Posing as Investor or Owner Occupier?????

[Joe D]

I am currently looking for a house on a suitably sized bock that has potential for duplex or triplex development without demolition of the original property.

I have often wondered whether it would be better to take the wife and two small children along and pose as a potential owner-occupier buyer to the agent or whether to maintain the ‘buying-for-investment’ speel I normally adopt.

I have normally been in the investment buyer category, however, as mentioned in previous posts, often the agent is so uniformed as to investment–buyer requirements. Couple this with the expectation that an owner occupier will usually buy on emotion and be seen to paying top dollar.

The reason I ask is that whilst in discussion with an agent at a recent property inspection, the agent quite categorically stated that he would not be doing his job by the vendor if the property sold to a developer. Whilst I agree with his sentiment, and whilst I am not the ‘typical’ developer, it made me think how do others present themselves to show they are truly serious about an IP without appearing like a low-bid investor-type?

Any comments welcomed.

Joe D

 

[see_change]

Depends whether you want the frustration of having to take two small children through lots of houses

We covered most ground when we had the children with friends or grandparents and we went in different ways looking at two lists of houses.

Once you know what you want it takes a minute to see if a house has potential.

I had a similar target as you , though we were aiming for a dual occ or subdivision where we could leave the original house intact.

A good agent will help you find what you want , but not all agents are good. When an agency had several agents working for them , we compared notes on which one we felt was going to be most helpfull for us , and then we would aim all our enquiries to that agency through the one agent. We would ring up that agent up each week about what was coming on the market.

The house we ended up buying was on 3000m2 but that was not mentioned in the add because the vendor thought that people weren't looking for big blocks nowdays , so he specified to the agent that he didn't want it mentioned..... We only found it because between us we looked ( or drove past ) every house that was for sale in our target area.

If an agent is saying that he wouldn't be doing his job if he sold the house to a developer..... well , I don't think he's doing his job unless the vendor has specifically told the agent he doesn't want to sell to a developer.

If you're not sure what to say , the best option maybe to say as little as possible though I sometime wonder how much agents believe what they're told.

See change

 

[suggo]

he would not be doing his job by the vendor if the property sold to a developer

Why????

Isn't he there to get the best price possible for the vendor??
What's wrong with developers money? Is it worth less?

 

[Les]

G'day Joe D,

>> The reason I ask is that whilst in discussion with an agent at a recent property inspection, the agent quite categorically stated that he would not be doing his job by the vendor if the property sold to a developer. Whilst I agree with his sentiment, and whilst I am not the ‘typical’ developer, it made me think how do others present themselves to show they are truly serious about an IP without appearing like a low-bid investor-type?


Really??? Does the agent own property in the same area? Don't developers push up the land values?? Why would an RE agent feel he was not doing his job by selling to a developer?? Are there covenants on this area?

I guess "low-bid" investors will automatically show themselves at the time of signing a contract ..... But, often, that's an advantage to the RE agent anyway !! As the low-bid can be used to "condition" a vendor .... Frankly, I can't understand where this RE agent is coming from??

Perhaps some comment from our resident RE guru's might throw some light on this....

Regards,

 

[Joe D]

Sea Change, Suggo, Les

Thanks for responses.

Perhaps I didn’t explain the RE’s comment so well. The RE in this instance would obviously be delighted to present anyone’s offer for the property (Offer and Acceptance here in WA) as long as it was reasonable. However, the agent was intimating that if a true developer was successful in having an Offer accepted, the selling price must be pitched too low or at least that he could reasonably expect a homebuyer to pay a higher price given the likely profit margins a true developer would be working on (eg. 20-25++ % )

I don’t like it (from an investor viewpoint)……. but I tend to agree with the sentiment of this particular RE agent although I’m sure a number of agents are more concerned with closing the sale rather than achieving the top selling price.

Suggo, I agree that the agent should be trying to achieve the highest price for their vendor and in this particular case I think he was.

Les , I also agree that low-bids will condition a vendor eventually, however, I don’t wish for any bid of mine to help condition a vendor to some other buyers advantage!

