Secrets To Buying Property In a Hot Market
The market in Brisbane and right across Australia is heating up so much right now. Negotiating and buying property is a hot market requires very different strategies to a cold market.
In this video we share some amazing tips for how to negotiate and secure your next property when the market is extremely hot and properties are selling extremely fast.
0:00 – Introduction
2:06 – What is a hot market?
5:10 – Building relationships with agents
10:40 – What to do once the market comes online
12:40 – The agent is your friend in a hot market
13:40 – Build trust and value with the agent
16:28 – Review the contract and be prepared when making your offer
17:50 – How to present offers and negotiate
21:13 – Helping the agent move the deal forward
24:30 – Creating time pressure
26:28 – If the property goes to the open home
33:20 – Avoiding the bidding war and not getting emotional
34:40 – Looking at the upside potential by looking at history
Ryan M 0:00
The market in Brisbane and right across Australia is heating up right now and buying in a hot market is so different to buying in a cold market. I just sat down with Ben Everingham, buyer’s agent from Pumped on Property. And we talked through some key things about how to buy and secure property in a hot market. We’re going to be sharing this video, it’s so good. We’re sharing across both our channels. So I’ll link up to Ben’s channel down below where he does, he’s of great content. And so go and check him out. Otherwise, let’s get straight into the video. The market up here in Brisbane and on the Sunshine Coast is heating up so much at the moment. It’s not just heating up man, it is so hot right now. And the way you approach purchasing property in a hot market versus a more cold chilled up market, which we’ve seen over the last few years in Brisbane, as well as during that peak Corona lockdown period is very different the way you need to negotiate the way you need to talk to agents, the way you need to try and lock down these contracts and get these properties is very different. And if you don’t do it properly, then you’re going to miss out and we don’t want you guys to miss out, we want you to get the best investment properties at the right price. So today, we’re going to be talking about how to negotiate and purchase investment properties in a hot market. I’m Ryan from OnProperty helping you achieve financial freedom. I got with me Ben Everingham, buyer’s agent from Pumped on Property. And he has been doing this all man you know, all the last couple of months is just hot market negotiation. So really excited for this one today. You know, I’m loving it. It’s what February at the time of recording this this year to date. I think we bought 20 I bought 22 properties for our clients personally and it is really hot out there right now. And like I just said to you off camera that even with everything that I know, which is I’ve been doing this as a business for five and a half years but I’ve been selling in negotiating for a lot longer than that I’ve read the books, I’ve listened to the audio and I’m only getting four out of every six properties still, you know it is hard. It’s taking everything to like get the right outcome at the moment. Yeah. overpaying. So let’s before we get into it, let’s talk a little bit about Okay, what is a hot market? Why is Brisbane and the Sunshine Coast? so hot right now? so hot right now. So hot right now that fridge is so hot right now. So long right now? Yeah, I’m actually growing the hair out besides like this awkward length. But so a hot market to me is simple. From a data perspective. It is either an auction clearance rate of over 75% in Sydney, or Melbourne or one of those big regional markets where options actually work. in Brisbane, Adelaide and Perth auction clearance rates are still like 35%. So reading that indicator, it looks like low and not hot, but it’s not that. The other one that I look at is DSR score. Yeah, when the DSR score gets above 70, it is hot as hell and hard. So we’re seeing so hot, we’re seeing like those markets at the moment. Every server we’re buying is above 70%. Now some of them are getting over 80% auction clearance rates are going nuts in Sydney and Melbourne and sentiment and positivity drives higher prices. And you know, we’re looking at a market according to Macquarie Bank and Westpac West sentiments at its highest point in the last seven to 10 years right now. And so that’s having a knock on effect of RTB, right if we overpay cause I expect gains in the short term to make that back. Exactly. And some other things that you notice in a hot market is an increase in properties selling off market. So not even coming into real estate or domain, they’re just, you know, going straight to the list that the real estate agent has anything sold going straight to buyer’s agents like the team over Pumped on Property, you’ve also got less vendor discounts. So the asking price that they’re asking for, they’re less likely to discount it or property selling over, you’re also when you’re going to open for inspections, there’s going to be more people their properties, if you’re going to sell quicker as well, you can look at days on market. And if that starting to shrink, then you can see that okay, properties are staying on the market, not as long. And that indicates that a market is heating up. So when you don’t have that time period, because properties are selling faster for less of a discount. You don’t have that couple of weeks to just take your time negotiating with the agent a couple of weeks that sort of thing. And so yeah, the approach you want to take is very different. Because otherwise, someone’s going to come in and snap out that property before you’ve really had a chance to negotiate and try and settle on it. You know, we’re talking about property selling in Sydney, Melbourne and Brisbane in the right suburbs right now either fully off market, and that’s 50% of them, or within one to two days of coming online and like so. It’s kind of like cool. This is the environment we’re in now, what do we do about it? You know what I mean? And there’s a strategy for that. Exactly. So let’s talk about that strategy. What is that strategy? How are we going to approach things?
