Target Properties That Have Spent Time On The Market
Usually 60 days plus is a great place to start. When a property first opens to the real estate market the owner has an imaginary reserve price that is usually high with full confidence in the there advertising campaign and selling agent. When weeks and months go by with no results the sellers state of mind is very different to when they started. It’s at this point there is potential of lower offer.
It’s common practice for real estate agents to over quote property to win business, There strategy is to condition or educate the owners to true market value before the property turns into a stale listing.
What is a stale listing? A property that has been on market for 45 days +, usually overpriced and doesn’t have many buyers looking at the property. The advertising campaign has been waisted and newer properties have taken the top spot of advertising in the suburb.
Other problems that can stop a property from selling are:
- Vendors don’t give the agent a marketing budget.
- A property is not presented well.
- Vendors think their property is worth more than the market value. Once a ‘for sale’ property price eventually comes down to market-value, buyers are no longer interested. This is called a stale listing.
This creates an opportunity for a skilled negotiator to bring the price down further and sellers at this point are usually motivated to move on.
A Renovators Delight
Every real estate buyer wants to purchase a property that requires no work. These homes always sell for a higher price, even when prices are going down.
Buying a home that is structurally sound, yet needs work, creates an opportunity to buy property at a large discounted price.
The sellers of these homes are also more inclined to negotiate as they understand the property needs excess money spent on it to bring it up to standard.
Target properties that are not listed for sale (off market).
An off market listing is a property that is for sale without the public selling camping.
The benefit to a buyer is there are no other buyers pushing prices up. This is a great opportunity for any buyer.
How to find this kind of listing:
- Buyer’s agents and real estate agents have access to these types of listings.
- Doors knock a street you like.
- Web sites like ‘Buy My Place.’
Use A Buyer’s Agent.
The main purpose of a buyer’s agent is to buy a property at a cheaper price. They’re former real estate agents that look after the needs of the buyer rather than the seller.
How do they do it? They’re trained negotiators that know how to play the real estate agent’s game. They’re not emotionally attached to a property hence have a greater ability to focus on the facts and are not afraid to walk away at the right time.
Spot A Quiet Achieving Suburb
Popular suburbs increase in price quite quickly, while the neighbouring suburbs are the quiet achievers. It’s only natural for buyers to default to the next suburb if prices are too high in the boom suburb.
Buyers can achieve better capital growth in these types of suburbs because they don’t have the premium price to begin with and growth rates are still very strong.
Leverage a negative building and pest inspection.
A good negotiator / property buyer will put a condition of sale that is subject to a building and pest inspection.
If the building inspector discovers a minor problem with the property, this can create further negotiating opportunity.
Otherwise known as mortgagee sales. This is when a property owner can’t meet the obligations of their mortgage, hence their bank evicts the owners and resells the home at auction.
Some benefit of this type of sale:
- Less buyers/competition. Properties are not polished listings which can put buyers off. Usually they’re presented poorly as the bank doesn’t want to spend any more money on the property and cut their losses.
- A lower reserve price.
- The property must sell.
The hardest part of a real estate agent’s job is dealing with emotional sellers that think their property is worth more than the market value.
Many retirees or deceased estates are handed over to ‘State Trustees,’ which is a government organization that manages the sale process on behalf of the vendors.
The benefit of state trustees is they’re not emotionally attached to the property and will sell a property for a fair market value.
Checkout the State Trustees website for current properties that are for sale: State Trustees Property For Sale.
Step 3: Create Your Own Luck.
Like any hustle in life, the more doors you knock on the higher chance of success when buying a property below market value. It takes a bit of hard work by focusing on the facts and figures and not letting your emotions take over.
Some of the strategies used in this article are what expert buyer’s agents use to target a potential bargain. If you’re interested in finding out more about how a buyer’s agent can help, WREA offers you a complementary first consultation.
In the meeting your consultant will establish your buying criteria, assess your ability to enter the market and give you a few options of the type of property that suits your criteria.
For more information on the service please call us directly or leave your details on the enquiry from below.