Dealing with real eatate agents, any good advice/strategies to not play their game?

[Chloe]

I know this forum is primarily about investment properties but I need to buy my ppor first to then go on and buy an investment property.

I've recently made an offer on a property and OMG!! What a song and dance over something that could be so straighforward! I didn't think agents were still playing games and lying like they used to back when we bought our first house.

Does anyone have any tips on how to play the game? I'm not wanting to rip vendors off but just pay a fair price of what I think it's worth.
This particular house that I put an offer on had a terrible building report so I withdrew my offer and have made a new lower one. The price of the house has been reduced 3 times since it's been on the market
and I'm the only interested buyer.
The owner is hanging out for another $10,000. The house needs underpinning, new plumbing, drainage, reno's, massive front trees need attention. It's also a deceased estate that belonged to her mother.

I hope this is not something I have to do hundred's of times as it's stressful, draining and certainly dealing with people who are constantly lying and asking for more money is not fun!

Any advice would be greatly appreciated.

 

[saiman]

offer what you want to pay for it and not a dollar more...

...then forget about it.

if your phone rings and your offers been accepted you've won - if not, you've probably found your next "dream home" already and its time to move on

 

[Chloe]

Thanks saiman, just not sure how many times I will be repeating this cycle.
So many people tell me to offer less etc...does anyone really do this?
No one i know does. I can't imagine many of us would have homes if we were always offering less than the asking price.
So many houses are priced as $whatever figure plus. Apparently this means add 10%....who made this rule? Is it really so?
I'm in Melbourne btw.

 

[saiman]

you don't need to worry about anything else except for how much you are willing to pay for a property at any given time. If you need to repeat this process many times, so be it - that is just the way it goes....the more you do it the better you will become at negotiating and eventually your "strike rate" will be much better as you gain an understanding on what really motivates an agent to sell a property

Discounting is really the norm and accepted but you have to do it right otherwise dirtbag agents will smell a novice a mile away and try to sell you into a higher price

Always make your serious offers in person with a signed contract, 5 or 10% deposit cheque (or written confirmation you will bank transfer the deposit immediately after the contract has been accepted), and include a sunset clause because 'you are putting similar offers on 5 other properties'

 

[Ace in the Hole]

Just be patient and not too attached.

 

[willair]

I know this forum is primarily about investment properties but I need to buy my ppor first to then go on and buy an investment property.

I've recently made an offer on a property and OMG!! What a song and dance over something that could be so straighforward! I didn't think agents were still playing games and lying like they used to back when we bought our first house.

Does anyone have any tips on how to play the game? I'm not wanting to rip vendors off but just pay a fair price of what I think it's worth.
This particular house that I put an offer on had a terrible building report so I withdrew my offer and have made a new lower one. The price of the house has been reduced 3 times since it's been on the market
and I'm the only interested buyer.
The owner is hanging out for another $10,000. The house needs underpinning, new plumbing, drainage, reno's, massive front trees need attention. It's also a deceased estate that belonged to her mother.

I hope this is not something I have to do hundred's of times as it's stressful, draining and certainly dealing with people who are constantly lying and asking for more money is not fun!

Any advice would be greatly appreciated.

When you look at the problem list even starting with new plumbing costs sounds like a nightmarish high cost stress scenario and if they have gone backwards in price 3 times then unless they make it four times then just tell the agent your not interested anymore and see what happens and walk away,bottom line if you start low you can go up in price once you go in high it's very hard to go lower,,..

 

[Chloe]

willair, the underpinning will cost $15-$20,000 as we've had quotes.
This is the first time I even heard the word underpinning....now I feel like a building expert!

 

[mattysavager]

Discounting is really the norm and accepted but you have to do it right otherwise dirtbag agents will smell a novice a mile away and try to sell you into a higher price

I know I'm biased - but how does the above scenario make the agent a dirtbag?

You do know that the vendor is paying the agent thousands of dollars to 'sell you into a higher price' regardless of whether or not you are a novice?

Agent's are not impartial mediators. We are employed to maximise the sale price of any property.

 

[willair]

willair, the underpinning will cost $15-$20,000 as we've had quotes.
This is the first time I even heard the word underpinning....now I feel like a building expert!

Chloe then once you do a take-off of all the other costs then it may well pay too walk,but from my experience the value is always in the site-land area zoning
future or now not what sits above the site,plus how many people are in the estate because eveyone will have a different idea of value,and if there is more then one in the estate you will be dealing with several mindset who have no idea good luck..

 

[mattysavager]

Any advice would be greatly appreciated.

The agent will try to increase your offer. Your best advantage is time. If you know the property is not going to be snapped up, then wait until the vendor meets your price.

If he doesn't and another buyer sneaks in and takes it for $3,000 more, would you be upset? It's all about bluffing. If you are not a confident negotiator, then perhaps consider using a proxy (either a professional or just a savvy friend).

 

[Propertunity]

I'm not going to address your original question of how to deal with agents - I could write a book (except it has already been done). But just to make a few comments about the property you're interested in.

I didn't think agents were still playing games and lying like they used to back when we bought our first house.

Same ole, same ole. Nothing changes.

Does anyone have any tips on how to play the game? I'm not wanting to rip vendors off but just pay a fair price of what I think it's worth.

Just play it straight.