Cool. So as Ryan said, this is a hot market strategy. Effectively, what we want to do is get Trouble of the property before the first open home in the first weekend that it comes online. Yeah. So relationships with real estate agents is so key in hot markets. So it’s everything talking to the real estate agents in the area, finding the highest performers of the agents in the area who sell most of the properties as well. Getting onto them, letting them know that you’re looking, letting them know what you’re looking for, in what kind of price range and getting on their list and getting aware of it. Also calling them on a regular basis to find out if there’s anything new coming up in the future, then you can start to get these on like off market listings, or you’re starting to build that rapport with agents as well. So even if the property does come to market, and you find out about it, once it comes to market, if you build that rapport, the ability to then be able to see that property before the open home increases, and that’s where you’re going to have more power in a hot market. He is saying a property and negotiating on it before anyone else has seen it, versus going to the open home on a Saturday with 60 other groups. And then you’re all negotiating together. Sure. So like there’s really three types of transactions that happen. that happen. Wow, that happened. That happened. So one is the beautiful off market listing. That’s how we buy 25 to 60% of our properties each week, I get a call from Jess, she’s like, Ben, I’ve got you exactly what you’ve been after, for the last five years. Sweet. Jess, I talked to the client for half an hour, we talk about all the comparable sales and logic, the clients already been educated for eight weeks. So they’re feeling super excited and waited for that unicorn to come up. And then we send through a contract just drives around to that property that afternoon and the deals done. And that is the unicorn for the average person, what people don’t know is I’ve run guest twice a week for five years. every single week is a KPI in the business. And so my relationship with Jesse is going to be a lot deeper than someone else’s. And and also, there’s that relationship there with Jess, where she’s done property deals with you in the past that have been straightforward, easy, it’s settled, she knows that, okay, if she comes to you, a property suits a client, for the right price, the right parameters that a deal is going to get done and pretty straightforward as well. So you’re not a difficult person to deal with. And it can be a lot of trust, and a sure thing for her and for her client, which is a major benefit. Now, you out there as individual investors, you’re not going to be a buyer’s agent buying, you know, multiple properties every single month to have those sorts of deep, deep connections in the market and with agents. But what you can do is you can get your pre approval, you can be serious about, you know, knowing what you want, knowing what price you want. And then when the agent does come to you with properties, giving feedback to the agent and saying, okay, yes, I like this property. But I’m not like I didn’t like this thing about it, or I’m looking for this. So the agent gets really laser focused on what you want. And so that when they bring something to you that does tick all the boxes, then you’re ready to move, they know you’re serious, you don’t want to fluff around with agents, you don’t want to be that person that wastes their time that goes to every single open for inspection doesn’t give them any feedback on whether they like it or not, whether you going to make an offer or not. So sometimes giving that clarity on ones that you don’t like and just say, look, thank you so much for showing us that property really liked this about it didn’t like this, we’re not going to make an offer at this point. But if something comes out, we’d love to say it because we are serious, that agent knows, okay, this person is going to give me direct feedback. And I’ve got like a Skype, say like you’ve educated them on what you want that you know, is directly opposite to what they’ve shown Yeah. And then they’re not wasting their time with you either about arming and ironing about not knowing whether you’re going to make an offer or not. And if you’ve done that on multiple properties with someone that’s like, Okay, this person is just wishy washy, versus at least you get a no, but here’s what I want. They’re like, okay, they can move on to look at other people who are more interested in that property. And then when your thing comes up, say you can’t have the relationship with Jeff that Ben and the team do. But you can do things yourself to build up that rapport, build up that relationship, and be clear with the agents to get access to those off market listings. So
