Negotiation expert Scott Aggett urges potential property buyers to gain market knowledge and understand negotiation strategies when dealing with real estate agents.
Scott Aggett boasts over twenty years of real estate experience, with insights into all aspects of property transactions including from a vendor, purchaser, agent or investor perspective.
Now he brings all these experiences together as a professional property negotiator, and his team at Hello Haus are the first dedicated property negotiators working directly with property buyers to secure the best purchase price possible.
Scott joined KnowHow founder Bushy Martin on the Get Invested podcast to help listeners improve their negotiations skills and secure a fair price, especially in the current climate where property prices are soaring.
Invest in property market knowledge
“I think lack of education is the biggest thing in terms of market knowledge. So the number one thing I say to buyers when they first start out is you need to have an absolute knowledge of market depth in terms of the buyers that you’re competing against, and supply and demand metrics,” Scott explained.
“You’ve got to understand how long it’s going to take to replicate that asset if you miss it, because that’s going to determine how hard you need to go at the offer. So you’ve got to be watching every live auction you can in a marketplace if they exist with the type of asset you buy. That will give you an understanding of what people are paying in real time and it’ll also give you a true understanding of what the market depth is in terms of buyer competition.
“You’ve also physically got to do the hard work to boots on ground and get through open for inspections for, I think, a period of four to eight weeks, where you look at every asset you can that matches the criteria of what you’re looking for. And when you do that, then no one can pull the wool over your eyes because you really understand and you know what the market value is for that type of product.”
Scott also added that physically visiting the property will ensure you’re seeing it exactly for what it is and not the vision created online.
“So if you’re searching online and you’re looking back at recent sales or even current listings, you’re only seeing the absolute best of a property, not the weak points of a property. So that’s another way a real estate agent is going to pull the wool over a lot of buyers that aren’t doing their own market research,” he said.
Watch out for conversational tactics used by real estate agents
As a buyer, the best way to place yourself in a more empowered position is to be wary of a real estate agent’s questions, no matter if it appears to be ‘general chit chat’ on the surface.
“In terms of the loaded scripts and the dialogues, I think buyers need to know that the agent is employed by the seller to get you to pay an emotional premium. That is their sole focus. At the end of the day, a good agent is there to extract the highest amount of money they can from you in every single transaction,” Scott said.
“So the way they might do that is forever asking questions. For example, I would gently drop into a conversation questions like, ‘how’s this compared to what else you’ve seen in the marketplace?’ ‘What property does this compare closest to that you may have just seen or liked or bid at?’ And then I’m recording all that information. It might just sound like general conversation, but what I’m trying to establish is where this sits in your pecking order .. .and that would give me a really good gauge as to how hard I push in a negotiation.”
Take note of real estate agents’ language
Scott said there are giveaway signs in an agent’s language to know when they are bluffing.
“This is why people have got to outsource this to someone that’s an expert in doing this. Because if I speak to you and you give me the same sales dialogue that every other agent’s going to give me, then I know when you’re going to throw a certain line at me and why you threw it,” he said.
“I’ve done over 3000 property deals and what you find is 99% of the agents are all trained the same way. They say the same thing at the same time. And that shows me straight away that they don’t have a buyer, or they do have a buyer, and it’s just very subtle differences in the way they deliver that message. So it’s really crucial that you understand that and can spot those things.”
Make your offer more than money
Scott emphasised that negotiating isn’t only about the price. In fact, there are many other approaches beyond price to secure a property – you just need to understand what the seller wants.
“It’s really honed in on that problem solving, right? I’ll give you the latest example. I bought a house yesterday in Avalon in Sydney for clients. The vendors wanted 12 weeks, we want six weeks settlement. So we had to show some flexibility around that. But because I asked the question, ‘what are the ideal terms to your client?’ I got the answer back of what it was, and that positioned me differently to what the other buyer was doing, which was just hammering down the door that they wanted a set timeframe that didn’t work for the seller,” Scott revealed.
“So if you ask those questions, then you can relay that back in the form of your offer. That way you can get rid of as many speed humps as possible to make sure your offer is as clean as it can be and as attractive as the seller wants. And that will fast track that process.
“So I think problem solving like that is the key thing for me. If you can come up with solutions around settlement times, deposit release … rent back options is another one in this market that’s been interesting because there’s obviously been a shift to lifestyle driven purchasing decisions. So people are selling in capital cities and they’re going to regional areas, and those people often need more time. There really is so many – there’s inclusions with fixtures and finishes, furniture and more.”
Listen to the full interview here.
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