Thanks for comments and I keep looking and learning …..

Joe D

 

[brains]

The way i see it is that for the vendor & the real esate guy the money is the same wherever its coming from, same offer from a developer or owner occupier, same amount, same acceptance.


To think otherwise is commercially silly.

 

[geoffw]

Originally posted by brains
The way i see it is that for the vendor & the real esate guy the money is the same wherever its coming from, same offer from a developer or owner occupier, same amount, same acceptance.


To think otherwise is commercially silly.

I'd disagree with that. Some people are willing to pay more than others. That's why there's discounts at movies- to get more bums on seats, aiming at those who would not go to the movies at full price. A developer may well be willing to pay more than a house buyer- and it would be the REA's role to determine that, to get the maximum amount for the client.

 

[brains]

Geoff,

Fair enough, but whats the differnce between a $250k offer from a developer and a $250k offer from an owner occupier?

Money is money in my book.

Especially if the price is already above what the vendor wants.

 

[geoffw]

Brains,

Joe said

the agent was intimating that if a true developer was successful in having an Offer accepted, the selling price must be pitched too low

which would imply maybe a $250K offer from a private person would be the max expected, but perhaps a developer could be pushed to maybe $275K.

 

[manny]

Howdy there,

I tend to like posing as a home buyer when inspecting a property (when I don't know the selling agent) & don't mention any good points of the property (ie. subdivision potential, etc.)... if anything I tend to point out as many negatives as possible... it has worked well so far...

I must say if I was a vendor & got a better offer from a developer I know which offer I'd personally prefer (the extra $$$)...

Cheers,

MannyB.

 

[see_change]

Joe

Outside what's already been pointed out , that for a developer the , the property may actually worth more , you seem to be making another assumption . namely that all developers are competent .

There are people out there who consider themselves developers, but in reality have no idea what they're doing, and upto now have been saved from financial oblivion by the fact that prices have been going up fairly rapidly over the last few years.

As has been shown in the stock market , a Bull market turns many people into "experts", but their true ability has been revealed by what has happened since APril 2000. The same is likely to happen at some stage soon in the property market.

see change

 

[Jas]

Originally posted by suggo
Why????

Isn't he there to get the best price possible for the vendor??
What's wrong with developers money? Is it worth less?

Suggo,
People who have lived in their house for many years might well have an emotional attachment to it. They don't want to see it knocked down. They want it to give other families joy (like it did them).

Jas

 

[Kevin Hockey]

It's not an agents role to determine what offer an owner should ultimately accept, it's our job to present all offers and then negotiate it with the purchaser on behalf of the owner to achieve the highest possible price.

I know an agent who decided an offer wasn't good enough for an owner, wouldn't present the offer (which is unlawful) and when the owner changed agents it was sold for less than the original offer. How is that representing the owners best interest. Our job is to negotiate offers and advise an owner of our opinion but not to make their mind up for them.

Developers are often able to pay a higher price for a property anyway and if their offer is the best it should be presented. It's up to the local council to decide if their development is suitable to the local community.

www.nundahrealestate.com.au

 

[brains]

If i was the vendor and i had an offer of $250k on the table (and i wanted $250k) i dont care if its from a developer, an investor, the hippy up the road or the queen of England, id just say yes or no.

I cant see why it matters, vendors have a figure in their head of what they want for their property, what does it matter where its coming from.

Real estate agents play games, certainly it sounds like this one is.

As a buyer i go in as an investor (unless im buying for my PPOR then i go in as an owner occupier) cause i cant see what difference it makes, i have a max price i'll pay for a property and thats that.

What if i went in pretending to be a poor broke renter or a rich dude in a Ferrari, i dont think i'll get the property any cheaper or dearer, i might think i have for that reason but i havnt.

I might sound a bit simplistic about this, but honesty works for me and i believe in the KISS principle.

