Talking to real estate agents can be hard. Here are some tips on how to get the most out of your conversations with real estate agents to give you the advantage and save you thousands.
Ryan: When it comes to investing in property, something that people often get nervous about is talking to real estate agents and negotiating with real estate agents in order to get the best deal.
So today I have with me Ben Everingham from Pumped On Property, my buyer’s agent of choice and good friend to talk about how to talk to real estate agents, how to identify the best opportunities and best agents to work with so that you guys can go into this quite confidently.
So hey Ben, thanks for coming on today.
Ben: Good day Ryan, thanks for having me man. I’m just loving what’s happening in your background by the way. Like for anyone that’s listening to this on the podcast, Ryan is doing this wicked trip around Oz right now and I’m just watching cars going past, people running past with dogs, kids skating past, it’s just sick.
Ryan: Yeah, so at the moment, we have moved into the van so we did up a camper van and have moved in. We’ve been in for about three weeks and it’s rained literally every day except one which has been hard. At the moment, we’re in Lennox Head which is a really nice area, we really love it here.
But it’s raining, so we got an Air BnB. So the wife and the kids are inside and I’m here in the van, working. Sweating it out ’cause it’s a bit hot in there. But yeah, it’s a good setup, we’re having a good time doing what we want to do which is what we wanna help you guys do as well, live the life that you guys want.
And so part of that is buying property and part of that is talking to real estate agents. So in the last video if you guys watched that, we did come across a really good tip from Ben which was actually choosing the right real estate agents to work with when you’re starting and actually understanding who those real estate agents are. So do you wanna talk a little bit about that, Ben? How do you find about the real estate agents before you actually give them a call on the phone or turn up for an inspection?
Ben: Yes, so I think the way that this came about was just obviously it’s important to understand who you’re working with. So I know all of us that have partners, obviously did our best to understand our wives when we first got with them and that definitely helped me sell myself to my wife.
I didn’t talk about myself for a long time until I understood who she was and what she was looking for ’cause she’s way too good looking for me to actually be with normally.
So I suppose it comes back to something like that. Like understanding the person you’re negotiating with is very important and so the way to most simply do that I suppose is if you’ve identified a property that you really like on realestate.com or domain, click on the real estate agent’s name and a whole lot of that history, particularly, over the last 12 months but even longer term than that, now that realestate.com’s grabbing that information, shows up.
Shows which suburbs they’re selling property in, how many properties they’ve sold in each of those suburbs in the last 12 months, how many properties they’ve sold in general and exactly what properties they’ve sold. So you can start to go, does this guy sell cheap stuff? Does he sell unrenovated? Does he sell really high quality stuff? Does he sell that stuff for a premium or below market value?
And then you can begin to get an idea before you even pick up the phone of who you’re gonna be dealing with. And the reason that’s important is because some people are amazing at their job and they sell a huge amount of property because of that and other people aren’t that amazing at their jobs and probably cost their clients more than they make them to be honest with you, if they’re not doing the right thing by them.
Ryan: Yeah. And so the figure that you gave in the last video was real estate agents who have sold under 20 properties in the last 12 months generally tend to be easiest to negotiate with than real estate agents who have sold over 20 because the ones who are the top performers, they got less financial pressure themselves in order to sell that property and they’re generally likely to be better at their jobs as well, making it even harder to negotiate with them.
Ben: I saw a really crazy statistic recently on I think it was realestate.com.au and it was 92% of real estate agents in Australia earn less than $50,000 per annum.
Ben: So when you think about real estate agents you don’t think about the average person making less than 50k because even the 50k guys drop out with $100,000 sports car.
Ryan: [crosstalk 00:04:04]
Ben: It’s on finance, on the credit card.
Ryan: They all rock up in these really expensive cars.
