Love them or hate them, one things for sure. Property investors would be no where without the help and support of the Estate Agent. We all know the reputation Estate Agents have and although some of it may be unfair, there are good reasons not to just blindly go along with everything they tell you.
The Estate Agent is a deal maker. The reason for concern arises when the agent performs ‘tricks’ to get a deal through. Although no one has any objection to a bit of enthusiasm and creativity in getting a deal through, the problem arises if these ‘tricks’ go against the interests of either buyer or seller.
It is important to remember that the Estate Agent is essentially working for the seller. After all it is the seller who pays their fee. However a good Estate Agent has a duty to remain professional and ethical in his dealings with all parties throughout the selling process.
The question for a buyer is how to cut through all the Estate Agent waffle and get the true picture on a particular property deal. Over the last 15 years of buying and selling property, I have developed a set of 7 questions to ask an estate agent. If you ask these questions, you will gain a greater insight into the deal, and obtain valuable information to help with your negotiating position.
1. Why is the owner selling?
If you are lucky, the estate agent may reveal more than he should about the sellers circumstances and motivation for selling. A motivated seller is more likely to accept an offer below the asking price.
2. How long has the property been on the market?
Has the property been ‘sticking’ on the market? Does this make the seller getting desperate to sell? Why is the property not selling? Are there any problems with the property which the Estate Agent is not disclosing?
3. When does the current owner/occupier need to move out?
Is there an urgent deadline which could be an advantage in negotiating a lower price for the property? If the owner has to move somewhere else they will be keen to sell and get everything settled before they go. If the property is tenanted and the tenancy is coming to an end, the seller will not want to keep the property empty for too long after the tenancy has ended.
4. What is the minimum price the seller will accept?
Knowing the bottom price which the seller will accept will help you formulate your offer. If a property has been on the market a while, most Estate Agents will be very forthcoming with this information.
5. What do you think the property will actually sell for?
This is a bit of a ‘fishing expedition’. What you are looking for is signs that the Estate Agent has a different opinion as to the true value of the property.
6. Who priced the property?
Another ‘fishing’ question to follow-up from the last. If the seller priced the property and the Estate Agent thinks its to high, then when you place a lower offer, you stand a very good chance of having the agent bat your corner. If the Estate Agent has priced the property then they probably will stand by their valuation and push you to offer close to it.
7. What other homes are there in competition to this property?
This is a very useful question provided you get an honest answer! The Estate Agent is looking to close a deal, not open everything wide open with a whole load of new options. You are likely to get an honest answer by taking the property details sheet into a rivals office and asking them! The information you gather will be important in justifying any offer you make.
… And finally.
These questions are very simple to ask. I am not suggesting you use these 7 questions like a script and ask them all one after another. The best way I have found is to engage the Estate Agent in conversation. During your conversation, make sure you cover all 7 questions in whichever order feels natural.
If you get answers to these questions you will be a lot more informed when you make your offer.
Remember that estate agents are just one source of buying below market value properties. I would say only 25% of my deals come from estate agents with the rest being from other sources. Module 6 of the Build Your Property Empire home study course details 30 different sources of below market value property and step-by-step instructions on how you can setup a ‘system’ for yourself, to bring these deals to your table.