 

[bbruham]

G'day all,

Brains is right! The real estate agent doesn't care who buys the property as long as it sells for top dollar.
Went to a FREE Henry Kaye seminar a couple of years back, he
said always wear a suit and carry(exposed) your cheque book.
This way the RE will take you seriously, and you are in a good position to bargin a price to your advantage.
Sounds good to me.
The only thing I can remember from Henry Kaye's seminar.

Bruce G.

 

[kierank]

Originally posted by bbruham
G'day all,

Went to a FREE Henry Kaye seminar a couple of years back, he
said always wear a suit and carry(exposed) your cheque book.
This way the RE will take you seriously, and you are in a good position to bargin a price to your advantage.

Bruce G.

Bruce G.,

Are REs that thick that if you wear a suit they will take you seriously!!! Can you give us their names so that I don't waste my time on them!!!

 

[see_change]

I have observed this in action.

Have dropped into open houses when I have not been planning to while "dressed down" and have had major problems getting agents who don't know me to pay attention to me. If they know me , I will say that I was ducking out to the hardware store when I saw their sign.

I hate suits , so I when I'm looking at houses I dress in "smart casual " clothing and rarely have a problem, though there are occasional agents who you have to wonder as to whether they really want to sell some houses.


see change

 

[XBenX]

I dont "dress" for an inspection - I just wear whatever im wearing for that day. (Id did a fw inspections last week in barefeet)

Agents normally look at me like a teenager inspecting with his parents (ie parents are buying the family home - i swear they look out the door for the "real" buyers to follow me in ) or just a time waster and therefore leave me alone

This is exactly what I want - I rarely go to properties without planing to - I normally have comparable sales and rentals for the area in hand

So after being left alone to inspect the property without an agent in your ear You can have a chat and ask questions when you feel like it,

if the agent isnt paying me attention Im normally very blunt and ask them if they valued/listed the property - usually i then laugh, ask them whether they consider themselves a good valuer and why they valued the property at that price. Then Ill show them my sheet of rpdata printouts with low surrounding sales ...

By this stage they are hating me but also realising im a serious buyer and it also is my own form of conditioning the agent for my low offer

 

[asy]

I'll sell you a house seech, anytime!!!

I don't care if you are wearing stubbies and thongs.

I don't care if you are wearing a suit.

I don't care if you carry an exposed chequbook (although I will probably think you are a di*khead...lol)

I don't care if you want to develop the house or move granny in.

I don't care if you want to run a pixie farm on the property (STCA).

JUST SHOW MY VENDOR THE MONEY.....

Sheesh...

WHY can't some agents get it through their heads that they are not there to play God. The are there to get the BEST price for the vendor.

My favourite EVER sale (and I think you have all heard this story... ) was to a really nice guy who was a V VMC bikie, and the other (read... idiot) agent in the office took one look at him and said, You can have this one, Larysa... I sold him a house, he was thrilled, as was my vendor (who had been having trouble selling this house because of the pharmacy the previous tenants had been running). They were both thrilled.

This guy didn't LOOK like he had 50c to his name, but he was just about to receive a HUGE pension from the USA army.

Looks can be deceiving.

I say Treat people as you would like to be treated, and things will usually go well.

anyway, that's my $.02 worth.

asy

 

[see_change]

XBenX

Re " By this stage they are hating me ........ "

Every one has different styles , but personally I see no point in going out of my way to aggravating agents. Any where I consider buying one house I will consider buying more houses.

An agent who knows what I want , and doesn't think I'm a dickhead is much more likely to put a good deal my way than someone I've gone out of my way to question their professional judgement and imply they don't know what they're doing. I have had this happen to my benifit over the last months picking up two houses around 65k in the logan area while everything else was going for 75 plus. .

You can Low ball and be nice while you do it. Being friendly doesn't have to indicate a lack of strength of will.

One of my favourite machieveliian quotes comes from Yes Prime Minister. Sir Humphrey , went out of his way to praise something that his assistant, Bernard , knew he was opposed to . When queried about this , Sir Humphrey replied " you have to get behind someone to stab them in the back..."

see change