Ben: Yeah, and it feels intimidating. It’s like “Man, this guy’s got his stuff together.” But it’s all just a show. Like some of them … the real top performers that I know that it’s got nothing to do with any of that stuff, it’s really about doing the right thing by people and helping people but there’s a lot of people in between obviously as well that can be very sophisticated sales people and flashy but most of the very good people are well, well, well past that.
Ryan: Yeah. So I think it’s really good to get an understanding of the real estate agents you’re gonna be working with, as Ben said, what type of properties they sell, how much they’ve sold, so you can get an idea of whether you’re gonna be at an advantage when negotiating or if they’ve got the advantage.
You’re also saying that there’s potential to identify opportunities for the biggest discount before we actually speak to agents. So how do we do that?
Ben: Yeah, so something that I’ve identified recently is that there’s definitely types of people that you can buy from, obviously personality types and playing to personality types which is important to understand but more than that, there’s people that are selling a good amount of property and as Ryan said, don’t need the money.
And then there’s the complete opposite of that. So people that I love to buy from as a buyer’s agent who bought 129, 130 properties in the last 12 months. The first one would be an out of area agent. An out of area agent is like a unicorn, like it’s my favorite thing to walk across on a day to day basis. And the way that an out of area agent gets a listing, like you start seeing these people everywhere now. It’s like one of the first questions I ask is, “How many sales have you done in the last 12 months? What’s your plan for the next 12 months?” Just to get them thinking about where they are and where they wanna be.
And then I go, “Where is your area? Are you selling much around here?” And they can help themselves but say things that they shouldn’t say and release too much information. They’ll say, “Well, this isn’t an area they focus on, I’ve picked it up through either a rent roll or I’m doing it as a favor for a friend.”
And I’m just like, “You’re not doing anyone a favor except my client, man, because this is like an opportunity right now.” Even if they’re a top performer out of area, they don’t wanna drive to another area that they know nothing about which means they generally appraise it really, really cheap or really, really expensive which are equally bad.
Yeah, so after they’ve appraised it the wrong way and they’ve realized that after a couple of weeks of owning the listing, it’s becoming a bit of a pain in the ass because no one’s bought it yet and that’s … you know, so you’re definitely further away than their normal territory, their job then turns from trying to sell the property as a favor or because they’ve got a listing and they thought it would be easy to getting this thing off their books as quickly as they possibly can. It’s an immediate switch in their head.
And so these out of area agents are fantastic to negotiate with because you know they’ve got motivation to move it quick and you know they haven’t done the right thing by the person to pick it up. And they are the people without a doubt, like I’ve bought one of these myself in December last year where this out of area agent that was doing a friend a service, sold it to me for about 75 grand below market value for an unrenovated product but this was completely renovated.
So there’s a huge opportunity to identify these people. They are by the far the lowest hanging piece of fruit in the market that most people don’t know how to identify early enough.
Ryan: And could you identify them just by looking at their past sales history and what they’ve sold? If it’s an out of the area.
Ben: 100%. So I don’t let my team go out without clicking on the agent’s team and having a look at what they’ve sold and obviously buying large quantities of property in specific area, you know who’s who in the zoo quickly anyway but if you don’t, you can look at the suburb name and then you can look at where they’ve sold in the last 12 months and if that suburb hasn’t shown up and it’s not in within a five kilometer vicinity of where they’re buying from or they’re generally making their sales from, sorry, you know that they’re pretty much out of agent and they’ve fluked that listing one way or another.
Ryan: Yeah. So that’s a great way to identify interesting agents to work with with the potential for good discounts. Obviously it’s not gonna happen every time but more often than not, hey?
Ben: You know, if there’s a market where there’s 100 sales a year, in any one market that’s got 100 sales, there’ll be three people selling 80 properties a year which means if you think about it, one out of every five times or 20% of the time, you’re gonna bump into someone that’s either needing to sell to keep a job or an out of area agent.
So there’s a bigger opportunity there than you think about when you look at bigger averages.
