This is the fun part right?
This is a great topic to talk about because this is the fun part right? Making an offer through an estate agent and being more likely to get those offers accepted because that’s what we all want right? If we’re investing in a property whether we’re looking to keep it and rent it out; we want to make sure we get loads of those offers accepted and we’re only going to do that if we’re working through estate agents or making offers through estate agents.
We can only increase our chances of getting those offers accepted if we follow a few simple rules. So I want to share that with you because look I’ve been an agent for 21 years now and I’ve owned my own agencies now for 10 years. I’ve got a sales and estate agent, 2 letting agents.
So I’ve done all of the selling and the negotiating and I’ve trained teams to sell and negotiate. I’ve trained property investors to make offers and I’m also a property investor myself and a property sourcer and a deal packager. So I’ve done this from all angles so to speak.
I’m going to start with the most important tip, the one that’s going to make you most likely to get that offer accepted and more likely to get more deals from that estate agent too. But first we need to remember a fundamental rule here that the estate agent doesn’t work for you; Mr. and Mrs. Buyer. Now, I know that sounds harsh and a lot of people do expect a lot from an estate agent, even though they’re not paying them any money because the buyer doesn’t pay the estate agent normally, right? It’s the seller that pays the estate agent.
Technically the estate agents loyalty and dedication needs to be for the seller. That’s the way it should be done. And of course the agent wants to get the highest price possible for the seller but you as the buyer, you want to get it at a price that’s going to make you profit.
I’m going to start with the most important tip as I’ve said and we’re assuming now that you found a property through an estate agent. You’ve done your calculations and you’ve calculated your true investment and your true yield and if you need some help with calculating that on my podcast the Anonymous Landlord I did an episode about true yields, true investment and all the calculations that you need to follow or just give me a shout I’ll help you out with that.
So we found a property and we’ve got to start with the most important tip if you’re about to make an offer to the estate agent.
Number one is to start by sharing your calculation with the estate agent. And I’d been really keen to hear from any other agents that are watching this right? If an investor comes to you and they make you an offer. Of course, they’re going to want the property for as lower prices as they can get it. Wouldn’t it help you Mr. and Mrs. estate agent if you could see how the investor has calculated their offer? But as the investor you need to calculate the refurbishment cost and how you’ve calculated it. Your stamp duty, your legal costs, and all of those sorts of things. Then give the estate agent how you’ve calculated your gross development value your GVD, or the job done value. Once you’ve refurbished a place and added some value, how much have you calculated that property is going to be worth and here’s a little side tip: Ask the agent for their opinion and respect their opinion. But also share with the agent the profit margin that you intend to make. I know that sounds crazy and there’s so many property investor trainers that are probably saying right now: “No, No, No. Don’t tell them how much profit you’re making.” Yeah, tell them the profit. You’re an investor, you are entitled to make profit. So share that with the agent and I’ll tell you why.
And by the way, share the yield that you’re targeting if you’re going to rent this property out then share the yield that you’re targeting with the agent. So we’re going to share all the calculations with the agent the purchase costs, the refurbishment costs, and how you’ve calculated it, what needs doing, and how much you need to spend, your gross development valuation for the end of that, and also the profit margin you’re making. Why? Because it gives the agents some evidence to go to the seller with and present and say: “Hey, I’ve got an offer for you. Great news! Mr. and Mrs. Seller I’ve got an offer for you. It’s from a really good buyer who knows their stuff and they’re reliable they’re going to move quickly and this is how they calculated their offer. They’ve calculated that you need to spend £15,000 on this property, and they’re going to have to spend £5000 on stamp duty, and they’re going to have to spend £2,000 on legal costs etc. And their offer is very fair. They’re an investor so they need to make a profit and this is how much they’ve offered to you. Mr. and Mrs. Seller.” Think of that from the agent point of view. Much easier to do.
And that is actually tip number two: Think of all of this from the agent side. If you put yourself in their shoes, they’ve got to go to the seller with an offer. Now weirdly enough I don’t understand this but sometimes sellers blame the estate agent for low offers or they criticized the estate agent for low offers. It’s really weird. It’s very weird industry. And actually if there any agents watching by the way, if I got any agents with me now or is anyone made any offers through agents, just give me a yes in the comments below if you have.