we work with people that we don’t have a relationship every week, like half of what we buy is some random guy from some area that’s gotten some property locally that we’re excited about, because he sort of doesn’t know what he’s selling. And so for that guy will go to the open for inspection after we’ve already done our due diligence. And we won’t go to something that doesn’t make sense. And we’ll go with like a this is our ideal property on one page, which you guys can easily create yourselves like just whatever it is that you’re looking for as an investment or your own home and we’ll give it to him. And we’ll say immediately on the spot. We like this property. we’re serious about it or we don’t and then we’ll follow that up with the text and a call after because, as you said, Man, like these guys are getting 6080 100 calls a day. They don’t have time to remember people that waste their time. Yeah. So the second type of property that Wait, before you go into that, I will let you guys know, we did do a video on how to actually get access to off market listings as well as how to inspect properties early. So there’s two videos there, that will really help you in a hot market. So I’m going to link up to those down below. One was with Ben and one was with Simon, I think, but they’re great ones to look at, to go into more detail about, okay, how can we build that rapport? Get those off market listings, as well as Okay, how can I actually talk to agents and get through the property before everyone else does on a Saturday, we just don’t have time to go do it in this video. So check those out. So the second one as we move on for me is we’ve we can’t get it off market. So it’s come online, we’ve seen it that morning, every single morning of the week, we’re checking out what we’re looking for, like anybody should be doing, or getting the alerts set up on realestate.com and sent to our email address of our ideal property. Let’s say the perfect property comes up on a Wednesday morning. And then it’s like, game on, you know what I mean? So that’s it, we’re not waiting here. We’re in a hot market. Right now. We’re not waiting on a property comes on Wednesday morning, you’re talking to the agent Wednesday morning, you’re not waiting until Friday afternoon, to chat to the agent in a hot market. It’s game on as soon as a property comes up that fits your criteria. It’s like, okay, it’s game time. It’s on its game. And then boom. So the game begins with a call to the agent. And the call to the agent is bitis asked one question really quickly, and that is, what is your plan for this property? You know, my intention is to buy it before the weekend, do you think that’s possible, and immediately they’re gonna go, it’s possible. Or, man, I’ve like told them that I’d take the property to the open home on the weekend. And as soon as they say that they’ve spent months trying to reel this client universe to sell it for them. As soon as they say that they’re going to take it to the open home, the likelihood of you buying it before the weekend goes to about 25%. If you’re extremely good at what you do. Yeah. So asking that question of what their plan, I want to buy it before the weekend? Can we get through it early? Or like not even can we get through it early, but do you think that’s possible is going to give you a framework, so you’re not investing too much into it? If they’re saying no, we’re gonna take it to the open home, because that’s the thing. They’re, they’re built up this relationship with the client that they’re selling for, they need to give that client a certain experience. And they just backtrack on everything that they’ve said, because you’ve come along, trust is gone, they can lose trust with the client, which can lead to all sorts of things falling over and not working out. So remember, that agent here is your friend, like you, they want to get a deal done. Because when they get a deal done, their client is happy, they get their commission, they can move on to the next property. So they’re your friend, they’re trying to get the deal done while you’re negotiating. And you’re trying to play hardball, you’re actually working with them to help get a deal done. So you kind of want to come across different languages, like you want to sell the property, I want to buy the property, and your client wants the property gone as quickly as possible for the best price. And it’s like I shouldn’t have to remind them that we’re all working for the same thing. But we are and certainly we’re not enemies here. And because I think some people take that approach. I’m going to fight with you to get the best price. Now. We’re gonna work together to get an epic deal for everyone. You want it sold, I want to buy it, the client wants it sold. Like I’m your friend here. And that while you still will negotiate and you’ll still play hardball if the agent knows that, okay, they can work with you professionally, that can really smooth things along and make things so much easier. For sure.