Ryan: Yeah, that’s really interesting. And so let’s say that we’ve found a property, we’ve looked into the agent and now it’s time to either give them a call or show up for the open house. What sort of tips do you have in talking with them, what to share with them, building relationships with them et cetera?
Ben: So I think building a relationship is the key, even though they’re not gonna take you that seriously because one, you haven’t provided them with a written offer and two, he might only do this one transaction with you. If you can build a relationship with the person and show them that you are motivated and you don’t waste their time then it can be a very powerful way to start a relationship.
So when I go into the property, I do the … the first thing I do is I sit … like I talk to the agent for between two and five minutes just to get to know them, to explain my situation and what I’m looking for. I then get the agent to show me, if there’s not too many people at the property, to show me around.
Now I don’t, as a person individually and as a team, I never ever show up to an open for inspection because what a waste of time. And the open for inspections never coincide with when I wanna do it which is mid week. Like why would you want to go and see a property on the weekend when everyone else is there and you’re not getting the right information from the agent. So book a one on one time with the agent to go through so that you have their full attention and focus. And you can build a meaningful relationship if you really like the property. So you spend that-
Ryan: So is that something that you guys always do? Is that you get a one on one inspections rather than-
Ben: Every time.
Ben: I can’t remember in the last three years where we rocked up to an open home because it’s just such a waste of time.
Ryan: So what is it about the open homes that makes it a waste of time? ‘Cause I know there’ll be so many people listing to this and they’re spending their weekends, going to open homes, they’re taking the afternoon off work to go on a Wednesday at 4 p.m.
Ben: The worst thing about open homes for me is it doesn’t suit the time that I wanna do it. I’m sure there’s plenty of people that don’t want to bail work at 4 o’clock or to get to the open at 3 o’clock, they would much prefer to go do it in their lunch break or they’d much prefer to do it before work or after work in their own time.
So that’s the big thing for me. Like you know, you control the outcome. If you can negotiate your own time on the property against the good agent, you should be able to negotiate a discount as well. Like it’s one of the things that kind of throws the power balance from them having the power of showing it to everyone to you going, you’ve made time to be here for me outside of normally what you would do. I’m a serious buyer because I’ve wanted to arrange a one on one and it kind of sets the expectation both way that they’re prepared to do something for me and I’m prepared to do something to help them as well.
It’s a psychological thing plus when you’re inspecting 40 properties a week, you just can’t get through all of them between the hours of 9 a.m. and 12 p.m. on a weekend either.
Ryan: Yeah, okay, so that’s a great tip for people. Try and negotiate to see the property by yourself.
Ben: Yeah, and like most guys are gonna say no and you just need to ask why. Like I literally, if they say no, I say, “Why can’t you do that, seriously, why?” And then they’ll make a time for you because it’s awkward to answer that question.
Ryan: Do you say, “I can’t come on the weekend?” Do you have to say that sort of thing? Like “I can’t attend at your time.”
Ben: You can’t tell a real estate agent that you won’t, you’re not prepared to work weekends because this poor person has been working weekends since the day they got into the industry. And so if someone has a weekend off, it’s like the dream. So you definitely don’t tell them that you can’t make the open or you don’t do Saturdays but make sure that they know that you can’t make the open home for whatever reason it is.
Ryan: So you just don’t give … you just say, “I can’t make it.”
Ben: Yeah, unfortunately I can’t make the open home, but how does this time suit you on this day and just assume that they’re gonna maybe not say yes to that time but play ball one way or another.
Ryan: Yeah and then ask them why if they say, “No, we don’t do that.”
Ben: Yeah, just say, “Why?” Like if you’re in Bali walking around the streets bartering, you’d ask for a discount but in Australia where it’s not part of our currency so we don’t ask people that question but it’s just a question. Like the agent’s not gonna go because I don’t wanna waste my time going out there for your one on one when I know it’s just gonna burn me. That’s what they’re thinking, I mean, let’s get real.
