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13:59 PM, 22nd May 2013, About 11 years ago 42
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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.
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.
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.
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.
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Jonathan Clarke
19:38 PM, 25th May 2013, About 11 years ago
Craig
I would like to turn this back on you now for you do some work! Youve received lots of good advice to date. Whats the feedback for us or else we will start to go round and round in circles and I`ve got the Champions Final to watch in a mo. 🙂
Having heard many suggestions what do YOU think you should do with it and why? What does your gut say to you as being the best option?
craig singleton
20:33 PM, 25th May 2013, About 11 years ago
Hello Jonathan, I'm having to put up with the voice due to my girlfriend haha. Well this is where I'm stuck to be honest. Where to invest and what to do for the best. I no alot of investors don't like telling amateur investors what to do for the best but. Please tell me what you think I should do for the best. My heart is not telling me what to do for the best. I no alot of people are going to look at this comment and think. Oh my god he's just going on and on and on but I just don't no what to do. I appreciate everyone's help so so much
philip allen
2:10 AM, 26th May 2013, About 11 years ago
Craig, I've been following this thread and now feel that you're not serious about property investment. You just constantly repeat yourself over and over and ignore the advice of people who really know. My final suggestion is stick your 20k under the mattress or give it to your girlfriend. Maybe she has enough drive and ambition to do something with it. Got to go, just refurbing the newest acquisition to the portfolio.
craig singleton
10:27 AM, 26th May 2013, About 11 years ago
Hello Phillip, believe me I am 100% serious about property investing. Please don't tell me I'm not. I just don't want to jump straight into things without seeing what people think I should do for the best. I'm not talking about buying bmv now I'm talking about what area to invest in for the best. What sort of letting shall I target for my first property. And whether people think I should buy and sell with residential mortgages with no early repayment fees. As i won't have to pay tax due to not being a home owner. I can then make my 20k grow to have more money to play with. But I'm not sure whether buying and selling is the way due to houses not selling very easily. I no I keep going on and on Phillip. But I want to no what people think I should do for the best. I've got five different areas I can buy in as I don't want my property to be no more than a 2 hour drive from me. Nottingham Coventry Walsall Wolverhampton and Leicester. Do I go for a single let. rent out 4 rooms. Do I buy and sell I don't no. My heart is not telling me what to do for the best. I'm stuck and I can't decide. This is why I'm asking people what they think I should do. Sorry again to put your back up Phillip. But trust me I am deadly serious about property investing. I want to become a success in life so bad. Thanks
Mark Alexander - Founder of Property118
11:32 AM, 26th May 2013, About 11 years ago
Hi Craig
You may have already said but to save me re-reading this whole thread and all the emails you've sent to me again, what is it that you do for a day job?
craig singleton
12:22 PM, 26th May 2013, About 11 years ago
Hello mark, I work in a small warehouse above a chemist. We supply the drugs to all of our pharmacies. So I basically take deliverie's pack orders etc. Why do you ask. I hope you are well. Thank you again for this forum. I appreciate it so much
Mark Alexander - Founder of Property118
12:32 PM, 26th May 2013, About 11 years ago
Hi Craig
We actually know very little about your personal circumstances. maybe property investment as some of the people commenting here know it is not for you at your stage in life.
I asked about your employment based on a question you raised about buying a property with a residential mortgage. I was wondering whether you work is confined to a certain area as you mentioned that you were priced out of buying in that area.
You have also mentioned investing for the future of your family but I have no idea whether you already have a family or whether you are a school leaver living with Mum and Dad.
If you had a good job and a partner with a good job but didn't own your first house that's what I might suggest you do first. With the latest government schemes you wouldn't need a massive deposit and you might be able to buy something which is far bigger than you need for yourself. That might allow you to be a in live in landlord by taking lodgers.
I'm just playing around with a few alternatives as you are obviously prevaricating when it comes to buying a property purely for investment purposes.
craig singleton
14:41 PM, 26th May 2013, About 11 years ago
Hello mark, I work in one place everyday 9 tell 17.30. I live with my mum. I don't have any kids and my girlfriend is currently not working due to have three hip operations in the past two years. She was born with hip problems. I want to buy a few investment properties first before I buy a house to live in. If everything goes well I plan on getting a house for me and my girlfriend to live in no more than two years. I want to get a few properties behind me. So when it comes to getting my own house to live in ill have more money to fall back on every month. The buying a residential property buying would be purely to make my 20k grow. But I don't no if buying and selling is the way to go in the areas I'm looking at. I no alot of people buy and sell to first time buyers doing a 50% shared ownership. But I don't no too much about that. Thanks
Mark Alexander - Founder of Property118
15:08 PM, 26th May 2013, About 11 years ago
That's quite a bullish plan Craig, from your research so far, what would you do to achieve your plan if you had access to no further information. It's a hypothetical question but 24 years ago, for me it was reality.
craig singleton
20:00 PM, 26th May 2013, About 11 years ago
Hello mark, I don't fully understand your comment. Could you explain yourself abit more please. Thanks