So let’s say that, you know, in this second example, the agent says, Yeah, I can drive around unsavoury. Well, I’m planning on going a meeting three people around there this afternoon, and then I’m going to take the best offer and I’m going to get a deal done tomorrow night you like yes, like, this is what I’ve been looking for. So I see age and a whole series of other questions which we can talk about in future videos, because that’s the hardest thing to learn, like how to ask the right question the right way. But I I’m like I’m telling the agent a story. So I’m the pre approved client. I’m been looking in the market for months. Now this property’s exactly what I’ve been looking for. I’ve done my due diligence, I should be able to do like a short building and pest and due diligence period. I’m working on my finance as we speak. And I’d really like to get this done. I understand the markets hot, I understand that I’m going to have to pay a fair price. And all of those things are just taking little boxes in the agent’s head. So it’s not just the price conversation. It’s also shit this person’s like, hey, like, this is my buyer. They’re in front of my face. And I think I can get this done and they’re serious, and they’re likely to pull through on the deal because what you need to understand even in a hot market contracts can fall through one out of three contracts for strong finance in Australia today. Yeah. And so the agent wants something that’s going to be a short deal because in a market things can change super quickly. property goes under contract and no one’s seeing it for two weeks, and then it comes back on the market because the contract fell through, that never looks good. And that can affect the price and the sale price of the property. So that don’t want that to happen. So saying these sorts of things like, I’ve got pre approval, I’ve been looking for months. This is what I want. You know, I’m working on finance, I want to value value value. Yeah, it’s just like, yeah, trust assurity. I’m assuring you, I’m assuring you. Yeah, yeah. And as Ben said, at the end of the day, often, yes, prices are massive and huge consideration. But it’s not the only consideration. Sometimes someone offers more, but has more clauses, or you know, doesn’t have pre approval or needs to sell their house before they can buy it, versus someone who offers less, but they’re ready to go right now. Or even if you’re both offering the same price, but you’ve got pre approval and ready to go versus someone who doesn’t, you get the deal, actually, like started genuinely submitting contracts now with not just me saying that to the agent, but putting that into the email that I’m sending with the contract. So the agent can sit down and go, this is Ben, he’s got three kids, he works in this space. He’s got pre approval, he’s excited about this. He wants to hold it for 30 years. And it’s just the whole, this is easy to present this offer versus the agent trying to remember the other six that they’re presenting. Yeah, because people buy stories like people. That’s how the world works. And that’s why I’ve got Hollywood and that’s why I’ve got podcasts. And that’s why I’ve got YouTube. But what happens from there is like, I’ve talked to the agent, I’m like, cool, like he’s reasonable on price. I know the market. Now, if you’re doing this on your own, you need a solicitor to review the contract. You need clauses in the contract that your solicitor talks to you about and writes for you so that you can safely look after yourself post buying. I put in the due diligence clause that my solicitors wrote, I put in a flood search cause I put in search clauses I put in access clauses I put in a building and pest clause I put in a finance clause. I know in some states, that’s really freakin hard to do. Like, it’s so much harder to buy a new south wales than it is in Queensland, because in Queensland, I can get control of the asset, and then have 14 to 21 days to work through that with my solicitor to make sure it’s right. I know in New South Wales, it’s like, do all that shit up front and hope to figure it out within five days, otherwise cooling off over and you can lose the property. So you need a good solicitor behind you that that sucks for the average person because it creates a time delay between I like it, let’s get an offer on but it’s the right thing to do for them every time. So what we do is we get the solicitor to review the contract, we get all the clauses in place, then we get the contract to the client, the client signs it. And when submitting that first offer today, now it’s what we want to talk about is okay, how are we negotiating at this point? So you’re talking about your offer has been accepted? Or is this now isn’t meeting the contract? is submitting an offer up here in Queens? Sorry? Yeah, so nothing happens verbally up here. Yeah, everything’s in writing on a real estate Institute of Queensland contract. Yeah. So just to clear that up with a different database. It can be different. But while you know the the minute processes might change, the general idea is going to be extremely similar. How you negotiate is the same. It’s just state by state, how you protect yourself after you have Yeah, so you’ve gone through the property early, you’ve looked at it before the open home on the Saturday, and then you’re submitting a contract, which is an offer.