So you know, I’ve kind of gone a bit of topic there, sorry.
Ryan: Nah, but that’s good. It’s good to have that sort of tip for people to help them in their negotiation and to help them actually see the property without the flurry of people and the stress associated with open homes as well.
Ben: Yeah, like the agent will know a lot more about the local area. And if they are a high performer and the property then you will and there’s a lot of meaningful information you should be picking up at the inspection, it’s not just going round and going, “Hey, does this look like a nice house? Could I see myself living in it? Would I buy it as an investment?” It’s really about making the use of that time.
And so back to what I was trying to say was spend that first two to five minutes building a relationship with them, the way that you build a relationship in the simplest form is to try and have a conversation about what they’ve done in the past, what they’re trying to do for the foreseeable future. Like I just leave it that simple and then I say-
Ryan: Doesn’t that feel weird to call them up when you’re looking for a property and to ask them about themselves?
Ben: It’s not on the phone call, it’s when you physically get to the open.
Ryan: Okay, yeah.
Ben: Yeah, of course it’s weird on the phone. [crosstalk 00:14:22]
Ryan: You call them and you’re like, “What are you doing with your life, where do you see yourself in 12 months?”
Ben: What’s your star sign? My computer is about to go [inaudible 00:14:32].
Ryan: All right.
Ben: So this is after the call. What’s your star sign?
So and get them to show you … ask them to show you around the property. They’ll point out some of the positives and some of the negatives and that’s an opportunity for them to speak and for you to listen and by listening, you’re building rapport with that person and they’re gonna share more with you than you may be asking them for in one way or another. It’s really an opportunity to listen to what they’re truly saying.
And then after you’ve gone through that, you then get to the pointy end of the conversation which is basically them wanting to know, are you a serious buyer, what do you think of the property, can we make some business happen here type thing? And that, again, is an opportunity to tell them exactly what you want, give them meaningful feedback but definitely don’t commit to any sort of … they’re gonna ask you about price one way or another, don’t comment on price, don’t comment on terms but let them know that you are a very serious person to have a conversation with if you like the property enough to seriously place an offer on it.
Ryan: So how do you do that? Like if they’re saying, “Oh, what do you think about the property, are you gonna make an offer?” Or they say, “How much are you looking to spend?” All those sorts of questions. Do you just-
Ben: Just because, again, someone asks you a question doesn’t mean you have to answer it. It’s really uncomfortable to do that as a human ’cause you … there’s awkward space for about one second but they will fill it, ’cause they’re an agent.
So like learning to do that is an art form and it takes a little bit of practice but just because they ask you, “What do you think the property is worth?”, like Zoolander style, let me answer your question with another question, like “What do you think the property is worth? Where is your comparative market analysis? What are some examples of properties you’ve sold where you think this is comparable against?”
And then it throws them around into another five minutes of talking about stuff that they shouldn’t be talking about again.
Ryan: I’m just imagining you in Zoolander right now. Let me answer your question with another question.
Ben: I’ve lost three quarters of your audience, they’re just like, “That guy is such a-”
Ryan: Dude, I absolutely love that movie, that’s like one of my favorite movies to the point where I like I haven’t watched Zoolander 2 because I don’t want to ruin my impression of Zoolander 1.
Ben: Don’t watch Zoolander 2. Like Zoolander 1 is amazing and Zoolander 2, they’re trying to do the same thing again.
Ryan: Yeah, I watched [inaudible 00:17:01] and that just wasn’t worth it. I was just … shouldn’t have done it.
Ryan: Okay. So we’re saying so don’t give away too much when it comes to price or when it comes to terms. What sort of information do you advise giving to the agent to let them know that you are serious but without giving too much away?
Ben: I’ll let them know that I’m actively in the market in this suburb right now. So I am looking for a property and the way that I do that is I explain what I’m looking for in terms of a certain land size, certain number of bedrooms, bathrooms, I’ll let them know only if the property is meaningful that I do have an interest in this property and would seriously consider placing an offer at the right price.
