In this week’s episode, Dave, Cate and Pete take you through:
- Extending the negotiation or offer acceptance period. The agent has given you a deadline to submit your offer, you wait with bated breath… Then the acceptance period gets extended. The reality is that there is no obligation for the agent to stick by a specific timeframe and the agent has full control of the process; they call shots. While buyers will be doing their best to shut down competition, it’s the agent’s job to bring extra players to the fold and create competition to bolster prices to great a great result for the vendor. The Property Buyer gives her tips and key questions to explore before you put pen to paper and submit your offer.
- Asking if your best offer is actually that. The Property Buyer estimates that 70% of the time when an agent asks you for your best offer, they will come back to you asking if that’s your best. This is common practice. The trio discuss how to navigate this situation.
- Not offering private inspections. There may be many reasons why an agent declines a private inspection. They may be related to the vendor’s circumstances or the agent could just be busy, (or lazy). Some reasons may be related to you! The agent may believe that your budget is nowhere close to where it needs to be or that you’re not serious about the property. Strong conditions in a seller’s market, where there is lots of interest in the property may mean that the agent doesn’t have to go the extra mile and give prospective purchasers private inspections. In Victoria, if the property is tenanted, the tenants are entitled to rebates for every open and agents don’t want to rack up a huge bill!
- Not returning your phone calls. In this market, agents are being inundated with enquiries and properties are selling in days, not weeks. The trio discuss the fundamentals of providing good service and getting back to people in a timely manner. Those that prosper are the ones that provide good service consistently.
- Insisting on a signed contract and a deposit payment. Agency practices can differ widely. One may be ok with an offer submitted via email, while another may insist on a signed contract with deposit. Agents and vendors no doubt have been burned in the past by receiving verbal offers from buyers that have then disappeared over night. The trio talk about the agent obligations in running a trust account, and recommend that buyers always ask for a receipt. Remember, an agent is only legally required to present your offer to a vendor if you’ve submitted a signed contract with a consideration.
- Not disclosing sold prices on the internet. This is a huge frustration for buyers and businesses in the property industry. It means that the quality of the data on hand may not be accurate or to the highest standard. However there are no legal requirements for the agents to disclose. The trio discuss the reasons why a sale price may be withheld from public record . They also discuss the side issue of the dangers of purchasing in medium to high density apartment blocks, where the data can be skewed by a number of factors.
- Over-quoting the rental potential for a property. Agents are not all on the money with their rental appraisals, particularly if you’ve put them on the spot. This can be a nasty shock when you’ve modelled your cash flows, only to find out that the rental return is far from what was quoted. Some agents will feel a vested interest to over-state the likely rental return in an effort to drum up interest and competition. Always get a second opinion from an independent local property manager or valuer.
Peter Koulizos – The Property Professor’s Golden nugget: An offer is not an offer, unless it’s in writing. Find out from your consumer group, what are the rules for prospective purchasers.
Cate Bakos – The Property Buyer’s Golden nugget: workout what they’re going to do with your offer, how they will field offers and how the vendor will make a decision before you put pen to paper. You need to know this before you show all your cards.
- Cate and Pete’s exciting auction weekend. Tune in to hear Cate and Pete’s thrilling experiences of each successfully securing a property over the weekend, despite the lockdown challenges and last minute changes of plans.
- Tight rental vacancy rates. The national monthly vacancy rate holds steady at 1.7%, from June to July. Not surprisingly, the Sydney and Melbourne CBD markets continue to experience higher vacancies, with Sydney increasing up to 6.1%, now higher than Melbourne’s 5.7%. Brisbane is the only other capital city with vacancies above 1%. The tight vacancy rates have meant that rents have increased 13.7% over the last 12 months. The trio discuss why this is happening, given that international borders are closed and we’re not seeing any population increases.