Sydney Property Muppets
34. Exclusive Buyers Series on Negotiations - When to make the first offer???
Welcome to the Sydney property muppets podcast. My name is Kurt Northa. I am a real estate agent Chris welcome. Uh, I'm Christian. I'm the buyers agent. It's like anchor man. Sometimes I feel like there's a teleprompter and you're just reading everything off the prompter Uh, I wish we had the technology for that But we're talking about an exclusive series on a buyers negotiation journey and we do have a buyers agent with us to guide us through Yeah, so we're talking about all things buyers are going through when from when they basically beginning the finding the property all the way to securing it We're going to break it down to a series. So Uh stick with us is going very useful. So if you're out there looking to buy a property now or soon Um go through have a look at this playlist and see uh get some gold out of it I was going to say if you're not looking for a perfect podcast, you found the right place to be That's something else So there's three things we're going to cover off though. It's basically we're going to when do you make the first offer? Correct I'm going to very daunting to ask Uh, if you are going to the first offer, do you make it below at or above guide price? Maybe just give us a good ways above criss a million dollars over Don't use him to buy this. Um, use him to sell. Um, and then what happens once you put that offering Which I think will be a small Snipips and random tip there at the end. So kick us off though I was just going to say please know as well. We're trying to make this as uh Useful but as general as well because every negotiation every time you're dealing with an agent different agents properties They're all different But we're going to try and make this as useful as we can for everyone to give you some frameworks to work with Um, if you don't want to utilize a buyer's agent Correct don't know why you wouldn't all right so kick us off. When do you make the first offer now? It's a very daunting cast right you you like let's Put our listeners and viewers You found a property you like Then how do you determine when you if you are going to make the first one to break and make an offer What are the sort of things you might come to your mind when they Is ripe or a good opportunity to make the first offer or even they tell us once they shouldn't be doing I don't know uh, I think Quick note beforehand you've got to do your research before going into a property You really need to know exactly where this property is in the market And if the guide price the asking price or the range is at value or if it's way too high way too low Where is it because that it's going to play a big heart? You definitely so you so you've identified that you've done into your diligence you've looked at the property You know things things are taken to consideration when you make the first offer It's obviously part of it is that relationship or engaging with a real estate agent Now all art is upstanding as yourself Kurt. So yep, I'm trying to keep that in mind. Please do it's hard I know when I was gonna say when speaking to a real estate agent before you do make an offer Actually have the conversation with the agent first because you might have a relationship with them where you're friendly You know they're trustworthy. It could be the first time you've met the agent but still have the conversation first and always be Open in your conversation. Yeah, reason if you come in and just say look your guide price is way too high Or it's going to be like I'm putting an offer in It's going to piss the agent off quite frankly. Um, so if you try and actually be quite friendly quite amicable Listening trying to have a conversation. You're going to get a general sense I feel of what the right thing to do is if an agent if someone asked me is the owner accepting offers Yep, and I My response generally is if we booked an auction campaign Um being an I say look we're intending on going to auction Yep, but if you've got interest let us know and if something is to happen We will let you know beforehand. Yeah, that generally indicates Um, and I'm meaning that we are wanting to go to auction Um Yeah, you want to go though. Oh, let's say like every every I've said before every with estate agent and everybody's like We all have a playbook ever things you want to fall back on and we know that are tried and true and worked However, the the other part is the buyer on my side although the vendor on your side You know an agent might be historically always go to auction every single time But on this one property they've changed them not changed their mind, but their vendor has indicated them strongly I actually want to sell this before because I've purchased something else and so can't always use history historical events I think we're not shell into when we when would you make that first off? So If you know for me if it's a property that's of interest in looking for a while you know All the characteristics of it and you really believe it's the right one You might want to act faster. Again, you talk to the agent about whether that's right or wrong But other things you've been looking at generally is Has it been on the market wrong the market is short periods on is there lots of people Yeah, at the property is it been on the market More than four weeks was there an auction date? And the auction date was postponed or can sometimes unfortunately people start looking They it's not easy to identify properly that had an auction date and then the auction date got rid of if they've only started looking at that Point in time It's a little tactic really there's there's even say it's