IT'S NOT ALL ABOUT PRICE

BY CHRIS GRAY, CEO, YOUR EMPIRE

Any successful and experienced salesperson, from any industry, will tell you that when someone sells something, it’s not always about accepting the highest offer they are given. For those of you that are looking at buying a home or investment, this is true in property too.

The vendor of a property isn’t always 100% motivated by money and so it’s really important to talk to the real estate sales agent and find out as much as you can about the property and the vendor. You may well be able to secure a property for less than you thought, even if a competing buyer is willing to pay more.

1. Selling to a ‘nice’ person.

Your home is your castle and if it’s been where someone’s family has grown up over the last 30 or 40 years, it likely has some sentimental value. Many owners will be very sensitive about who is going to take over their home and what they are going to do with it. They’re much more likely to sell to a ‘nice’ family than they are a renovator or developer that’s likely to tear it down.

2. Length of settlement.

Once you exchange on a property you typically have six weeks to come up with money and the vendor has six weeks to move out of their property and into their next home. For those in financial stress or in desperate need of raising cash quickly, if you have the ability to settle within a week or two, this could make you the most unique buyer in the market. Conversely, if someone needs more time to sort out their belongings that they’ve horded for decades, offering them a 12 or 16 week extension could be just what they’re looking for.

3. Ability to remain in the property after sale.

Depending on the market that you are transacting in, it can be hard to know how long it could take for a vendor to find a new home. Many are cautious about buying, before they know what their home will actually sell for. Rather than offering a longer settlement, a buyer could always offer a vendor the ability to rent the property off them after settlement until they manage to secure their next property. This would save a vendor from having to move multiple times,

4. Not letting the neighbours know.

Not all vendors want to let the neighbours or community know that they are selling, especially if they are going through financial stress or divorce. This is when selling a property before it comes on the market, often known as a silent sale, can be very advantageous. Speaking to a sales agent about what future properties are coming up for sale and if the vendor would be open to taking an offer prior to listing. It can be harder to negotiate a much lower price in this situation, but at least you get to buy the property you really want and at a fair price, rather than having competition push it higher.

5. Saving money on marketing and auctions.

Taking a property to market, running an advertising campaign and going to auction can be an expensive process and another reason why some vendors may be open to taking an offer prior to listing. Also, if a property doesn’t sell at auction it becomes ‘stale’ and the price could drop further –another reason why accepting a fair offer before listing could be just what the vendor is looking for.

Many of these motivations above may be completely illogical especially when you put your accountant's or banker's hat on, but so much of the property market is based on emotion rather than facts or figures.

If you’re keen to buy a better property for a better price, then working hand in hand with a sales or a buyer’s agent can be the key to achieving that goal and asking more questions could save you literally tens of thousands of dollars.

About The Contributor

Chris Gray is CEO of Your Empire, a buyers’ agency that buys homes and investments for time-poor professionals – searching, negotiating, renovating and managing property on their behalf. Chris has spent over 10 years as the host of ‘Your Property Empire’ on Sky News Business channel, where he’s interviewed various heads of property research companies and major industry figures. Chris is a qualified accountant, buyers’ agent and mortgage broker. For more information, visit www.yourempire.com.au and follow Chris on Facebook: @ChrisGraySydney