I think about it from the agents point of view. So if they’re going to go to the seller and present an offer but with nothing more than the offer. Then they’ve got their work cut out for them no evidence, no information, no workings. What do you think is the owners likely response if someone just comes in and said: “Right, the property is on the market for £100,000 and this investor offers £75,000.” What do you think they’re going to say? Seller probably going to say: “No.” Probably.
Now there’s no one rule for everything right? You’re not going to do one little tip here and that’s going to make all of your offers accepted but what we’ve gonna do is increase our chances, right? That’s what all of this about. You do all of these things and all the training and advice I gave you, do all of them. You’re going to increase your chances of success. So give the estate agent your workings. Of course think about all of this from their side, give them the evidence to work with but also it gives the seller something more to think about.
Now, you might give them all that evidence of how you calculated this offer and they might not say yes now but let’s say that seller is on the market for three months and people keep giving them the same offer or the similar offers and then they’ve got something to think about with you. They know now that there’s this amount of work that needs doing, this amount of cost that needs doing, and investors going to buy the property and want to make this amount of profit, it just plants that seed and then a bit later down the line if the property hasn’t sold, they’re more likely to come back to you. But also the agent is more likely to come back to you as well because you’re the one that’s been open and transparent with them.
Now the next tip number three is quite an obvious one, but I want to explain it. Don’t be greedy, be fair, and be profitable. Now there is a way that you can do all of that. I know but let me tell you this. First of all you are entitled to make profit.
I should have that as like my tagline or something like that. Now yes, I want you to remember that you are entitled to make profit. But remember that the agent will not work with greedy buyers or they won’t want to work with greedy buyers and that’s a fair point, right? You won’t wanna work with idiots. Would you in your job or your life? You don’t want to deal with greedy, selfish, arrogant, ignorant people. And agents are just human beings to believe it or not I know it’s mental isn’t it? Some people think the agents are some sort of crazy alien monsters, but they’re not, they’re real people. So we treat them as such. Now they won’t wanna work with greedy people.
So don’t be greedy because they’re just won’t work with you if you are and there is a big difference between making a profit which, remember you’re entitled to do and you should always try and do. But there’s a big difference between making a profit and try to rip someone off and try to be too greedy. So when you set your offer, set your targets.
Remember, set your yield, set your target return on investment ROI, set that at the beginning. Don’t deviate from it; that is your target. You will not change and if you don’t change you’ll make profit, but stick to it.
Tip number 4 and remember this is my little phrase you’ve heard me say it many times before but it’s just a pile of bricks. There’s another pile of bricks down the road.
So don’t get hung up on this one property. Don’t lose sight of your return on investment or your yield targets. Certainly. Don’t try and drag out an offer negotiation until you get to the point where you’ve wasted so much time that you just cost yourself a load of money. Imagine if you’re being paid 50 pounds an hour in your normal job, but you’ve wasted two or three hours on this offer. Let it go, if you’re not going to get it for the price that you want it, let it go. Move on to the next. It’s just a pile of bricks. There’s another pile of bricks down the road.
Tip number 5, again slightly obvious, but let me explain. Be available and be willing for the agent right? And this goes all the way back to the initial interactions that you have with an estate agent. Make sure that you’re always answer your phone, always because think about it, right? If I said to you I’m going to give you £25,000. Every time I ring you, you are answering your phone, right? That’s a given so the estate agents are no different. They’ve got that vehicle which is going to provide you with profit. So therefore if they call you, you answer, please answer, answer to emails even if you send them an email back saying: “Hey, thanks for the email. I’ll give you a shout this afternoon.” Or “Thanks for the email. I’ll be able to get back to you at this time.” Be available, be willing and it’s also this applies, actually going off-topic slightly.
This applies back to when you’re first starting to view properties too. Because think about it, if you’re the person that’s always available to go to view properties, always available to give feedback, always available to jump just like that. And if the agent said: “Hey, I’ve got this property coming on. Can you get out and see it today or within the hour?” And you say: “Yes.” And you keep saying yes, and you go and do more and more viewings the agents just going to want to work with you more, and more, and more. I promise you.