now for sale or whatever They won't talk to him saying we had an auction plan and things and people can be who enter that market that time Can't be a bit, I guess unadvised or unsure or not not fully educated and what's going on But yeah, I think if there's lots and lots of people there the property lots of people inspections Yeah, then it's definitely something you need to weigh out when you're making that when the time is right to make that first offer Yeah, I As a rule of thumb involves to give you either property has literally it's a first or second open I wouldn't be rushing in to make that offer and unless you're going to put something well above the guide price Which we'll discuss in our second point. Well, let's get it I think almost under that going. Yeah, I think if if it's a brand new property on the market even in the first week It's had two open homes. I wouldn't be rushing in to make an offer. Yeah, I'd be building that relationship with the agent Because if the agent's got someone that's already Made a really good offer and they're going to try and push up anyway Within the first week generally speaking they're going to try and come back And if you've formed a really good relationship, they're going to be like, well, what do you have to offer? Yeah, just however, if it's into the third fourth week of the campaign And you really like it. You've done you do Fillegence if I can say that word correctly. Yeah, then you may and you really like the property I would then be making that offer. Yeah If you're not sure if you're kind of not there on the property 50/50 I'll be waiting waiting for auction in a way for auction. I'll wait if you're not on the property even Okay, so in terms of making that first offer Do you offer below at or above the guide price now you have some thoughts on guide price or break that down? Ah, yes differences. Yeah, so the difference is you need to work out firstly if it is a guide price So that's a single price and it's going to auction The next point is you need to work out is it an asking price? So is it just for sale and it's got a set price or If it's also going to auction off a sale, but it's a range Once again, you need to work out where you feel the property sits in the market And what I mean you feel I don't mean with your buyers view on pointing out all the negatives Because the vendor is going to be doing the opposite. They're going to be was my property amazing Now I get a lot of complaints sometimes been like prices going over the guide and all that and what you got to realize is the Agents actually genuinely more than likely most times Guiding where people the buyers actually see you value But the vendor may not be willing to sell unless they can get a set number Which is often why we don't we have these massive differences. Yeah, sometimes the agent has deliberately under quoted and all that But I'm talking about in most Instances where buyers see value they're pouncing over it and they get it up ridiculous to wear Yeah, I think and we talked on the information is power Comparable sales what's happening in the market? I think a tricky part of buyers and this is part of where buyers agents Prove their worth is probably not quite often sold recently, but the prices are displaced Yeah, you know, it's so it's on rea. It's on demand. So it's been sold at price and disclosed and that point of data that price Is basically imperative if that's a comparable property you really need to know now You can't call the the agent so it's another thing sometimes I'll say no, it's it's been held Sometimes a buyer has put an offer in they don't want the public to know Yeah, sometimes the vendor's got enough or to learn they don't want to then anyone to know and the thing is It's the quickness real estate is about speed and you need to be able to as a real estate agent Just say I get caught into a property two day like from two days from now or a day from now or even like in Two hours. I need to be able to jump online and be like get all the data as quick as I can And so we have access to portals that allows to access And also secondly even with real estate to real estate agent in other firms There's a level of expect and openness and also with a buyers agent We will get that information even if they said oh the the seller doesn't wish to disclose Chris I've never had one agent that was never not they might have killed Chris I can't take exactly but sold between one million and six and one million six ten No, that's enough for me to know where it's up to right like you haven't told me the exact number Whereas a buyer. I know of call that exact same agent the agent just said it went above the guy Yeah So to try and now on a point to try and give a hint around this if it's within if the property is brand new on the market I wouldn't be offering and it is going to auction. I would not be offering below Yeah, I think You're just going to really piss the vendor on the agent off because it's going to auction for a reason So for me if you're wanting to keep that relationship with the agent and have a chance of securing it You're going to have to go above and beyond The honesty is Mc the multi-time truck tried to do an offer before auction and it's been rejected It's sold at auction for above even if I've offered 15% above a guy price. I don't know which I'm aware to start But he went up offered 15% above a guy price and that's been rejected At auction at him now selling. I don't know. I can't think of one example where it hasn't sold above that level. Yeah, so Rightly so the vendor's happy Bar on the side is a bit upset because they're like I wanted to get a thought 15% about early Quite often the vendor the buyer sorry