Buyers' agent Chris Gray reveals insider secrets to finding and securing a property before it goes to market
My property investing strategy has been to target median priced properties in very high capital growth suburbs, which are often found 5-15km from major cities.
The advantage of these properties is that they generally hold their value in the tough times, and are the first to recover and grow quickly in the good times.
The downside of buying these is there are very few on the market and because there is such a great demand for them, they often don't go cheap.
For this reason, I spend most of my property-investing time trying to find 'silent sales': unlisted properties or property transactions that the general public don’t get to see.
I am a buyers' agent, but I also buy property for myself. That means that I bulk buy a lot of property and that does make it easier. But the lone investor can do it themselves with a bit of effort.
While I am hunting silent sales to find the right property, silent sales can also mean bagging a bargain at the same time. It all depends on what your strategy is.
Why are properties sold silently?
• Some vendors do not like agents and think they are overpaid for doing very little. Why pay someone else when they could do it themselves? If they can sell it quickly to a friend, family member or anyone else who saves them time and money, they will.
• Some vendors do not want to spend any money on marketing and sprucing up the property, so agents often say to them that they can 'test market' it first and offer it to the people on their database.
• Some vendors need to sell quickly and have not got time for a full four- to six-week selling campaign. They ask their agent to find them a quick buyer. It is more about getting a quick guaranteed result than getting the highest possible price. They will get more money from an agent than they would if the bank sold it.
• Some vendors do not like the thought of an auction and the pressure that comes along with it. What if no one turns up or bids - what will we do then?
How average buyers can access silent sales
If you are a buying property for yourself and want to get access to unlisted properties you need to get clever.
- Become better friends with your local real estate agent
The key contact between sellers and buyers, agents are the first to be aware of properties for sale - yet so many people are shy about handing over their mobile number at open inspections.
How are you ever going to be made aware of deals or changes in a vendor's expectations unless you make contact with the agent? You need to persuade the agent that you are very serious about buying property.
Make sure they know you are pre-approved for finance, are serious about buying and can make a quick decision followed by a signed, unconditional contract.
People are often scared about telling an agent what their budget is, as they think the agent will make them pay more. I always say that I can buy up to any amount if it is the right deal, but I am only prepared to pay what it's worth – and I will get an independent valuation to double check the figure.
- Letterbox drops
Do what the agents do and letterbox drop in the areas you want to buy.
If you are a serious buyer for the right property, the vendor can save time and money by going directly to you. It takes more personal effort and will cost you some money, but spending a few hundred or even a few thousand dollars could get you a great property at a great price.
A lot of vendors always think their property is the best in the street and want a fortune for it, but some do not keep up with the market and want something more realistic.
- Get organised
Make sure you are ready when the right deal comes along. Get pre-approved for finance and have your valuer, building inspector and strata inspector all in place so they can check you are buying the right property at the right price.
As a professional investor and buyers' agent, the number of people I see that have deals staring at them in the face but cannot recognise them is unbelievable. You are never 100% guaranteed of any deal when it happens, so at some point you have got to make a decision and jump in. The more organised you are, the more likely that decision will become easier.
- Tell friends, family and colleagues you are looking to buy
Often those close to you will know of someone else looking to sell, so spread the word. People love talking about property, so if you mention you are looking every time you talk to someone it won't be long until you make the right connection.
- Pay a professional
If you buy property once every few years and a buyers' agent does it every day and has all the industry contacts, who do you think will buy better? Sometimes you've got to spend a dollar to make two.
