7 Things NOT To Tell A Real Estate Agent (Ep125)
When buying a property sometimes it can pay to keep a little something up your sleeve. Telling the real estate agent too much information can cause you to pay a higher price for a property and put you in a situation where you don’t have the maximum negotiating power that you could have.
Today i’m going to look at 7 things NOT to tell a real estate agent so you can make sure that you’re in the best position when it comes time to negotiate.
So what are things that we don’t want to tell our real estate agent or keep hidden away when it comes time to buying a property?
1. You’re In A Rush
Well the first thing not to tell your real estate agent is that you’re in a rush. If you just sold your property and you’ve got a certain amount of time when you need to get into another property (otherwise you can be in dire straits) you don’t want to let your real estate agent know that!
Because they could use that against you. They could hold out against you and extend time frames on purpose so that when it comes to it you’ve got such a short time frame to buy and to settle. This may put you in a positive where are willing to pay more money just to get it within that timeframe.
You don’t want to let them know that you’re in such a rush to do it because they can use that against you.
2. How Much You Are Willing To Pay
Thing number two NOT to tell your real estate agent how much you are willing to pay. Don’t give them your top figure but keep that up your sleeve.
Keep it hidden because what they’re going to do is try and get you to pay a higher price. Also, they’re probably going to take your top figure and use it as negotiating power with other potential buyers. They may try and force you into a bidding war.
When you’re making an offer don’t make an offer of $560,000 and say “look here is my offer $560,000 but the maximum I’m willing to go to is $580,000”
The real estate agents going to say “awesome! This person is willing to pay $580,000. Let’s see how close we can stretch them to that figure.”
3. That You’ve Just Missed Out
Number three not to tell your real estate agent is that you’ve just missed out on another property and you’re really upset about it.
If you’ve just missed out on a property and you felt you didn’t do enough to get it, chances are that you are in a highly emotional state and you may go ahead and purchase a rebound property.
So keep your emotions within and don’t get too excited or don’t get too upset with a real estate agent. Don’t tell them are you so desperate to buy because you just missed out on a property.
4. That You Absolutely HAVE To Have It
Number four is that you have to have it. You don’t let your real estate agent know that you are willing to buy this property at any price.
That you’re willing to pay over and above what this properties worth because it’s absolutely perfect for you and your family.
If they hear that from you and if they know that then they are going to continually push you to try and get the highest amount. Or they can easily get you in a bidding war against someone else.
By staying calm, cool and collected and not all letting that out you can negotiate more effectively. It’s a hard thing to do but if you can do it is going to help you.
5. You Have No Idea About The Market
Number five not to tell your real estate agent is that you really have no idea about the market. No idea what a property is worth.
Because they can then advise you on what a property is worth (sometimes misleading you) and what the market is doing by taking specifically examples that back up their argument.
Even though the property market might be going downhill fast and even though the area might not be that great an area. If you let them know that you have absolutely no idea what the property market is doing well they might lead you to think that the property market is booming or that you’re going to miss out even though the property market is actually in decline and it’s a buyers’ market.
So don’t let them know that you have no idea – preferably get educated do some research and find out exactly what the area is doing
6. That You’re An Outside Investor
Number six is letting them know that you’re an outside investor. Now I don’t think it is a bad idea to let a real estate agent know that you are outside the area and you don’t necessarily know the area in full.
But letting them know that you’re an outside investor and you just want to buy some property in the area – well again they can use that to their advantage and they can spin things to you to make it sound like “as an outside investor this will be a great area to invest in…blah blah blah blah”
Then get you trapped into buying a property in an area that is not necessarily going to grow.
You can say you’re from outside the area, you might let them know that you thinking of moving to the area (even if you aren’t) or that you’re purchasing it to move in the future.
Ask them where the good spots are and so forth.
7. Your Future Plans To Add Value
Number seven is not to tell the real estate agent your future plans to increase the value of the property.
Maybe you’ve got future plans to split the property in 2 and turn it into a dual occupancy maybe you’ve got future plans to do an extension or you’ve got a creative way to turn a garage into a granny flat. For example: It’s only going to cost you $10,000 and it will generate you a massive amount of income each year.
Because by telling them your future plans two things could happen.
- They could take your future plans and use that to sell to other potential buyers to say “you could do this!” “You could convert this into a granny flat”, “you could add this extension”, “you could just put a wall here and it would basically split into two different properties”. You don’t want to give away all your cards because they will use that to sell to other buyers.
- They could use that information to up the value of the property. If they can see a property valued at a certain amount of money. However, when you put $10,000 into it going to be worth $40,000 more well they might want to tap into some of that profit by saying “well look if you pay $20,000 more you’re still going to put in $10,000 but instead of getting $40,000 back you only get $10,000. That’s still pretty good and I’ll take $20,000 myself in added valued for my vendor.
As you can see all I’m saying is try not to give too much away and try not to put yourself in a position where the vendor and the real estate agent have all the negotiating power against you and you have no negotiating power against them.