Buying property – The incompetent agent

Once again, the poor ability of the real estate agent strikes again. As I posted in Buying property – Lazy agents, I have been in the process of buying an investment property through a less then impressive realtor.

Not only had he posted out of date photos that reflected the property in a poor light but he accepted, without negotiation, an offer that I consider was a fair bit under market value. His actions so far have not been to the benefit of the vendor.

Settlement date was due in a few days, when I received a call from my solicitor advising that the vendor was requesting an extension. The reason being that the owner was still looking for a property to rent. As I had been informed that the property was occupied by a renter and the owner was an investor, I saw no reason why the owner needed an extension for that reason. From my experience, it is usually the buyer that is seeking an extension to finalise finances.

So, I asked the solicitor ‘What does the owner looking for a new rental have anything to do with me?’. To which she replied ‘She is still living in the property (the one I sought to buy)’. I reviewed the contract and yes, the owner address was listed as the property address.

I called the agent to enquire and he apologetically confirmed that he thought the resident was a tenant and not the owner. The owner was still living at the property.

Ok, my bad also for not noticing on the contract but the agent had confirmed more than once that the ‘tenant’ was living in the property.

I ended up agreeing to the extension and the property settled a week later than initial contract date. An inconvenience to me only but did result in postponing potential open home viewings for prospective tenants.

It is interesting to note that the realtor had advised me that he had been in the business for 25 years. I would normally expect that an agent of 25 years would have better negotiation skills, have a sound understanding of his stock in hand and probably doing better than selling very low-level property.

Needless to say, if I do need to sell the property I will be looking elsewhere. If I need to buy again, however, he will be my go to man!

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Sacrificing now for the long-term goal

My life at the moment:

  • Sleep
  • Work. Pick up overtime and extra shifts if possible
  • Eat
  • Shower/brush teeth
  • Train at gym
  • Feed cat (x several)
  • Shop for food. Buy sale options if possible
  • Renovate home to add value
  • Listen to podcasts
    • Property investing
    • Entrepreneurs
    • True crime
  • Review potential investment properties online
  • Watch TV
  • Blog
  • General home chores

What I’m not doing:

  • Socialising. I’m in a new city and haven’t made an effort to make friends outside of work to reduce obligation to socialise (I know, a bit sad)
  • Buying new clothes, except as a necessity. Work uniform supplied and live in t-shirts and tracksuit pants the rest of time
  • Drinking alcohol excessively (a couple of beers weekly now only)
  • Eating out. Very occasional pizza ordered with savings coupon
  • Spending money on entertainment. i.e. cinema

Sound boring? Yeah, it kind of is but I’m suffering for my goal at the moment. My main thought at the moment is money, with the goal of not having to worry about money in 5 years. My goal is so strong that my boring life doesn’t feel boring. I have a purpose and I feel motivated daily.

My lifestyle up to now has been less than financially effective. Though I have managed to accrue a little money through property capital gain, I really haven’t saved a considerable amount and definitely not enough to retire.

5 years is a fair time to go without but I’m putting it in perspective. If the next 5 years of sacrifice allows me to relax in retirement, the time is well worth it.

Buying property – Lazy agents

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!