And I also let them know that I do have a preapproval in place because one out of every three offers in Australia at the moment is not going under contract because of finance. Most of the time it’s because people use finance to pull out of contracts because it can be like a get out of jail free card in some states in Australia.
Obviously talk to your licensed solicitor about that before you ever try and do that but most of the times smart people will have a finance clause in their contract to protect themselves so they can pull out.
But an agent’s worst fear is doing a month worth of marketing and open homes on a weekend, selling a property, taking 14 or 21 days to get to a point where they know it’s officially sold meaning it’s gone under contract and then having that fall over because someone’s pulled out on finance and then they’ve lost seven weeks which means they’ve lost their full opportunity to sell that property at the most premium price and now they have to start from scratch again and build momentum.
It’s a pain point for an agent. So explaining that you have a preapproval which means you can buy the property and you’re not gonna terminate is a very powerful thing. Whether you terminate or not is at your discretion later on but having that initial conversation will build a lot of credibility.
Ryan: Yeah. And that’s also … you wanna let them know you’re serious but then you also wanna make their life easy, right? They are there to sell a property and to make a commission and earn money as a result. That’s I guess their motivation behind it. And so you wanna help be the easiest buyer for them as well. An easy person to work with that they can definitely do business with.
Ben: That’s 100% it. Just being a good person that’s relatable, that’s why I ask questions about them because in the real world, if you’re mates with someone, you find out a bit about them, they find out a bit about you and that’s a real meaningful relationship. And you know, not wasting their time. Like these poor agents do have a hard life, man.
It’s mentally [inaudible 00:19:51], like every time they make a sale, they have to go find another place to sell because … you know what I mean? It’s like this constant life thing that just never stops for them.
And when they get someone that treats them with actual respect that doesn’t waste their time, that is a serious bar. That’s all they are looking for as well and most people just waste their time and don’t treat them with that respect.
Ryan: Yeah, well that’s something that’s so key I think. It’s just that treating them with respect and treating them like a person because it’s they same as if you’re-
Ben: They are.
Ryan: Yeah, well, right. But it’s the same as if someone works in a café or something, as soon as you show someone like a little bit more respect than other people would, like you can really make someone’s day by doing that. And you can make the negotiating process so much easier with the agent if you build that rapport and you show them that respect so that they feel appreciative to you ’cause of the way you treated them.
Ben: 100% and these goes a long, long, long way. Like we might not be able to talk about all the negotiation stuff right now but it can go a long way to the sense that we’ve got agents that we’ve built really meaningful relationships with and a meaningful relationship is based on honesty, it’s based on not wasting someone else’s time, it’s based around doing what you say you’re gonna do.
And so I will always give an agent a quick follow up text message after I’ve gone to the open for inspection going, “Thank you so much, I’m gonna have a really serious look at this in the next couple of days and I’ll come back to you either way.” Because a lot of people go, “Yeah, I’m seriously interested,” and then you never hear from them again. And it’s you know … so that goes a long way.
And then when I place an offer, I don’t verbally place an offer, 50 grand below what it’s listed for knowing that it’s listed at market value and go … I’m just gonna play the game and yeah. If I do 300 offers, maybe one of them will be accepted.
The agents just laugh at that. It’s like an inside of industry joke that those people are just wasting their time. The agent will play the game with them but they know how to identify a serious player within two seconds of you walking into the property so that’s what they’re really good at and you’ve gotta recognize what their skillset is. And not give too much away but enough away to know that you’re a genuine prospect if you do like the property.
Ryan: Yeah, and negotiating, we’ve covered in previous videos and I know we’ll talk more about it in the future. But I hope this gives people an understanding and a confidence to go out and to talk to real estate agents, to build rapport with them, to find out about the property, to choose the best agents to talk to and as well to let them know that they are serious buyers so then negotiating can start happening. And at the same time, not giving too much away. So the real estate agent doesn’t have it over them, basically.
