Investors who are actively in the market to purchase a property may be daunted by real estate agents. An investor may be fearful of not knowing what to ask about a prospective property. However, investors who are looking into a property shouldn’t be intimidated as they often hold the power as a buyer.
As seen in Your Investment Property Magazine
There is a common thought that property investors need to try and outsmart a real estate agent. The rationale here is that the selling agents hold all the power when it comes to closing a deal. However, this is not always the case.
If a real estate agent is good at their job, they will simply want to get to know you and see how they can best help you. Their objective isn’t to make you purchase a property you don’t want at any cost; most reputable agents want to produce a win-win outcome.
So, treat the agent as a human and tell them that what you want to know about a prospective investment property.
By being vulnerable and admitting you don’t know everything, and that have some pre-prepared questions to ask, means you may come across as genuinely interested in the property and you’ll be treated with respect.
5 crucial questions to ask
As an investor, it is your responsibility to research the property market and the prospective property that you would like to purchase. After all, it is your time and money that are on the line here.
Negotiation expert Julia Ewert, founder of Julia Ewert Consulting and who has 20 years of experience working in sales, management, corporate training, and operations across industries such as consumer goods, telecommunications, and property investment shares 5 crucial questions you may ask the selling agents that may land you the best investment property at the lowest price possible:
- Why is the property for sale?
The answer to this will provide insight into the seller’s motivation. Have they already bought elsewhere? If so, they are likely to want a quick sale. Are they struggling to make mortgage payments? This being the case, it may give you a clue as to whether they will hold out for the highest price or may accept something lower for a quick and easy exit.
- How long has the property been on the market and why is the property not sold yet?
These two questions go hand in hand. If the property has been on the market for many months and you ask the agent the second question, you could uncover such information as the sellers’ price expectations or any issue with the property that makes it more challenging to sell or some complicated requirements about the block, or the building structure.
- Do you agree with the price set by the vendor?
Watch the body language of the agent when you ask this question. Look for any hesitation; break in eye-contact or uncomfortable shifting.
You’re testing here if the property is priced correctly. If the agent thinks otherwise, they may give you a clue as to any disconnect between their own opinion and the seller’s opinion. If they believe the price is right, they will likely answer without hesitation and with confidence and enthusiasm. They may also provide their market insight to support their opinion.
If you uncover any disconnect in price expectations, this could lead you to have a better idea of the true market value of the property. After all, the property is only worth what someone is prepared to pay.
- What are the not-so-good features of the property?
Agents are geared to provide you with the best points of the property and will be happy to tell you all the reasons why its value is as stated. By asking this question, you may lead them into telling you something, because it would be unrealistic for them to answer with “there are no bad features at all”.
- What kind of settlement terms is the vendor seeking?
Knowing if the sellers are seeking a 5-month settlement or a 50-day settlement can change the strength of your offer. If the seller is seeking the fastest possible settlement period, then a lower-priced offer with a fast settlement may motivate them to accept. If they are seeking a longer settlement period, then the price of your offer may not be the number one motivating factor for the sellers. They may be more interested in a reasonable offer that allows them to stay in the property for longer.
There is nothing wrong with showing your vulnerability with real estate agents. Truth be told, they are not expecting you to walk into an open house and know more than them about the market or the property. So come in the open house like a human and aim to engage and connect with the agent. After all, they could become your best asset to helping you find your ideal property investment.