As the Sydney property market continues to be suspended in the “massive area between boom and bust”, property investors and real estate agents alike must strive to maintain good relationships with one another to keep the portfolios growing and the businesses afloat.
While there is an amazing amount of information available online right now, Starr Partners’ Doug Driscoll believes that nothing beats local ground knowledge, which only good agents can provide, regardless of the state of the market.
At the moment, the Sydney property market has landed in the sweet spot between being a buyers’ market and a sellers’ market. In contrast with the dynamics between agents and buyers years ago, nowadays, some agents also find themselves phoning in potential buyers to convince them to purchase properties.
Doug said: “That's a good market. That's actually a healthy market, you know … The market we just moved out of was probably unhealthy [because] it was going up too quickly, too aggressively.”
Whichever way the market is moving, the expertise of local agents is instrumental to the success of a property investor.
“Those relationships are absolutely essential … They are imperative because, at the end of the day, the agent does wield influence and power in terms of process,” the property professional reiterated.
Being able to build a good relationship with real estate agents is one of the simplest but most important strategies to employ when in the business of creating wealth through property. You need to make yourself known as a property investor with a good reputation so you end up at the top of their lists—getting phone calls about good investment properties even before they come on to the market.
Doug, together with Smart Property Investment’s Phil Tarrant, shares some of the tips on how to become the best client for real estate agents:
Don’t be afraid to stick to your offer when buying properties, said Phil, who is an avid investor himself.
According to him: “[Say], ‘This is my offer, this is what I am willing to pay, take it or leave it' "
“If [the agent] takes it … [and] the price is right for the vendor, the price is right for you, deal done. That's beautiful real estate, right?” he added.
At the end of the day, for real estate agents who are taking in clients, action speaks louder than words.
The property professional explained: “If you've bought one or two and they know that, you're going to be their best buddy, [but] if you've spent two years looking and gone to all their opens and phoned them and wasted their time—at least that's how they would perceive it—then ... it's going be a bit more difficult."
This is one of the most important pieces of advice Doug can give to both property investors and real estate agents in negotiation. By putting all agreements in writing, all parties involved can avoid the “he said, she said” arguments, which will do nothing but waste everyone’s time and energy.
Doug said: “Rather than, ‘Oh, you didn't say that', 'Yes, I did', 'No, you didn't' … it's in black and white."
“[Instead of] just making a phone call or leaving a message, actually send them an email.
“That way, if in the event that it sells to someone else and you weren't even given a look [at] … you [would] know there's something wrong there,” he added.
When agents are constantly reaching out regarding a certain property, essentially “overcommunicating”, property investors often see it as an advantage—a chance to start negotiating for lower prices. However, you still have to be careful not to end up lowballing or offering an unrealistically low estimate for a certain property.
According to Doug: “Clear and precise vocabulary is needed, not just from the agent but the investor themselves.”
“If you are lowballing someone, you've got to make it clear to them that in the event that that's not enough, [you still] want the opportunity to potentially [increase your offer].
“By doing that, you're sharing that you've got more in the tank—it's a very difficult balancing act … [but] that's the fun of it, really.” the property professional explained further.
Regardless of the current state of the property market, the local ground knowledge of real estate agents will always add value to a property investor’s journey. Whether they’re helping you find your next investment or just offering you an advice, their wisdom will always come in handy for ultimately achieving your financial goals.
Phil said: “I've done it beforehand, where I would … buy an agent a coffee and say, 'Hey, mate. You got ten minutes? I'll take you for a coffee.' and just pick their brains.”
“If I can spend ten minutes extracting someone's years of experience in a market versus sitting on a computer looking at data, I'd much prefer to do the former rather than the latter,” he added.
Doug’s advice to budding property investors: “Get out there, get talking to agents, build those relationships—that's where the magic will happen.”
Tune in to Doug Driscoll’s episode on The Smart Property Investment Show to know more about his thoughts about the property bubble and whether or not it will burst in the near future, as well as how he feels about the balance and stability of the Sydney market and his views for 2018.