Unknown Speaker 18:28
Yeah, and you’re submitting a lowball offer medium bowl offer. In a hot market, you submit an offer very, very, very close to what you’re ultimately going to pay with the right terms. And so the reason you’re submitting that as not your best is to get feedback. And because no matter what, every single time I’ve negotiated, the absolute best price straight up human nature is Do you think you can get me more? Yeah. And the agents like negotiating, it’s what they say, I’ll go back, and like negotiate and that sort of thing. You’ve got to think about the mindset that the landlord or the client has selling the property as well, they’re expecting negotiation to happen. They’re expecting they’ve hired an agent to work for them, because they don’t want to negotiate themselves. They believe that the agent can do a better job. And so what you’re doing here is you’re presenting a great offer, so that you get seriously considered, but then the agent then has the ability to present it to the client and say I’m going to come back to them try and get more. And then when you do offer more, that agent looks really great to their client looks like they’ve gotten a great deal for their client, the client who’s selling the property feels better because they didn’t feel like they took the best they took the first offer and they could have got more so they’ve got this seller’s remorse sort of thing happening. So while it is a bit of a game that sometimes you know, you might wish you didn’t have to play and your way they don’t negotiate and love it for me, I’d love to just be like, here’s my best offer, take it or leave it. You’ve got to learn that okay, this is the expectation that someone’s selling their property has an expectation of the process that’s going to happen. If you can follow that process, and again, it comes to you’re working with the agent to make them look good to the seller. So deal can get done for everyone. And so that’s just like a key little nugget, when it comes to negotiating is that sort of like teamwork, you and the agent, making it look like a real hectic negotiation, even when it might not be fully man. So what we do is, at the point of submitting the first offer, I’ve already crossed out three other offers. So let’s say we’re trying to buy the property, our initial offer is 500k. I’ve crossed out a 465 or 485. And then I’ve got my 500k offer there. So it looks like we’ve already been going back and forth. What do you mean, you cross it out? Like so in all contracts, there’s a purchase amount or an offer? Yeah. And so I’m actually like doing some of the agents work for them. So that it looks like we’ve already gone back and forth three or four times before the initial offers gone in. And that’s just something that I’m doing in this hot market that’s working very well. And then as soon as I’ve sent the contract or the offer through to the agent, I’m calling them again, hey, it’s just come through wanted to give you the heads up, it looks good, reaffirm the story, and then also go, what is your plan from here again, because what I find is that 90% of agents cannot do their job. Like they’re just not doing enough volume to actually do it really well. Like, if you’re working with someone doing 30 to 100 sales a year in the market, they’re gonna do their job. Anyone doing less than 30 is not great at what they do. They’re not going to be like the best of the best. They’re not doing enough deals to be really good. Yeah. And so I’m going What’s your plan? They’re gonna tell me that plan. Most of the time, it’s like, I don’t have one. And so I’m like, this is what we’re gonna do, we’re gonna present this offer, we’re gonna do this, this and that. Do you put a time clause on the offer? Bye. Bye. Don’t in the initial offer. But I do in the second one. Yeah. Because I don’t want to put pressure on an agent who I’m still establishing trust with. Yeah, time pressure kills deals as well. Okay, so we’re presenting that first offer, you’re calling the agent, ask them what their plan is, if they don’t have a plan. What are you saying this is, when you’re saying this is a plan? What’s the plan, the plan is, this is the time this is the day that you’re going to sit with the client face to face. And this is the way that you’re going to present the offer. It’s a pre approved client from Sydney, who’s looking to hold this property for the next 30 years who, and this works for this company in this job earning this money and selling the story has these kids their their names, like really setting it up so that when they’re sitting there and the person’s like, no, they’re like, well, he’s a young guy from Sydney. And it’s his first investment or It’s his first time and he wants to own it forever. And there’s like a default process. And it’s like, and then obviously, you want them to present that to the client that day. That moment, like, like now, I’m actually setting it up in the first call before my first offer, what’s the plan? When are you going to go present this? Yeah, you know, like, I want them to be going and doing it like immediately. And a good agent will be around there within three hours, online face to face versus calling the because people can say no, so easy on the phone, because there’s no emotion when an agent, a good one is sitting down with someone and telling the story of why it’s a good offer, there’s a much higher likelihood of someone to negotiate. Now that’ll be what I’m looking for is let’s say it’s on realestate.com for 550k or putting the initial offer at 500. And we ultimately want to buy it for 525. I’m looking for them to come back with a counteroffer verbally or in writing $1 below 550 and then I know it’s Game on. Yeah. Because that’s that’s how this works. So if they’ve if they’re provide even $1 down, it means a negotiable. Yeah, a smart agent will actually go above the purchase price and like, you know what I mean, but not
Unknown Speaker 23:51
from that direction.
