In today’s marketplace you really need to be on top of your game to be successful. So when approaching agents, should you be putting forward multiple verbal offers aimed at getting a great deal, or taking a more precise approach with a written offer on a single property? We talk to Josh Masters about what he believes is the best way forward in this market.
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Transcript:
Kevin: In today’s market – I guess in any market – you really have to be on the top of your game if you want to be a successful property investor. When you’re approaching agents, how should you go about it? There are some different ways, depending, I guess, on whether it’s a buyer or a seller’s market.
Let’s talk to a man who does this quite often. He’s a buyer’s agent. In fact, he’s Sydney’s best buyer’s agent, Josh Masters, who we’ve spoken to in the show before.
Josh, thanks for joining us again. How are you?
Josh: My pleasure, Kevin. I’m very well.
Kevin: Good. How would you suggest someone go about buying a property in this market? Is it good enough just to test the waters with a verbal offer?
Josh: I don’t think so, but it’s an excellent question. One of the first things I tell clients or prospective buyers when they’re going out into the marketplace is really get a gauge on the market. Is it a buyer’s market? Is it a seller’s market?
I think a lot of people look at the marketplace and they think, “Oh, I’ll just use a bit of negotiation, a bit of hard line tactics,” and they’re quickly surprised when it’s actually in the seller’s favor, that they’re not really getting the traction that they thought they would, and they’re not actually getting taken seriously by any of the vendors and quickly get walked over.
Kevin: What are some of the warning signs for a buyer that they’re not being taken seriously, Josh?
Josh: Unfortunately, I actually had a prospective buyer call me yesterday. They contacted me and said, “We approached a sales agent and offered them what they were asking as a price guide, and they laughed at us.” I thought, “Well, what a terrible experience,” but it is so true, because typically, the agents will under-quote a property by a standard 10%.
It’s almost industry standard these days that they’ll be about 10% under that asking price, and having that reaction from an agent quickly tells you that you’re not even in the ballpark.
Kevin: What should someone do in a situation like that? Obviously, buyers who aren’t skilled or as skilled as you are, should they actually offer more? What sort of dialogue should they use with the agent?
Josh: That’s an excellent question. This person actually knew me personally, so he gave me a call and I could help them out. But normally, I would go back to the agent and say, “I’m not very experienced.” I would actually put my cards on the table. Tell them honestly, “We’re really trying for these properties but we seem to be missing out. Can you give us a little bit of a hand of what this vendor’s expectations are?”
He might give you an over-inflated price or might blow it out of the water for you, but at least you get a little bit of feedback and you can actually say this is where you really should be playing. In the future, if you go for any other properties, rather than waste everybody’s time, maybe go in at a higher level and you’ll quickly get a gauge on whether that’s appropriate or not.
Kevin: I quite often think that testing the waters with verbal offers can be a very big mistake. You show your hand to start with and you’re not indicating that you’re serious.
Josh: I agree.
Kevin: Let’s talk for a moment about serious offers. What would you class as a serious offer?
Josh: Kevin, the first thing I would actually do – and we do this for every property we purchase regardless of size or amount – is get an independent valuation done. A lot of people attach valuations to bank valuations. Obviously, the banks engage their own valuers, but you can do yours as well.
Rather than taking things on a hunch, you can actually get a professional opinion, get a list of comparable sales that say “Based on the market today, this is what we think this property is worth.” And this is a professional, independent opinion.
You can take that opinion and then say “This is our line in the sand, and this is where we can go forward from here and gauge our offer.”
Kevin: The thing I love about what you’ve just said, too, Josh, is that the listing agent is going to know that you’re getting a valuation done. They’ll then know how serious you really are, too. It’s a good message to send.
Josh: That’s right. If a valuation goes over the expectations of the asking price, then I don’t tell them what our valuation is. But if it goes under, I actually take it back to the agent and say, “I know you’re asking $750,000, but our valuation has come in at $700,000 and this is where we think a fair price would be.”
I give them the valuation because the agent can then take it back to their vendor and say, “The market is getting this response.” The agent is just trying to do their job as well. “The market is getting this response and they’ve had a valuation done. There is some serious background research into this. Maybe we should consider bringing our expectations back a little bit.” Sometimes that can help.
Kevin: Indeed, it can. Very good advice, too, from Josh Masters there. If you want to contact Josh, of course, you can through his website, JoshMasters.com.au. Josh, I look forward to catching up with you again real soon.
Josh: My pleasure, Kevin. Thanks for having me.
Real Estate Talk – the only place where you hear all Australasia’s leading property experts.
Originally published as: https://realestatetalk.com.au/how-to-work-with-the-agent-josh-masters/
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Kevin Tuner worked in radio as General Manager of various east coast radio stations. He started in real estate in 1988 and was ranked in the Top 10 Salespeople in the state until he was appointed as State CEO 1992.
He operated a number of real estate offices as business owner and was General Manager of several real estate offices in Christchurch.
He now hosts a real estate show on Radio 4BC and a weekly podcast at www.realestatetalk.com.au. He is the host of a daily 7 to 10 minute podcast show for real estate professionals at www.reuncut.com.au.
To hear more podcasts by Kevin Turner, click here
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