This particular house that I put an offer on had a terrible building report so I withdrew my offer and have made a new lower one.

Perhaps you should have withdrawn your offer and moved on?

The price of the house has been reduced 3 times since it's been on the market

That, in and of itself, should tell you something.

and I'm the only interested buyer.

Uh huh

The owner is hanging out for another $10,000. The house needs underpinning,

May I suggest that since you currently own zero property, that you leave the ones that need underpinning to the experts and the fool-hardy?

new plumbing, drainage, reno's, massive front trees need attention.

Plumbing is a $zero value-adding exercise. Drainage is $zero a value-adding exercise. This is not even something an experienced investor touches.....really, move on.

It's also a deceased estate that belonged to her mother.

So the vendor is emotionally attached, but more money will help her release the attachment...... I see.

I hope this is not something I have to do hundred's of times as it's stressful, draining and certainly dealing with people who are constantly lying and asking for more money is not fun!

Seriously it needs to be fun. If you can't make it fun - consider hiring some help - like a BA with zero emotional involvement, or a property savvy friend, as mattysavager suggested.

There are lots of properties to choose from. Why buy one with such issues?
Please don't tell me "because it's cheap".

 

[Chloe]

Matty, my partner was negotiating which is great as he's hard. He just said this is a fair price because blah blah blah....

She said no, she wants $10,000 more so we said seeya later.

 

[Chloe]

Propertunity the reason i wanted the property was for the location and i'm on a budget.
In my budget I'm going to get something that is either on a main rd, railway line, flat roof, near powerlines, badly sudivided, like just plonked in someone's backyard etc.
This one at least is none of these things but needs all of the things i mentioned previously. I offered $360 and she wants $370. At first she wanted 400!!

 

[mattysavager]

That's all you can do.

Either pay a price that you're comfortable with, or don't. A PPOR is generally worth spending that extra $5,000 on if it's going to make you happy every day that you live there, but an investment is a different story.

If you're at your max price for that house, then stop.

I also didn't mean to target you unfairly Chloe, but I just don't like the constant agent-hating that goes on. If an agent lies to you, then you should report that behaviour to the licensing body in your state. The agent's job is to convince you to reach your maximum budget in negotiations. We are professional negotiators, and you are more than welcome to pay your own agent to negotiate on your behalf. Most buyers choose not to, but then complain when the agent 'plays games' to get their price up. That's just how the world works really, most people want more money.

 

[Chloe]

If the house wasn't going to collapse when we have our next storm then paying a bit more is totally reasonable but when there's major structural damage then the vendor needs to be realistic too.

I didn't take any offence, we all want the best price for our homes but some people are just being ridiculous with their expectations!

 

[saiman]

I know I'm biased - but how does the above scenario make the agent a dirtbag?

You do know that the vendor is paying the agent thousands of dollars to 'sell you into a higher price' regardless of whether or not you are a novice?

Agent's are not impartial mediators. We are employed to maximise the sale price of any property.

I don't have a proper answer for that Matty! For that particular reason you stated, agents are dirtbags when I'm buying, but my best friend when I'm selling (unless ofcourse you have Chloe's scenario where the agent will sooner or later turn around and start selling the vendor into dropping the price because "the markets not right" or some other excuse )

I'm also fairly certain most agents are REALLY employed to maximise the amount of their own paycheck in as little time as possible as the first priority over any vendor or buyers needs

Never ceases to amuse me the amount of times I've been in an agents office with a signed contract and cheque and he/she is on the phone to the vendor trying to convince them to take the offer on the table

 

[handyandy]

At $360k+ with those problems move on.

As Prop has already mentioned none of those issues will add to the value of the property so you might as well go and look at properties in the $400+ range and not deal with underpinning and various other neglected building issues.

I would also suggest that you try and change your approach. From what you have said you seem to think you are in the market for a dodgy property and this is the best find - but it is still dodgy. Get into a mindset of trying to find a good property and then low-ball you can always go up.

As far as agents are concerned they are human and all humans play games don't play their game don't even subscribe to it.

Cheers

 

[Propertunity]

Propertunity the reason i wanted the property was for the location and i'm on a budget........I offered $360 and she wants $370.

If you buy for $370K and then do underpinning, plumbing, drainage, renos etc AND allow for the inevitable cost overruns, you may be better off spending a little more in the first place.

At the end of the day, if you need a mortgage for this place, a valuer may (probably will) make mention of the state of the property in his valuation report - and the bank may not want to lend money using this property as security for the loan.

In any event, you cannot deny vendors the right to try for as much money as they can get. That's just human nature. You have to do the right thing for yourself and your family too - by not overpaying.

There are other houses to buy.
*edit* I see handy beat me to it.

 

[willair]

She said no, she wants $10,000 more so we said seeya later.

Then the only question for you both to ask yourself is,what's 10 k in the big scale of things,if you can see something that no-one else can see then 10k is nothing if 10 k is a deal breaker then just walk away..imho.

 

[Chloe]

Other agents (that don't work there) have mentioned that anything in that area under 400 is an absolute bargain even if it needs work. The bank have done a valuation for the loan and land value alone is $300,000.
This is one of the reasons that this is sending me into a state of panic and confusion.

From what some of you have mentioned this property doesn't seem so appealing after all, with all it's issues.