then in this scenario says more goes Oh, thank god. We missed that one. Thank god. We didn't wait for the auction for that one Yeah, and I'll be like, yeah, but that's that's the new norm. That's the new value You're now still looking Most likely that you secured something else. So I was going to say the property has been on the market for three to four Four weeks you're probably going to be wanting to offer at the guy price or the asking or So what about a scenario? I'm going to just put span the waves here. So the guy price is one point So he probably did in the market three four weeks. Yeah, um, there's an auction just private private sale Um, so as I guide price I'd say to the you know for sale price The buyers looking at that and their maximum budget is 1.275 when I say maximum budget that's the account of the go above that They've gone back into their old kitty bank as a five-year-old picked out the parts and they've got everything together right so in that scenario there If they went forward with a 1.275 offer some agents not yourself but some agents would present that back to the vendor and say we'll keep working to get more money out of them and it could be a really frustrating situation So more often than I tell them in that scenario Offer a bit less keep something the kitty and go for but your process is a bit different So if you and this is where you got to try and know the real estate agent because my processes I like cutting the crap between the tango back and forth and I prefer just off it off or almost your best because If you keep saying all we're at our limit but you keep nudging up going for me I'm just like we're going to keep pushing whereas if you literally come look I've got 1.27 million Yeah, that's all I've got put that on the table and that's your offer What you might do though is with your conditions be like we're going to offer 5% deposit We want a 5 to 10 day cooling off period even 10 day cooling period cooling off period um Because then even if the vendor wants more and as an agent I'm trying to get more from you, but if you're the only buyer I've got on there Then I might come back to you. I will realize that we need to change the conditions We need to be like, okay, can we make it a five day cooling off? 66 w 66 w we can increase the deposit from 5% to 10% sorry go 66 w is 66 w is where there's no cooling off period. Yeah, it's like auction condition I'm shorting the settlement period say release of the deposit So the by the vendor might need that money to go off and purchase something else Um, so that money would stay within trust count. So it's not just off in the ether Um, so there's lots of things but my idea is because if someone comes and offers 1.3 Um or 1.35 and you lose out. I'll rather know quicker And later and if the owner doesn't accept it, you know, you've still put your best foot forward Go and purchase something else. Great. Yeah, and then you can tell the agent being like look This is as much as I can. I'm going to be shopping around And I agree with all the points you said the unfortunate thing is Not that you're a rarity, but you're definitely scarce You know, then I'm a rage is out there in terms of operating that way And I think also for the buy-eds It's a trepidation thing. It's oh how do I start this and so forth and they're almost psychologists like It's like bartering and barley. I'll definitely start low And go up and not realizing all the ramifications that you're not buying a pair of thongs of barley anymore. You're buying a property Lastly, let's try and land this bad boy. What happens Once you put that first offering. What are the what are the two or three things that could come back from there? Or do you want me to cover it off? I reckon you start from a buyer's agent perspective sort of even agent comes back straight away If they don't and what you should be saying to an agent Um from your perspective because it's super easy, but apparently I'm a rarity. I'm scarce. So Well, I think number one if it within 24 hours or longer you haven't heard back You're not going to get the problem with that level and actually most likely your sum distance apart from where it needs to be Um, that doesn't mean stress doesn't mean do extra things it might just mean, you know reach out and touch point with the agent But I will let you know statistical wise you are much less likely you are you are not in the box seat to get that The agent come back in the first 24 hours or you're going to say thanks so much, but we're going to go to auction No, no, it doesn't matter about that on forehand. Thanks much. The best situation This is for later and part of this series. I'm going to talk about counter offers So and particularly a counter offer from the vendor So for me always when they when you receive a counter office they come back and say I appreciate your offer of You know one people keep in the same numbers 1.3 vendors come back and say look if it's 1.4 Got a deal done Then as long as you got the money in the kid and make it work You can probably land that somewhere between those two numbers if you feel comfortable to do so if not then obviously you walk away um That's going to say another point there around Oh Yeah, just in terms of If and if the agent comes back with that sort of with a number You know, it is highly likely you're going to get A transaction to be to occur There's a higher chance so one thing I want to be aware of is the vendor might be working really well with the agent And if the agents come back with the number you also don't realize You need to take into account how many other people are on the property because what the agent could be doing and as every right to do Is being like