Why do agents ask this question ?

Hi all - I'm 28 and put an offer on a 2bed apartment today which will be my third in hopefully many more IP's to come. I'm starting to feel more and more comfortable with the process of negotiating with agents but they still make me nervous as I get somewhat intimidated with people in this industry who know more than me.

One of the first questions the agent asked today was ' Is this property to live in or for investment ?'

I have had this question with other purchases but this agent has asked this question twice in the process to which I have subtly avoided giving a direct answer too.

Is the agent just trying to find out if I am a cashed up investor who he could possibly negotiate a higher price with ? Or is he looking for a profile on me to present to the vendors ? I am not sure why he is so keen on finding out this info ?
 
Is he just making conversation to try to find out more about you?
Maybe he has other properties for you to look at?
 
I guess they want to know what kind of things you'd rather hear about the property... choose 'investment' and they'll talk up the rent achievable, capital growth, etc. Say 'to live in' and I guess they'll talk up whatever it is that makes people feel at home in a particular property.

I don't like being asked, and usually avoid answering.
 
is he looking for a profile on me

I can't say for sure, but I think profiling you would be the most obvious reason for the question.

Depending on your purchase reason he may pitch reasons for you to buy differently, ie investment he might look to returns or where you can spend some money to increase rent or even offer his own services as a PM. If you're looking for your own home he might be more likely to try and pitch the lifestyle, amenities and nearby attractions.

Not only that, but it's a conversation starting question.

edit: beaten to the punch :)
 
I always tell an agent it is for investment purposes. If it were my main residence then they pull out the emotional tricks and they know that if it is an investment and you make a low ball offer then you don't really care if someone says no and you move on to the next deal. With a PPOR there is much more emotional attachment and they can play up to that. Telling you how these period homes only come along so often. How rare it is to have a carspace in the particular suburb. Usual ********.
 
One of the first questions the agent asked today was ' Is this property to live in or for investment ?'

I always used to get this question as well, and I always gave them my stock standard reply :

"What I intend to do with the property after settlement is of absolutely no concern to you or the Vendor. Now, if you wish to make a sale, I suggest you stop asking me questions and start answering my long list of questions.....here's my Due Diligence form, start filling out the details whilst I go for a wander about the place."

If you are intimidated by REA's.....you'd better get over that pretty quickly, cos they get eaten for breakfast in the big pond where all the barracuda's swim.
 
It may be for many reasons. I ask for several reasons such as:

1. The owners may be looking for a rent back.
2. He/she may be a pro active employee for the company and may wish to introduce you to the property management department, to further assist you with management. (previously mentioned)
3. He/she may have a good team of people to assist you i.e. quantity surveyors, accountants, financial planners which could assist you further. If they don't know your situation or how experience you are they may not be able to assist you properly.
4. He/she may be looking to establish a long term relationship as good relationships with investors are valuable.

I sell real estate for a living and I ask the questions for these and many more reasons. I spend allot of time with and database investors, as relationships with Investor's is more a part of my business plan and business model and I try my hardest to establish relationships with as many Investors as possible.

Its not a bad thing letting them know what you do, and wouldn't be so hesitant or defensive as they may be able to help you and maybe an asset to your future of purchasing more and maybe better IP's.
 
Thank you all so much for taking the time to reply, you have all well and truly answered my question and provided me some food for thought.

Fingers crossed my offer gets accepted !
 
I try to get both angles from the agent - so I say "initially it will be for investment, but I might live in it later" :D

Cheers,

The Y-man
 
My favourite response (only said it once so far) is "not sure yet". :p

I do that one too! :)

Generally if you say "to live in" they try to make you all in love with the features etc.

If you say "investment" they give you the rental expectaitons, ease of maintenance etc.


Cheers,

The Y-man
 
QFS,

What the agent did was to scan for genuine buyers from the many passer-by's they deal with every day. They try to quickly get answers to the following three questions:

1. Is this the right property for this buyer?

2. Has the buyer got the right money?
(No point of selling $300k property to those who can afford $200k max)

3. Is the buyer ready to buy?

They only want to spend time with the buyers who get "Yes" to those three questions. Other than that, those buyers are not in "Serious" stage.
 
i think Dazzling's method is pretty good... albeit abrupt :)
It would certainly make the REA know that you are serious, and experienced with buying investment property.... all the things that Peter Spann and Michael Yardney try to teach you to be in their books.