Yeah. So what will happen is I’ll get feedback. That’s all I’m looking for my first offer, hey, these terms need to be tightened. Hey, they’ve actually decided they’re going to wait for the weekend. Or, hey, like, here’s a counteroffer on price. And I’m like that that’s the blood in the water. As soon as they counter on price. I’m like, okay, we’re negotiating. Talk to the client, our client, or if it’s myself, you know, this is the comparable market sales base in the current market. It could be 10 grand below these ones, or it could be 50 grand above, we’ve got no idea. What would you like to do? They go well, based on these comparables, I see value here. Cool. We present the next offer at like 525. And at this point, we’re like, we need this we’re going to be working between now and one o’clock on Friday. We need this absolutely signed off all the deals off the table. Yeah. And so that’s a big thing in a hot market as well is that when you do get to that point where they’re negotiating and you know you both moving on price to then put that time pressure on to say, okay, we need this deal done before the open home. Otherwise, the deal’s off. table, because what happens if you just let it run? And you’re just it’s an open deal. It’s just like, okay, sweet. Like, we can just get this out my pocket. No, I can do the agents like sweet I can sit on this got this up my pocket, but also when the open home happens, they can say we’ve got a written offer for 525 what they’re doing at the moment, it’s not legal, but that’s what they’re all doing. Yeah, all they can say, you know, we’ve got a written offer, not enough, they can’t even say that they they can say that they’ve got an offer. But what they’re doing in this hot market for the first time in five and a half years doing this business is they’re getting our offer on a Friday. And going we’ve got this, telling everyone else about it. And then they’ve bumping the market up artificially on that. And so I’ve, that’s why we have a third strategy as well, yeah, so you want to have that time clause in it, because then like there’s pressure on them to they don’t know what’s going to happen at the open home, like there might not be any interest after that. And they could have got this deal done. So there’s like a bit of pressure on them. But it also stops them from just holding on to your offer and using that as leverage with other people to get more interest in the home at a higher price, as well. So we’ve done a full video on how to negotiate in both cold and hot markets, which I’ll link to down below. And we go more into that like two step or three set negotiating process. But what are the other scenarios? So okay, let’s say we do that time pressure, then they agree to it, we sell great, you know, we’ve gone that one, they might go, No, we want to go to the open home, do you then withdraw your offer? You know, I won’t present the offer if I know they’re going to the open home, which is why there’s like the buy off market the buyer before the weekend where they’ve told me I can get it done. And then there’s the third strategy, which is they’ve told me on the first call that we’re not going to sell to the weekend. I’m like, cool, I’m not gonna send you shit till the weekend. You know what I mean? Because I’m not gonna let you wave this around to everyone, which they will do because agents cannot help it. Do you have any other offers? Yeah. What’s that offer? I can’t tell you. It’s close to this. Yeah. And it’s like, key man. Like to do that. You need to be above this if you want to be. Yeah. So it’s like how I’ve got an offer. That’s to like, sweet, like, so there’s 1000 ways to get that information. Let’s say in an average week, I put in six offers, like I personally are putting in six offers a week for clients. And we’re buying probably four properties to or bought before the weekend to abort on the weekend. And we’re losing two on price. So you know, they’re the averages is a professional doing this, who’s done it $250 million worth of times, you know, it’s still tricky, and it’s not guaranteed the average person is probably one in 10. It’s gonna be way harder, way harder. So okay, so let’s say the agent does want to take it to the open home, we’re not going through that negotiating process prior to the open home. Let’s say we go to the open home, there’s obviously going to be some interest in a hot market, there’s going to be 20 to 150 groups. Yes, right. That’s how hot we’re talking. How do we approach things to negotiate? Firstly, I don’t go to the open home because it’s a complete waste of time you book a private one on one inspection with the agent before it? And if you can’t that just like a rule for you, you won’t go and go into your ATM since I started the business. Yeah. Because why am I going to go on the weekend when I should have already known where the markets at what I’m prepared to pay and have everything ready for it? Yeah, plus, I don’t want to go and be one of the 100 I want to go and have a meaningful relationship to talk about my kids to talk about my pre approval to talk about my job to like sell the sizzle that unlike the real person, not the one of and they’re going to remember if you’re the only person on a Wednesday afternoon, they’re going to remember you versus one of 60 people on a Saturday when they’re also doing for other or five other open homes. So what I do, if it’s a Saturday, the I’ve called the agent, it’s the first call the properties Come on a Wednesday, so you’ve still seen it before the open home, but the open home goes ahead.
