Over the last few days a newbie property investor called Craig has been picking the brains of myself and Mary Latham by email. Yesterday we got talking about negotiating with estate agents and the advice we shared with Craig is well worth sharing here so that others can benefit from it too in my opinion. Between us, Mary and I have 64 years of experience in buying property as an investment. This number will grow massively as others share their opinions and as more questions and answers are added to this thread.
Negotiating with estate agents
Having viewed properties which match your requirements in terms of attracting the right tenants – a good agent will always call to you to ask for feedback. When they do, tell the agent that you really liked the property and would love to buy it but you think it’s priced too high for you to want to make an offer.
At this point you need to SHUT UP – do not speak no matter how long the silence goes on for.
They will ask “how much too high is the asking price” or they will say something like “the seller is open to offers”
You reply “I don’t want to insult you with a low offer” – then you SHUT UP again. The first to speak is the loser – play the game!
The agent will push for an offer.
You say that it is just what you are looking for and your finance is in all in place but you need to keep looking as this price just isn’t right for you on this one.
The agent will again push for an offer
You laugh and say, well if I was pushed I would probably offer in the region of £xxxxx to £xxxx (NOTE this should be 25% – 20% below the asking price) but I know that’s probably not going to be enough is it?
The agent will either try to pin you down to the top of your offer range or tell you that the seller will not go that low.
You will end up with one of two things 1) a property at 20% below the asking price or 2) an agent who knows that you have money and want to buy but just not this time …….
Whichever way it goes, always be respectful to the Estate Agent.
How to decide what to view?
Craig emailed me again this morning asking for advice on what I think he should choose to view.
My advice to Craig was this ….
Start by finding properties which you know you can afford to buy and which will always attract good tenants and good yields, then do exactly what we have advised above in terms of negotiating with estate agents.
Use Rightmove and Zoopla to select which properties to view. Stick to the area you live in if at all possible, or at least one you know well and don’t mind visiting whenever the need arises.
If you see the words “Guide price” chances are the property is being sold by auction.
Forget auctions for now, they are no place for an inexperienced property person.
Also forget agents who don’t use Rightmove or Zoopla. As a general rule they are dodgy, not always but most are!
Finally, don’t get sucked in by the guru’s offering get rich quick property training courses, otherwise you will spend your savings with them and end up with nothing as so many new landlords before you have done.
It’s a numbers game
Craig is going to have to learn to deal with a LOT of rejection using this strategy.He may well view and make offers on 30 or more properties before somebody says yes. He may just get lucky first time around, only time will tell.
I have created this thread so that Craig and any other newbies can post their questions and so that anybody can answer the questions in open forum. The more the merrier in terms of people posting and answering questions in my opinion. This is a far more effective way for Craig and other newbie property investors to get free advice from a variety of landlords and it’s also a better way for myself and other experienced landlords like Mary to share our knowledge with a wider audience.