Why would an agent quote one price to me and something else to another buyer for the same property?

The language of real estate is ambiguous. This is due mainly to the fact that every buyer interprets information differently. Agents need to make a judgment call on how you are likely to interpret what they say before they say it.

Confused??

How much do you add on to an agent’s price guide? 10%? $50K? $100K? It is a personal thing and varies greatly from buyer to buyer. Usually the amount you add on is a direct result of your experiences in the property market. The agent doesn’t know how much you are going to add on, so he/she is going to quote the lowest figure they can get away with in order to increase the chance that you will think it is within your budget.

Now for the other buyer. The agent may know them better than you. This buyer may have missed out on another property sold by this agent. Maybe the agent has appraised their home and is familiar with their buying requirements. If there is more trust in their relationship the agent can afford to be more honest, hence a different price guide.

So, what is the solution? If you are not dealing with an agent where you have built up a trust relationship, you need to know your market. Do your own research and make up your own mind on the price.

For more information on buying property in Sydney go to www.gooddeeds.com.au.

What does it mean if an agent is quoting $1.3M for an auction property?

If I offer $1.3M will they sell it to me prior to auction?

We have heard this question in numerous forms over the years – so many people get confused by Sydney’s auction price quoting system.

The fact they are quoting around $1.3M really means that they really want more than $1.3M. If the property goes to auction and the best offer they get is $1.3M, they might then sell for that price – but they might not. But for a buyer to buy it prior to auction, they need to make an offer that will entice the vendor to sell before the auction – as all vendors hope to get competition that will give them a price over their reserve. (I am not even going to venture into the area that deals with what price the agent put on their vendor’s agency agreement).

Without having done any pricing research on this property, I would think they’d be thinking at least $1.35M to sell prior to auction. But if there are other interested buyers, this figure can climb. For example, recently we had a client interested in a property that was being quoted as $940K+. I spoke with the agent about an offer and was advised that other buyers had indicated around $1.06M (a big jump, I know, and there were comparable sales to justify this). My clients were very keen on this house and decided to offer just over $1.1M. This would have bought it, had there not been at least three other buyers prepared to pay similar money. In the end, we secured it for $1.125M – and believe it or not, there were two other buyers then prepared to pay more!!

I hope this makes sense? It doesn’t make sense to me half the time…

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Real estate buying stages.

Trying to buy a property in a sellers’ market is no walk in the park. We meet buyers at all stages of the purchase cycle – do you recognize yourself in this list?

1. Optimism – this is fun, you are excited, and nice to selling agents
2. Disappointment – first auction goes 20% over what you thought it would sell for
3. Disbelief – at what people continue to pay
4. Anger – at selling agents for under-quoting, at other buyers for over-paying
5. Resentment – you pack up your toys and stop playing for a while
6. Resignation – that the market is continuing to rise despite your lack of participation, you still want to buy after all
7. Desperation – you try to talk yourself into anything just to get into the property ladder and get your Saturdays (and sanity) back
8. Wisdom – learn from your mistakes and/or get expert help!

For more information on buying real estate in Sydney go to www.gooddeeds.com.au.

Common mistakes by real estate buyers.

Many of our clients come to us after a string of disastrous attempts to navigate the property market themselves. Here are some examples of common mistakes that we come across.

• Giving the selling agent too much information. Putting you at a disadvantage when negotiating.
• Not giving the selling agent enough information. How many people have missed out on a property because the agent did not know they were interested? The art is in knowing what to say and when.
• Panic in a rising market and buy foolishly. As Louis Christopher said last week, “Remember lemons are very hard to sell in bad markets." But we see plenty of them selling at the moment.
• Panic in a rising market and don’t buy at all. Of course the market will level off at some stage, but how much will prices rise before that happens?
• Keep increasing their offer without a counter-offer from the vendor. This is not the way to negotiate with an unrealistic vendor.
• Leave too much time between getting an offer accepted and being ready to exchange contracts. And leaving the door open for another buyer to snap it up.
• Allow the auctioneer to create a rhythm. Before you know it you have bid over your limit.
• Let the fact that other people are bidding confirm what the property is “worth”. Instead of doing your own research.
• Believe what the agent is quoting for a property. Buyers largely determine what property sells for in this market and there aren’t many that tell the agent what they are prepared to spend.

There are many pitfalls for the unwary and the weary. And it is so easy to get caught up in the general frenzy and lose sight of what represents value for you.

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Why we recommend property investors engage a managing agent.

I could manage my own investment properties but choose not to. The reason is that tenants have a whole bunch of rights and landlords have a whole bunch of obligations that most are probably not even aware of. So, a good property manager can help keep you out of tribunal (or represent you if necessary) and ensure that your interests are protected at the same time. It’s not just money for jam…

Also, even though I have often lined up my own tenants, I always pass the management onto an agent so that I can keep at arms length. I am busy working in my own area of expertise and don’t want to be bogged down with tenant issues (sometimes there can be plenty).

And talk to your accountant, as management fees should be tax deductable. You can also get all the bills directed to the agent and get one annual statement which you just pass onto your accountant. Simple!

For more information on buying an investment property in Sydney go to www.gooddeeds.com.au.

Why use a buyer’s agent?

This is a question many people ask, and here are just a few reasons:

Have someone on your side representing your interests.
After all, the vendors have the selling agents looking after them! Using a buyer’s agent is a great way to level the playing field. You wouldn’t represent yourself at court, would you?

We can save you money.
The ways that we can save you money are many and varied. Obviously, we are experienced negotiators and bidders, but we are also able to develop strategies for every property we purchase that minimize competition and therefore lessen the price our clients will need to pay.

Our local knowledge helps you avoid hidden pitfalls.
Many streets or areas are shunned by locals yet appear to be utterly normal to the uninitiated. Because we specialize in Sydney’s Inner West and Inner East, we have developed the knowledge that allows our clients to avoid making costly mistakes when purchasing a property.

For more information on how a buyers agent might help you go to www.gooddeeds.com.au.

Beware the friendly selling agent.

These guys are usually great at their job (these guys are usually, in fact, girls). They are great at lessening your pain threshold when it comes to parting with your money. After all, we buy from those we like.

These are the agents who return your calls, answer your questions with sensible answers, even follow you up after you have inspected a property. These are the agents who are very skilful at encouraging you to make offers, register and bid, even pay more than the asking price.

So here’s a thought, maybe you will save money by persisting with those agents that annoy you, irritate you and generally give agents a bad name. After all, there will be plenty of other buyers who will avoid dealing with them, so possibly you could avoid some competition.

For more information on buying property go to www.gooddeeds.com.au.