Rental Estimates: Agents put their money where their mouths are?

[Property Meister]

This is a semi rant.

I never 100% trust what an agent says, so most of the time, if its subjective, I usually switch off.... eg the market is hot now, this is the bargain of a lifetime, I have 4 people putting offers in today. Blah Blah and to find it unsold 3 months later.

When speaking agents, if its UNtenanted, I always ask what their rough estimate of expected rental should be, 110% of the time its 5-10% more then what every other one in the street is renting for. Naturally, I always subtract % to get the REAL rental.

Eg today I spoke to an agent who said that the estimated rental for a particular property is $385-$395 per week max, when actual rental for similar ones all in the same street are about $320-$330 per week.

Naturally, I always have a chuckle after I hang up the phone...

Has anybody/can it legally be done to ask the agent to put his money where their mouth is...

eg. I will take this property at the asking price if you are able to guarantee me a tenant at the rent you have just BLAH BLAHed about since the rental demand is so high, and since its the best area, and since its the best time to invest and since you are the best agent in the area and since you keep on telling that this one si much better then the one next door

I would love to say this one day, and see them squirm out by giving their 10 excuses....

Has anybody done anything similar???

 

[twobobsworth]

I think it has something to do with them wanting to sell the property.

 

[Sunfish]

I think it is a legal requirement in Qld that the selling agent cannot give such an estimate.

The request is passed on to the rental devision which gives an appraisal in writing which you can attach to your loan application. It seems to work. In my very limited experience the estimates have been realistic.

 

[Propertunity]

What Sunfish said x 2 - and the same for NSW.

I always get it in wrting from their PM department.

 

[Collector]

I think this works both ways.....

Sure sales agent like to stretch it out a bit - no doubt.


We are often asked by purchasers to be generous with our estimates regarding possible rental returns, the purchasers seeking finance require rental appraisals for the bank often ask us to put down a certain figure that which is not achievable.


In our office we have the PM (me) access each property when it is listed for sale, this estimate is written on file and is the only figure quoted when requested by a potential purchaser - this is the same figure we put in our market opinion to the purchaser for the bank.

 

[travelbug]

In our office we have the PM (me) access each property when it is listed for sale, this estimate is written on file and is the only figure quoted when requested by a potential purchaser - this is the same figure we put in our market opinion to the purchaser for the bank.

Great idea.
I find it poor research if an agent doesn't have an idea of what the rent would be.
Some agents under estimate. You can tell these ones by looking on Realestate.com. (rent section).

They can say what they like as it's an estimate.
There's a clause in the contract (standard) covering things said by agents.
If it's not in writing take it with a grain of salt.

 

[BayView]

Most rental departments put out a list of their available rentals with property type and price written on the sheet.

Go around to the different agencies in the area and ask for the list.

Or, call each agency and pretend you are a prospective renter and ask what they have available for a particular property type (the one you are interested in buying) and see what they rent for.

And, you are right; subtract 10% off their estimate to get a more realistic figure.

 

[buzzlightyear]

I have seen some selling collateral for properties actually indicate a rental range (with the usual disclosures). But in almost all cases in my experience, the selling agent either doesn't know/care or defers to their property management area for a rental estimation.

It only takes a few mouse clicks to get a pretty good understanding of rentals in anycase.

 

[csc]

I think it is a legal requirement in Qld that the selling agent cannot give such an estimate.

The request is passed on to the rental devision which gives an appraisal in writing which you can attach to your loan application. It seems to work. In my very limited experience the estimates have been realistic.

maybe illegal but that doesnt stop most of them giving an appraisal of possible rent return....i actually saw two who had the hide to put it in the paper this week regarding a vacant property............$$$$ talk and they will use any method to flog a property...still..............agents are scum..always will be in my opinion....most would rip their mother off if they had the chance

 

[travelbug]

...........agents are scum..always will be in my opinion....most would rip their mother off if they had the chance

Funny, I never used to think this. BUT the more I deal with them the more I'm starting to change my view.
There are some great ones but the tides are turning.

I went to an auction 2 weeks ago. We were told a $220K price guide. Now I know these are conservative.
It had a 2 year Govt lease so that got rid of the FHB. The rent is $50 under market rent. The agent said this would be reflected in the price. Ave unit same in the area would be $250K.
Went to auction, turns out Agents have a controlling interest in the unit (whole block actually) Small mention at end of contract.

They asked for offers over $270K. No-one. $260- No-one. Started getting really rude. We know there are people here. This is a great unit etc etc. Bit over the top. Then Really rudely stated we will not start below $240. No bid. The end.
I guess they were just testing the market.