Sometimes I buy sight unseen at the moment. And then just as a due diligence clause put in, I need to inspect the property to them. But when you buy 150 properties a year and look at 2000 a, you know, you know what the property is? Well, before you see it. Yeah. Especially with like the 50 or 60 checks we’re doing before we’re even looking inside the house for the other 100 things we’re looking for. So again, like there’s a difference between doing it every single day for 50 hours a week for five years and trying to figure out one property in your lifetime. And that’s why it’s an unfair market. Yeah. But let’s say that you’ve talked to the agent and he said, we’re going to the first open, you’re like cool. So what I would do is call the agent every single day, Wednesday, Thursday, Friday, what feedback have you been getting from the market? What are people saying? What comparable property or address Can I look at that you’re like pricing this on? So I’m trying to get that same conversation every single day? Does that make you look like a bit silly? No, because the more times you ask a question to an agent, the more different answers you get and the closer to the truth. Yeah, so it’s like let’s say there’s an open home on Wednesday night. There was groups there. I’ve already seen it on Wednesday morning. I’ve already asked those questions. Hey, what was the feedback from the Wednesday night? There are six groups through two of them didn’t like it. You know, two of them loved it. They’ve sort of said around about this price swayed, then there’s another private inspection on the Thursday and Friday because it’s hot, and agents are just like, let’s get the momentum. What did those people say? So he said, originally 600. But the feedback he’s giving me now he’s comparable sales 550. And he’s got three people saying 530 to 560. And I’m like, okay, like what he said originally, which is a throwaway line to the 100 calls he’s getting is different to what it’s actually going to go for. Okay. So then all I do is I talk to the client, I look at the comparable sales, if I’m buying for myself, and then I put in my absolute best and final offer. And I do that on the Wednesday. And it’s just sitting there in an email. And then if the agent says to me, you’re saying you don’t put in an offer before the open home on the weekend? No, I just put it in writing in my own email. And I don’t do anything with it. So usually send us no drafts. And then I will keep talking to the agent every day. I’ve already already know what I’m going to put in. And I might have to adjust that slightly based on feedback. You know, last weekend, I brought a property for 20 grand less than my initial offer on Wednesday, I was prepared to pay 580. by Saturday, I put in an offer at 565 and bought it as your best offer my best offer on Friday. Did you say no. So I keep it in drafts because peep agents in a hot market are taking those offers and going I’ve got one. Here it is. Here’s what it is. And they were like burning us every single weekend even though it’s wrong. Yeah, that was just telling people what they got. And magically, every fucking weekend I’m coming in on a Monday and I’ve lost the property because they’ve used an offer that’s 10 grand above what I think is reasonable. In that’s what they’re doing in a hot market. Yeah. So I’ve got to this third option. I know it’s going on a weekend, I’ve got my offer ready to go by Friday sitting in drafts in an email. The agent says I’m, I’ve got open homes till two o’clock, and then I’m driving around at five o’clock, I send it around at 430. And I give him a text. Thanks so much for everything they just sent you through the offer. It’s in your email, really excited. I think we’ve put our best foot forward, and he can’t use it. Okay, so yeah, so the open home has already happened. It’s also coming towards the end of the business day on a Saturday. So you’re not presenting a two o’clock where he can then back and forth with other people. Like he’s trying to close this deal before the end of the day. You know, you send a kind of the last minute, and I’m guessing in that email, are you stating that this is like my best and final offer lately not negotiating on this one. It’s just it is it is what it is, this is what I’m presenting. And then it becomes one of the offers that will go towards the person selling the profane might take a property on Monday had 13 or 14 offers. And you know, sometimes it successful sometimes it’s not. But if you know your comparable sales from realestate.com sold or RP data, if you want to spend money running it, and you talk to the agent multiple times, you already know what your best is. And if you going into this game emotionally, you’ll pay more every day of the week in this market. So
