated buyers through agents. What you are trying to do is what 5 million property agents do all day every day – chase listings. Why are trying to compete?
The primary reason people make offers to non sellers is for emotional reasons. They tend to offer above market not below market that investor would be after. There are those that make offers to buy a property that perhaps adjoins another so units could be developed for example. It's unusual to make offers for singular properties.
alfrescodining wrote:I'm in my mid twenties, and I look about 10 years younger than I am. I would get nervous in this kind of situation and they would not take me seriously.
Just about every person who went into sales was nervous and ballsed up their first few presentations. Jeez I made some right cockups when I first had a crack at sales. I think the first contract (investment for AMP) I ever sold I completely forgot how to do the paper work. You get the hang of it after a while. The more you do the easier it gets. Roll play it till you've got a presentation down pat. Every time you get a knock back or no remember the reason and develop a work around that helps move you forward if possible. Confidence is a state of mind not looks.
Knock Knock
Jack: Hello Sir my names Jack Freckle and I'm a young property investor (offers hand to shake) who's interested in properties in this area including your place. Would you be considering selling your property now or at anytime in the near future. If not would you know of anyone in this area that might be interested in selling?
Homeowner: No we just bought the place 12 months ago but the old girl across the road might be moving to a retirement village from what we hear.
Easy peasy stuff. You keep the conversation going if they're interested and you'd be surprised what information people will part with.
The trick is to ask questions not make statements. Questions get the other party engaged. Asking for an opinion is another ploy – everyone usually has one. If they engage you're off and running. It just becomes a conversation after that.
Freckle wrote:Alf here's a heads up.Knocking on doors asking people if they might like to sell their property is a fairly inefficient way of looking for opportunities in a market. You are far better of using your time looking for motivated buyers through agents. What you are trying to do is what 5 million property agents do all day every day – chase listings. Why are trying to compete?
The primary reason people make offers to non sellers is for emotional reasons. They tend to offer above market not below market that investor would be after. There are those that make offers to buy a property that perhaps adjoins another so units could be developed for example. It's unusual to make offers for singular properties.
That's the kind of property I'm after. Sites with development potential that aren't on the market, and the owner has no idea how much they are worth but I do.
alfrescodining wrote:That's the kind of property I'm after. Sites with development potential that aren't on the market, and the owner has no idea how much they are worth but I do.
OK I see now. I'd still do it person to person though. You surprise me in that you have the cahones to give development a go but don't have enough confidence in yourself to make a face to face work. I think you're worrying about the wrong things.
Letters that are too neat and lack a touch of personality are what is used by Real Estate Agents – its one of their marketing and prospecting strategies. I have found that this is very informal and wreaks of marketing all over it.
If you have written a letter the the vendor and they contact you great…. theres two answers that they will give you, call my agent or lets talk.
Having said that when you are talking to the vendor find out why they are selling and chat about their situation. That way you can both put your heads together and get a deal happening. From ther its pretty straight forward to send it to a legal guy to prepare the paperwork. If your doing something creative then check out this website: http://www.vendorfinacelawyer.com.au they have a whole bunch of information and legal contacts that can prepare the bespoke paperwork in your state.
good luck
If you draw up the contract with the help of a solicitor then you will need not to worry in the future regarding any problem related to the land.
All the very best..
Avoid letters or flyers. If you really want the property, have an agent approach the owner in a formal manner and start negotiations from there.
I thought so too. If I received a letter saying "To the owner" and "I am interested in buying your property. would you sell?" I would dismiss it as some form of spammy tactic.
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