just say those five people They they might have liked you the best or just realize they could kind of work you just to be like You know want you to potentially you know get the property, but They're only dealing with you. Yeah, so they're telling the other four people were looking at going to auction If something used to happen beforehand, we'll come back to you The owner has said if we can get to 1.4. We're out of here. So we're trying to work with one buyer Generally change that goal generally it would be a bias agent because we know that we know that we can trust them In terms of they're going to understand the situation And they're going to be like look we're not at 1.4 or we can get there Once we get to a close enough level With the vendors also happy to say we like we might go look we've got this buyer up to 1.37 They're not going anymore What do you want us to do? Yeah, we're so close at the number. Do you want us to get the contract ready? It's fine. Yeah x1 z Then once that's all already except that it's not executed You then go back to the could go back to the other parties to be like i've definitely i've an agent Say to me. I will do the right thing. Give every other buyer an opportunity. I'm giving them two hours Notify on three o'clock on a Friday another offer and if they happen to submit an offer with a signed contract by five o'clock on the Friday They're out of there Now and then i've actually had one of those other buyers who's then missed out reach out to me I'm said not knowing that I did the deal And then I was able to share with them well actually yeah, that's because they had a bias agent in their pocket. So um, so I think so I just So three things have happened here. They're not going to hear back You want to hear back and it's going to be an option or it's actually quite a messy I think that's where there's a variety of tangents and again good news is of this series. We're going to really cover off Yeah further and the one thing on that last point I want to say some people might also from that last example say You know the real estate agent the selling agent is not working for the buyer Now they need to be they need to be fair in following the laws and the ethics and not telling not telling lies But the idea at the end of the day is They're to get the most money for their client and they're going to use what tactics They can within the laws to be able to get the buyers up as much as they can So that's why it is very important to try and also not get emotional about the situation and try and think very clearly And seek seek advice for your vice all right, that's First part of the series exclusive series on um on a buyer's agent a buyer. Sorry about that Buy his negotiation journey. Yep, stick stick stick stick with us Now here we usually have three quick questions, but actually we're going to break it. I've got a little bit of a game So it's what kind of game chris Uh, I don't google search or so, you know the You may have sentence for it while you type in a certain phrase in the google You don't quite finish the sentence And then you're actually pre-populate. So tom tom cruise is most known for and i'll come up with acting dancing singing Cruise whatever now we tried to do the vice agent selling agent unfortunately googled And wasn't really ball much entered entertainment So we just came with two fun phrases that we thought might just keep each other in toes. Who's going? I'll go first. So mine is I always say his person gets he's going to start a sentence And doesn't finish it I get three chances to guess one of the words that he can see is a dropdown Yep, and it's worth a point each and then he'll have to go on my one and then whoever's got the most points wins Correct. Let's go. Okay, chris. My phrase is how do you I mean i'm gonna start with poo No, no, is it my clothes or not? You're probably not wrong. Actually you're like you're close. I mean if it's vaguely there. What? I know you're having you're off Think along discussing Disgusting lines. Yeah, how do you eat? No, oh god. I've got one more guess. Yep. How do you drive? No, do you know why I am going to get the weed? I'm gonna get the weed one because I got one of them was how do you get a UTI? I think it's in there. It's in there. It's in the range to be one point without okay one point. Yeah I was just gonna quickly say the options were how do you recall an email and outlook? How do you use song by old rook the UTI get shingles get scabies get ringworm get tonsilors get kidney stones get pink eye and how do you know? Pink eye pink eye some more related to me anyway. Uh, so for you Why are people scared of The dark that is on there literally that's on there. Wow Why are people scared of spiders? It's two points. I mean, it's too easy. If you get three for three. I'm sharing lunch Why are people? Um, there's nerves Get hungry No, no, I get it too. So clowns solo eclipses Snakes Cockroaches That's good. Look, I'll tell you if you take it. A.I. Actually, A.I wasn't nervous. I'll tell you if you're true But um, all right. So next week Topic we are on to let me go back. We are on to canner offers Against other buyers a kind of we're talking about there earlier on So stick stick stick with us. I was gonna say if you have any more questions or you want us to expand on a certain topic a certain question Please leave a comment write an email. We'll be happy to discuss Um, just trying to make the buyers out there and even the vendors Um, just understand as much as you can about real estate in 10 to 15 minutes. Beautiful Follow like subscribe share share to one friend who is in their thirties. That would be amazing Nice, nation to order. It's good. All the best out there.