Ryan M 33:17
really what I’m seeing from you here is like you’re not a lot of people in a hot market are going to be negotiating with other buyers and getting into this bidding war. And basically everything that you’re doing here is trying to stay out of that bidding war as much as possible, and also not getting emotional, as much as possible. So yes, we can negotiate. And you know, come back with a better offer before the open home, if they’re willing to do that. However, if they’re going to open home, then expecting there’s going to be multiple offers on the property. And so then you just present your best and final offer there. And then then it’s like either it’s like a yes or no for you either they’re going to accept it, or they’re not or someone’s pay too much. And I’m stoked because it’s driven up the values of my other clients properties. And I just, I just want to say he missed that one. And okay, on to the next one, taking the same process on to the next one in it from scratch again. And that’s the thing in a hotter market, it can be hard. And you’ve got to expect that you might miss out on more properties than you would in a market that’s slower where there’s less people trying to buy. But that’s just part of the game. And that’s part of the process between March and August last year, we were the only buyer in some suburbs in Brisbane for six months. I bought that many properties for 50 to 100 grand below what they’re worth now. Yeah, it’s just like, that’s like when you’re the only shopper. All of the agents are freaking out. None of them are making money and you can buy anything. But in a hot market. You’ve got to get real about the sense that like, Where’s the market at? It’s hot right now in Sydney and Melbourne. But it’s already grown in those cities by 100% the last 10 years so I’m not rushing into Sydney going it’s hot. I might make 20% in the next three years off 100% gain already. Yeah, I’m going into Brisbane and going in some suburbs that we buy, it’s cheaper than it was five years ago. In other suburbs, cheaper to buy than it was 12. According to corelogic, it’s like, I’m coming off the very, very low base. And I’m like, it’s all relative. So if I’m paying 10 grand more for this property than I did last month, it’s coming off as zero run for 12 years. Yes, is 100% run. And so I’m like, much more comfortable paying a bit more in Brisbane right now than I would be in Sydney, which is already bubblies. Yeah. So it’s like knowing your history of the market, knowing how close it is to peaks or all time highs, and how long could this run for? And that kind of comes from a deep market knowledge that you’ve got, and that I’ve got through both experience, as well as learning a lot to understand. Okay, how long will this take before it peaks, and then declines? Which markets obviously, like inevitably do? So? Yeah, it can just be, there’s a lot of things to consider. But when you’re investing in a hot market, you do need to be on the ball. The game is on. So hot right now. So hot. But yeah, if you’re, if you’re thinking of investing up here in the Brisbane market, and you’re going to need some help given a hot market, or maybe you’re out of state, then Ben and the team over Pumped on Property, do run a buyer’s agency service where they help clients, select few clients every single month, purchase these properties, and they go through the process and do it like I love the fit, by the way, for most people, like they’re uncomfortable. I’m like, that is my comfort zone. I freakin love it. That’s your game. That’s what you love. That’s where you thrive. And so they do offer a free strategy session. So if you want to get on the phone to them, talk about the Brisbane market, talk about where you’re at where you want to be, what sort of portfolio you want to build and what might fit into that and see if it’s a good fit as well go to onproperty com.au, forward slash session, and you can book in a free strategy session and get on the phone to them. And then they can give you some tips and things like that, you can then take that and use it yourself. Or if you decide to work with them, and it’s a good fit, you can hire them and get them to do all the legwork in negotiating this hot market. So you don’t have to. So again, that link is onproperty. com. au forward slash session, or I will link up to it down below as well. So you can just go ahead and click that book at a time that suits you. Check it out. Otherwise, we wish you the best out there in whichever hot market you’re going after. And until next time, stay positive