Certainly cuts out all the bullcrap and gives you the answers you want, and I would think as a by-product you would possibly be put on a "serious buyer" list at the real estate agency and be offered future properties on priority, if the REA was any good at their job.

Well thats my thoughts anyway, but im not as experienced as Dazzling. I usually tell them its for investment, and then cut through their questions with a barrage of my own questions...
... my biggest one being "as an investor looking to make money from property, why should i chose this property over all the other similar properties I am looking at this weekend with the same features?".... that usually has them thinking for a while. The stupid ones will just repeat the same tired sales pitch, at which point you just stop listening :)
 
I'm not sure why the question and your answer is of any consequence to buying or not buying? You wouldn't believe what the agent was telling you without cross-checking anyway (or having done your research in advance) so they might confirm what you know anyway (yield, features etc.) or if it's new stuff you go and check it out.

Or you might even have a good chat with the agent because you found a good one who's an investor him/herself and might tell you something you didn't know. I can't see any disadvantage with being honest about your intentions re. investor or owner occupier, at least not for the places I've looked at.

kaf
 
I used to ask this question when I was a selling agent, especially if the property was tenanted. There are several reasons for this.
Someone who answers 'I don't know" is either just looking to fill in some time, a neighbour curious about the values, lying, or trying to avoid agents hassling them. Property purchase is a big commitment and people generally have a reason for buying. What level of service and customer care would you expect if you walk into a restaurant and order 'just some food'
A prospective purchaser looking to owner occupy may not be in a position to wait until the end of a lease to move in. Many buyers don't understand the binding nature of leases or the ways around them.
The information on vacancy rates , rent returns, depreciation etc will be irrelevant to an owner occupier.
I would introduce any investors who are interested to our property management and point out the advantages of professional management to them.
If the buyer doesn't purchase the property, if I gain an understanding of what they are looking for and what they hope to achieve, I may be able to assist them with another property.
I have steered buyers to some good deals listed with other agents without making any commission myself, just because I like to help and the buyers were friendly.
Not all agents are dishonest money hungry sharks. People are people no matter what their profession. I think that being honest and polite goes a long way in any arena.
 
Over reacting

I think some of you are over reacting. The agent is qualifying a buyer and engaging in a conversation with you. He/she does not want a deal rejected later on. They are commission based, they also are payed by the vendor. Think about if the agent does not talk, does not qualify a buyer... Would you employ them to sell you property? Treat agents with some repect.
 
I don't know why but I get picked as an investor every time!!! Its probably because I am usually looking at a block of units rather than one and am slightly older than most....:D

The question I get asked is "What do you think. Are you interested?"
To which I reply "Depends on the price"

This usually gets a good rapport with the agents and I have made some good contacts this way, I am being straightforward and honest and they then try to give me an accurate assessment of what it will go for, so then we are not wasting each others time. If its in the ballpark then I go through and do my checks and get a builder in to give me an assessment of what the costs involved will be to bring them up to scratch.

I believe in honesty and expect the agents to be the same. Its amazing how well that works.

Chris
 
It may be for many reasons. I ask for several reasons such as:

1. The owners may be looking for a rent back.
2. He/she may be a pro active employee for the company and may wish to introduce you to the property management department, to further assist you with management. (previously mentioned)
3. He/she may have a good team of people to assist you i.e. quantity surveyors, accountants, financial planners which could assist you further. If they don't know your situation or how experience you are they may not be able to assist you properly.
4. He/she may be looking to establish a long term relationship as good relationships with investors are valuable.

I sell real estate for a living and I ask the questions for these and many more reasons. I spend allot of time with and database investors, as relationships with Investor's is more a part of my business plan and business model and I try my hardest to establish relationships with as many Investors as possible.

Its not a bad thing letting them know what you do, and wouldn't be so hesitant or defensive as they may be able to help you and maybe an asset to your future of purchasing more and maybe better IP's.

I'll second that.

There are some crap agents that can't see past the current sale or the current open but there are other agents that see a benefit of working with investors.

I tell them what I do.

cheers
Graeme
 
... my biggest one being "as an investor looking to make money from property, why should i chose this property over all the other similar properties I am looking at this weekend with the same features?"....

"....ummmmmmm, because this is the one I have on my books at the moment." :p
 
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