As I posted a few weeks ago with Buying property – Thank you messy tenants! I have been on the look-out for an investment property.
After some research, I decided on an area that provides a generous rental income and has plenty of room for capital growth. It was then down to finding a suitable property.
In this day and age, particularly at the lower cost end, the primary avenue for locating property is on the internet. After entering the parameters I required, I generated about half a dozen quite promising properties and set about making a time to see them.
What I found interesting was that some real estate agents today are so lazy in advertising the properties. Their written profile of the property can be down right pathetic. They make very little effort to sell the benefits of the property and location. The basics are not enough, the agent should be selling the dream of owning the property, whether it be for investment or to live in.
Property photos can also be appalling. Only 18 months ago, I was in a position of locating an agent to sell my home in Sydney. One agent had a high-profile in the area and she impressed me with her pitch but the photos she used were obviously taken from her mobile phone. I enlisted her services on the proviso that a professional photographer was used. I had to pay the $500 for the photos and it was very well spent. The traffic through the first open home was fantastic, which created urgency and resulted in a very impressive offer the same day.
From a purchasing point of view, I use agents poor ads as an opportunity for me to save money. An unattractive ad in terms of wording and photos can result in less buyers to opens and therefore more chance for me to negotiate down.
The day came to view some properties. Two identical properties were open and hour apart in the same complex. One agent had listed very nice pictures and had sold the property strongly in the word content. The other property had dark grainy pictures that made the place looked very tired and the wording in the ad was generic. You can imagine that I was more interested in seeing the property with the nice pictures and descriptive wording.
Well, I was disappointed. The first property was quite run down and needed some cosmetic work. In saying that, I still thought it represented pretty good value if I could negotiate it down around $10K. The point is though that I did attend the property and I may have had the property had a less appealing ad.
An hour later, I attended the second property with less enthusiasm. It was great! The existing tenant was obviously very house proud and the presentation was perfect. She even had subtle incense burning that provided a pleasant fragrance to the home.
Other than possibly adding some paint, there was basically nothing to do. Another interesting aspect was that the agent had not even used current photos. New blinds had been installed in several rooms to replace some very dated curtains. A small thing perhaps but an ad is a first impression and should feature the benefits of the property in its best light.
When it came to price, the agent suggested a price that was in the range of $20K less than equivalent (but less impressive) property that I had seen an hour early. I countered with a number expecting some effort to negotiate. I was called back less than an hour later to advise that the offer had been accepted. Not the slightest effort to press me for even a few thousand. The thing is, I was more than prepared to offer more!
From my perspective as a buyer, the agent was great. He posted poor ads with uninspired wording and out-of-date photos and he failed to negotiate. If I was the vendor though, I would feel that I lost out on money and was paying a commission for nothing. They should actually be paying the tenant as they had really presented the property to sell.
Once the property sale settles, the agent will obtain his commission from the vendor. I might even use him again if I am looking for somewhere to buy in the area. But would I use him to sell for me? No chance!