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How to source discounted property through estate agents

Written by Posted On Monday, 25 February 2019 04:00
How to source discounted property through estate agents

If property investment is your business, or even your hobby, you will have noticed that getting the right property deals at the right price to make a profit is becoming more and more difficult. Among the most popular channels for sourcing discounted property to buy in a competitive market are buying direct from vendors, via auction houses or through estate agents.

Interestingly, many investors believe that estate agents are the least able to provide good value. But with over 90% of prospective vendors turning to agents as their first port of call, it would be unwise to underestimate the power of a good estate agent in enabling a cracking property deal.

Clearly, no reputable agent is going to advertise their best deals as being sold by a ‘desperate vendor prepared to take a cheeky offer’. But spend some time building positive relationships with a few key local agents and great commercial opportunities may well come your way. As North London estate agent Peter Barry explains: “We are always interested in speaking to motivated buyers and working with them to achieve their property investment goals. It pays to take the time to get to know each other, so that when a suitable property becomes available, they’ll be the first to know.”

Finding bargain properties can seem like a full-time occupation. The successful property investor will use his determination and perseverance to understand the local market and the distribution of property prices there. Most flats and houses are marketed at the average price, a few are premium properties and around 3% will be offered at less than market value – and this last section is where gold can be found.

Estate agents should be one of your most important allies in helping you get the right property. But how do you get the best (deals) out of the relationship? Here are some key pointers to consider:

 

Building relationships and communication successfully

• Treat estate agents as the professionals that they are. Don’t waste their time or patronise them – you need them onside. Appreciate their expert knowledge of the market and understand their business objectives are as much as your own.
• Present yourself as a professional investor. Make appointments rather than walking in off the street. Don’t view properties that are outside your scope. Cement your own credibility by having proof of funds and solicitor details ready, and keep communications regular.
• Be upfront about the sort of deals you are looking for and why. That way, the agent can put himself in your shoes and think like an investor, not a seller. If you can work together as equals towards a common goal, everyone wins.
• Have a clear system for your weekly calls with key agents. “Have you got something with margin?” is the key question to ask. Their first suggestion may not be the right deal but keep picking their brains and evaluate each deal on the spot. If it looks promising, book a viewing.
• Be forensic in your analysis of potential properties so as not to waste anyone’s valuable time. Desk and telephone research are crucial to discard properties that don’t fit your criteria. The ideal scenario is to find a discounted property that is about to go on the market.

 

What to look for in property viewings

  • • Before a viewing, find out about similar properties sold recently in the area, and bring along your ‘kit’ – property details, camera, torch, ladder, damp monitor etc. Upload the new information straightaway so you can make an ‘offer’ decision quickly.
    • During the viewing, establish a rapport with the agent about your property investment plans and your desire and ability to proceed without delay. Ask for the lowest range of the buyer would be prepared to accept as a basis for a quick offer.
    • After each viewing, update your records with the property’s condition, location details and works needed while everything is still fresh in your mind. Work out your offer, if any, and keep the data for 90 days.

Making an offer that stands out

  • • Establish your credibility as a serious buyer by acting quickly, confidently and professionally. If at all possible, make an offer on the same or next day. Submit your offer by phone, follow up with an email (and postal letter) containing proof of funds and details of your legal team.
    • Talk the agent through the maths to explain how you arrived at the offer price, so they can see your logic and understand your financial parameters. Even if your offer is rejected, it will leave a positive impression that will help with future interactions.
    • Over time, your consistent behaviour as a professional property investor who can deliver will elevate you to the status of preferred buyer. By going the extra mile with the agent, you will ultimately reap the rewards of being top of the list of people to be called for the next hot deal!
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