They sold one the same for $184.500 in January.

It just urked me because I wasted time getting my solicitor to read the contract, contact their solicitor re clauses etc. Now I feel I can't ask my solicitor to do that again for an auction in case I don't buy. Now I know why lots of people avoid auctions.
The whole process (5 properties auctioned in their office) was a bit of a circus. People talking loudly. Agents running in and out yelling over people.
Crazy.

 

[marg4000]

We had the opposite experience with one IP - it was rented at $60 per week ABOVE what the agent had suggested was fair rent. Naturally we didn't complain. PM said that the selling agents usually have not much of an idea about rentals.

But these days with realestate.com.au there is a quick and easy way of checking just about anywhere in Australia to get an accurate view of what sort of property attracts which rent.
Marg

 

[eternit]

Selling agents I have dealt with always quoted way under the market rental for the property and I think its because they dont actually know what the rent is. They are trying to sell the property and dont care about the rent as such.

I would be looking at other rentals in the area and talking to lots of Property Managers to find out how much a property will rent for and make your own conclusion.....

 

[csc]

Funny, I never used to think this. BUT the more I deal with them the more I'm starting to change my view.
There are some great ones but the tides are turning.

Mark my words you watch the real vulture in an agent come out once the FHB bonus is over and the market starts to go sideways and stall with buying volume...........they will eat each other up and not think twice about it!

They will steal each others listings, be it from another agent or inhouse even especially when a property is marketable and valued to be a real seller...........Only the strong will survive...Any mug could have made a killing over the past seven years selling r/e, even a blind man with his labrador could put a price on a house and sell it quickly!

Its when the market becomes tight which it will for sales will they try any avenue they can to close a deal..

Sit back and watch the fun over the next few years!

Many think the market will about face and head north again soon but I am confident it wont for several years at least..........

When inflation kicks in, rates will go up and quickly, the market will falter and FHBers, not all, but quite a few and those overcomitted investors will bail.......thats the time to grab the real bargains in my opinion....not right now!

 

[andrew_de_a]

Mark my words you watch the real vulture in an agent come out once the FHB bonus is over and the market starts to go sideways and stall with buying volume...........they will eat each other up and not think twice about it!

They will steal each others listings, be it from another agent or inhouse even especially when a property is marketable and valued to be a real seller...........Only the strong will survive...Any mug could have made a killing over the past seven years selling r/e, even a blind man with his labrador could put a price on a house and sell it quickly!

Its when the market becomes tight which it will for sales will they try any avenue they can to close a deal..

Sit back and watch the fun over the next few years!

Many think the market will about face and head north again soon but I am confident it wont for several years at least..........

When inflation kicks in, rates will go up and quickly, the market will falter and FHBers, not all, but quite a few and those overcomitted investors will bail.......thats the time to grab the real bargains in my opinion....not right now!

Are you sure you're on the right forum here? Your attitude stinks.

 

[eternit]

lol i guess your not the type of person who predicted the property boom during the late 90's?

Mark my words you watch the real vulture in an agent come out once the FHB bonus is over and the market starts to go sideways and stall with buying volume...........they will eat each other up and not think twice about it!

They will steal each others listings, be it from another agent or inhouse even especially when a property is marketable and valued to be a real seller...........Only the strong will survive...Any mug could have made a killing over the past seven years selling r/e, even a blind man with his labrador could put a price on a house and sell it quickly!

Its when the market becomes tight which it will for sales will they try any avenue they can to close a deal..

Sit back and watch the fun over the next few years!

Many think the market will about face and head north again soon but I am confident it wont for several years at least..........

When inflation kicks in, rates will go up and quickly, the market will falter and FHBers, not all, but quite a few and those overcomitted investors will bail.......thats the time to grab the real bargains in my opinion....not right now!

 

[BayView]

Selling agents I have dealt with always quoted way under the market rental for the property and I think its because they dont actually know what the rent is. They are trying to sell the property and dont care about the rent as such.

This just illustrates the lack of selling skills of the agent/s, and is also very relevent to their experience.

Ask most 20 year old sales agents about age of property for depreciation purposes, and they won't know what depreciation means. The older, more experienced ones will.

If they really knew what they were doing, and were professional and good at their job, they would understand that some of their customers are investors who want - and need - to know all the investing information like outgoings and rental yields, depreciation and proximity to amenities etc.

I know some good agents who do all of the above for the enquiring prospective purchaser. The info is on hand when the property is put on the market.

One guy I know even has the contact details for the local Quantity Surveyor, Pest Control Company and a few of the qualified Building Inspectors to hand over when he meets an investor. Now, that's professional.