It can be an exciting time when buying real estate, can't it?
As I've said before, though, successful property investment should be less emotional than buying a home to live in.
The thing is one of the worst times for this to happen is in front of a selling agent.
Why is that?
Quite simply, a real estate agent is selling the property, but at the same time, they're also gathering intel to pass on to their vendor client.
And that information, especially when the property is being sold by auction, is golden and should be kept mostly to yourself.
That said, it's a fine line between wearing a poker face and showing the necessary enthusiasm when investing in property.
Let me explain.
Smart investors have a strict budget – and they stick to it.
Now that number should only be known to them and their property team.
One person that shouldn't be aware of your exact budget is the sales agent.
Let me be clear: agents are on a mission to find out as much useful information about potential buyers as possible.
And that includes their budgets.
In other words, a real estate agent wants to know your budget so they can use that during negotiations.
Let's say you have $800,000 to spend and you're looking at a property that's priced with a seven in front of it.
What should be flashing through your mind is this...
If the agent knows you have more money to spend, they will attempt to extract it from you at the final sales price.
The secret is to give a more general answer to the budget question such as: "I'm looking for properties around this price."
Just like the timing is crucial in-jokes, so it is in real estate transactions.
And that's why a real estate agent will try to elicit this information from you.
Likewise, it's wise for you or your buyers' agent to get an understanding of the timing requirements of the seller.
That's because the vendor might need a quick sale or is after a long settlement, which you can use in negotiations.
- Also read:Here’s how to avoid these 12 common reasons property investors fail to build a Multi Million Dollar Property Portfolio
- Also read:Heat comes out of the housing market as values across Melbourne dip and Sydney slows | Corelogic Home Value Index
- Also read:Latest property price forecasts for 2024 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Sydney property market forecast for 2024
- Also read:Home Price Growth Still Strong Over November | Latest Housing Market Stats
In the same vein, an agent will attempt to know whether you need to find a property quickly, perhaps because you're already sold your own, and may use this information to speed up proceedings.
It's always better to take your time and consider the pros and cons, rather than make a hasty decision to solve a short-term problem.
It's a fact that most investment-grade real estate is often listed with a price range or no price at all.
Now that's because the properties that are most in-demand will attract the highest prices.
And sometimes that price is hard to predict beforehand.
Let me explain: the market will always dictate property price and it's usually an emotion that drives that price up.
That's why you should never suggest price specifics with an agent because your numbers might be much higher than the vendor was actually prepared to accept.
And it's doesn't take Einstein to work out that an agent will use that information in negotiations.
Instead, because you would have done your research, you could discuss comparable sales with the agent so they know that you know what you're talking about.
Sure, buying property is about matching a property with a new owner.
But that doesn't mean it's like dating.
Telling the agent you're not interested or giving them the silent treatment won't do you any favours.
Here's why: the agent is working for the vendor but to do a good job they have to find a suitable buyer, which involves communicating with interested parties.
Don't get me wrong: we're not advocating playing hardball when investing.
The main point I'm trying to make is that you have to give a little to possibly receive a lot.
And that means communicating with the agent during early negotiations so they know that you're interested.
That way, if there is a multiple offer situation, you'll have your hat in – and not out – of the ring.
The lesson from all of this is that successful property investment shouldn't be like a game of high-stakes poker.
While you don't want to be the buyer who loudly protests your love for a property or tries to outsmart your competition by pointing out its various faults, you have to be in the game to win it.
And that means being professional in your dealings with the agent while keeping your aces close to your chest.