Buying below market value
- Thread starter Mike
- Start date
What about doing a development yourself build something that results in "under market value"?
What about mail box drops?
What about even sharper practices of hanging around with old people (community service) or becoming mates with funeral directors, who can then recommend you to distressed family members..."I have a friend Mr Always Learning, he can probably get you some cash fast and work with you to offload your dear departed investment properties"
What about mail box drops?
What about even sharper practices of hanging around with old people (community service) or becoming mates with funeral directors, who can then recommend you to distressed family members..."I have a friend Mr Always Learning, he can probably get you some cash fast and work with you to offload your dear departed investment properties"
That applies to option #4 - Vendor directly. Presumably you are advertising directly to the public, some of whom may agree to negotiate with you directly therefore bypassing the listing agent.
Option #4 also applies to your scenario of referral to a potential seller.
Doing the development yourself will usually result in a property at below market value, however, the scope of my poll is about purchasing a property that is already built.
I expected to see option #4 leading the poll but I'm not sure why option #1 is doing so well. Can someone explain why I'm likely to get a property below market value when buying from the listing agent? I thought that would be the hardest avenue to get a bargain property.
It is possible to get discounts from developers but you usually have to buy in bulk to get them and then onsell the ones you don't want to keep. This is a risky strategy and should only be attempted in a boom market when buyers are plentiful. I consider buying off the plan as a retail purchase, not a discount to the market.
Buyers agents claim that they can purchase discounted property but there is no concrete evidence of this yet. Some people I've spoken to are still suspicious of buyers agents. They think they may be biased towards a particular real estate agency or colluding with the sellers agent. However, there is no evidence that this has ever happened.
I'm surprised auctions have a poor result, so far. Does anybody have any views why auctions aren`t a good place to find bargain properties?
Regards, Mike
I expected to see option #4 leading the poll but I'm not sure why option #1 is doing so well. Can someone explain why I'm likely to get a property below market value when buying from the listing agent? I thought that would be the hardest avenue to get a bargain property.
Listing agents are an amazing source of bargains. Some of the things i look for when buying from agents:
1) Lazy. Cant be bothered taking buyers through a property..they would prefer to CALL buyers and try and sell the property .."unseen". Dropping the price 20-40% off market would be one way to toss a property off the books..quickly. I had an agent boast to me that he sells most of his properties from his desk only. ..as he has buyers "lined up ready to go". A true diamond-in-the-rough, this type of agent offers stupendous prices for properties with minimal outlay of time and effort for the buyer.
2) Heavily conditions sellers AFTER they secure the listing... to accept low offers. The seller's interest comes a distant second to the agent's commission.
3) Agents who want to build up their rent porfolio. Offer them the management on all your purchases through their agency...and you will be a preferred buyer. Works best when dealing with a principal of a new agency...keen to build the business.
4) Agents who tell you over the phone the vendor's lowest price/circumstances of sale. Agents may go thru the routine of disclosing a price lower than listing price or revealing the vendor's circumstances of sale merely to solicit buyer interest . But if you know your market well... you can work out pretty quickly if the lower quoted prices are genuinely below market.
* * * *
Dealing with the vendor direct to get a bargain also works. Requires a bit more effort but can be rewarding. Its all in their ad: if they list their properties too high - move on. The other issue with dealing directly with vendors on bargain/hot properties is that they are hard to manage. Say a price is agreed at 30-40% below market value...and they havent organised their contracts....cant sign for another 10 days.... but their "hot" ad with the "hot price" is still running...and they have your offer as a benchmark .....- i think u get the picture. An unethical lazy commission hungry agent in this situation can better "manage" the sale and protect your bargain deal. Sad.. but yep, there are agents who actually find more joy protecting the buyers' interest than that of the seller !
Cheers
Waverly
Listing agents are an amazing source of bargains. Some of the things i look for when buying from agents:
1) Lazy. Cant be bothered taking buyers through a property..they would prefer to CALL buyers and try and sell the property .."unseen". Dropping the price 20-40% off market would be one way to toss a property off the books..quickly. I had an agent boast to me that he sells most of his properties from his desk only. ..as he has buyers "lined up ready to go". A true diamond-in-the-rough, this type of agent offers stupendous prices for properties with minimal outlay of time and effort for the buyer.
2) Heavily conditions sellers AFTER they secure the listing... to accept low offers. The seller's interest comes a distant second to the agent's commission.
3) Agents who want to build up their rent porfolio. Offer them the management on all your purchases through their agency...and you will be a preferred buyer. Works best when dealing with a principal of a new agency...keen to build the business.
4) Agents who tell you over the phone the vendor's lowest price/circumstances of sale. Agents may go thru the routine of disclosing a price lower than listing price or revealing the vendor's circumstances of sale merely to solicit buyer interest . But if you know your market well... you can work out pretty quickly if the lower quoted prices are genuinely below market.
* * * *
Dealing with the vendor direct to get a bargain also works. Requires a bit more effort but can be rewarding. Its all in their ad: if they list their properties too high - move on. The other issue with dealing directly with vendors on bargain/hot properties is that they are hard to manage. Say a price is agreed at 30-40% below market value...and they havent organised their contracts....cant sign for another 10 days.... but their "hot" ad with the "hot price" is still running...and they have your offer as a benchmark .....- i think u get the picture. An unethical lazy commission hungry agent in this situation can better "manage" the sale and protect your bargain deal. Sad.. but yep, there are agents who actually find more joy protecting the buyers' interest than that of the seller !
Cheers
Waverly
How to find a bargains...
Hi,
Listing agent.... yes
Buyer agents... yes
Seller direct... yes
Developer... yes
Knowledge and patience = Bargain.
Summary - Bargains can be found many different ways...
Just keep looking for idiots, dis-honest selling agents and inconsistencies in the market... bargains happen but most people (99%) are never ready when they appear.
Just my opinion as a buyer agent on the gold coast.
Ross Sondergeld
Ross for Property
Hi,
Listing agent.... yes
Buyer agents... yes
Seller direct... yes
Developer... yes
Knowledge and patience = Bargain.
Summary - Bargains can be found many different ways...
Just keep looking for idiots, dis-honest selling agents and inconsistencies in the market... bargains happen but most people (99%) are never ready when they appear.
Just my opinion as a buyer agent on the gold coast.
Ross Sondergeld
Ross for Property
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