Ben: Yeah, you gotta be careful with what you say as much as the agent’s trying to be careful with what they say. Like the agent to really look out for in terms of tips for talking with an agent is the one that comes across as cold but is really not. Like the agent that has been around the industry for so long that when you ask a question, they give you an answer, whether it’s the answer that you wanna hear or not. But they give a very direct answer.
Like those direct agents are the ones that have been in the industry for long enough to know that the games are over. Here is what it is, take it or leave it type thing. And they’re the ones that you might respond like, “Oh, shit,” they are being very direct and they are being mean or they are not communicating in the way that we communicate with our mates.
But it’s just because they’ve talked to so many shit kickers in the past that they know that just be honest about stuff, know where it’s at, set people’s expectations properly and that’s gonna eliminate a lot of the people that are just wasting their time.
So they are also the ones that speak directly that don’t budge on price and if you’re an emotional person that’s got an ego tied to negotiating because you think you’re good at it, they will smash you every single day of the week and you will end up bending over so far backwards that you feel like you’ve been through a bad time. That’s a nice way of saying what I’m thinking.
But if you had a listen to the first thing that they said which is when you say, “How much do you think it’s roughly worth,” and they say, “515k” and then you start at 450 and end up at 515k, if you just had known who you were speaking with before you spoke, your problem would have been solved, you know what I mean? If you see value at 515.
Ryan: Are you saying that those people aren’t really worth negotiating with? Or just not worth low balling?
Ben: Not worth low balling. Like definitely worth talking with because the good thing about a great agent is they’re selling the property at or a tiny, tiny bit below market value generally because they know that it’s not worth listing a property so far above market value. It’s just gonna chew up their time and their energy.
So like a good agent will have also set the clients’ expectations very much upfront. They person they’re selling for and say, “This is what it’s worth, if you wanna sell it with me, this is what I’m gonna sell it for.” And then they’ll go and tell the market that as well. But the market, sometimes think … they’re playing a game with these people and they’re not, that person’s almost always gonna win.
Ryan: Yeah. Well that comes back to who you are negotiating with and being smart about it, like building rapport, making their life easy and you gotta adjust that for each individual person that you’re talking to.
Ben: So an agent that sells 20 properties a year would probably on average get between five and 10 offers on a property. So you’re talking about … let’s just say it’s five times 20, that’s 100 people a year that they’re directly in writing negotiating with. If you’re only buying one property every three years and you pretend that you can come up against someone that buys … you know, that talks to 300 people a year about it, plus all of the other time wasters, you know, you’ve gotta look at where people’s skillsets lie.
Ryan: Yeah, and sometimes your skillset isn’t gonna be negotiating better than them.
Ben: No, not unless the agent is average which we’ve talked about before.
Ryan: Yeah, exactly. Well, let’s leave it there because we’re coming up to about half an hour. And I think that’s given enough for people to chew on when it comes to talking to agents. I think we’ve given them some great tips and I think now it’s just up to you guys who are listening to this or watching this to go out there and to build that rapport.
Try and get the viewing by yourself, do these things that we’ve talked about. Become a serious buyer but don’t give too much away. And we wish you the absolute best in buying your property and in talking to these real estate agents.
Because at the end of the day, as we’ve already said, they are people and you know, you can have good conversations with these people, you’re not necessarily gonna be best friends but you can have a good time in that buying process and it can be as painless as possible.
Ben: If you can make the process of buying property fun, it’ll definitely add years to your life because if the opposite of that is what most people experience, it can be really painful sometimes as well.
Ryan: Yeah, you wanna go into it and come out with just as few gray hairs as you started. [inaudible 00:26:55] so stressed that it just ruins your life. Yeah, we’re gonna end it there but we’ll wish you the best of luck and until next time, stay positive.