Tip number 6 is: Do not argue with estate agents. Do not argue with estate agents. That’s one of the biggest things you could possibly get wrong is arguing with estate agents. Now look everyone for some reason has this terrible conception of estate agents, but let me promise you that actually 99% of estate agents are very good, very decent people and businesses. They just want to sell houses, they just want to get their job done, get the money in the bank and move on. That’s what they want to do. But unfortunately, there are the 1% of estate agents that are absolute idiots and they spoil it for the rest of us and they don’t even know who they are. They think they’re just getting on with life, but they’ll get caught out soon enough. So don’t argue with them and I want you to think about this slightly deeper, if you argue with an estate agents valuation with their estimates with their forecast if you argue with them, and they’re less likely to want to come to you with more stuff, right? Then less likely to want to work with you because the mindset of anybody whether you’re in a state agent, or a taxi driver, or a binman, or whatever.
The mindset is I don’t want to talk to that person. They just constantly argue with me, make me feel rubbish so I don’t want to work with them. And that’s the same for an estate agent. Remember they’re just people, they’re just people. So if you argue with valuations, and estimates, and forecasts, and opinions, things like that. Then you’re less likely to get deals done, you’re less likely to get offers accepted, and you’re less likely to get them calling you with more deals. But there’s slightly more to it than that as well.
Now, you might well have a different opinion to the estate agent. You might disagree with their valuation. That’s fine. It doesn’t matter because you’ve got your valuation and they’ve got theirs but you are the one making the offer so you don’t need to argue.
If that estate agent says once you’ve done the job there. That probably is going to be worth £200,000 and you know, it’s worth a £160,000. Okay, thank you very much for your opinion. Mr. and Mrs. Estate agent. Great. My offer is this. Because their valuation doesn’t change your offer right? Because you’ve done your due diligence. And check out my podcast on due diligence. So you can agree with the estate agent and share your thoughts openly right? And that’s good for the estate agent. Make them feel welcome or wanted and then negotiate, agree with the agent and then negotiate, make them part of your goal, make them on your side. They want to work with you because hey this guy agrees with me. This guy gets me.
Tip number 7: Remember the agent doesn’t work for you. Mr. and Mrs. Buyer, so they will want to get the top price for their customer. Think about it. If all sellers well for yeah, actually, it’s true, isn’t it? The seller is the client right? So if all sellers write great reviews about their agent saying: “They got me top price. They got me a great price really happy with my agent.” Then awesome right? More sellers are going to want to come to that agent. But if loads of buyers write loads of review say: “This agent knocked £20,000 off the purchase price for me. This agent haggled the crap out of that seller to get them beating down as low as possible for me to buy that property cheap.” Then they’re less likely. Make sense right? Of course it does.
So the agent wants to get their reviews, and their feedback, and their pay from the seller. They wanna get more sellers. So they’ve got to do the right job for them.
Tip number 8: Be open from the start, be trustworthy and honest. I think that’s the best way to be. Because if you don’t lie, you can never get found out. If you don’t lie. You can never get found out. I mean that’s an obvious one. I don’t need to explain that anymore right? Be open and honest from the start. You’re an investor, you’re here to make profit.
These are the property deals that you’re looking for and I’ll make you an offer. I promise I’ll make you an offer, I’ll be open and honest with you and I’ll share my workings and blah blah blah. But be open and honest from the start. Please promise me, you’ll do that. By the way, all this is coming from my 20-odd years of experience in property from an estate agents perspective and I’ve trained teams, I’ve been the sales negotiator, I‘ve been viewings guy runs around selling houses, I’ve owned an estate agent, I’ve trained teams, I’ve trained property investors to make offers, calculate offers, and find deals. So I know all about this from all angles.
Tip number 9: Be ready with your proof of funds. Be ready at the moment there’s a big buzz around agents collecting proof of funds from buyers before they go and view a property. That’s good because it means that the agent only works with good buyers. I have that stuff ready. Have proof of funds ready, have solicitors information ready, the solicitor you’re going to use have that ready. You don’t need to pay any money to a solicitor just to know which solicitor you’re going to use. Here’s a quick side tip: Always allow a conversation to happen between you and the estate agents solicitor. Tell them I would be open to a conversation with your solicitor. You will be more likely to get favour and help and support from the agent if you are going to work with their solicitor or you at least give their solicitor and opportunity to present their services to you.
Be ready with your identification. Normally people need a verified proof of ID and a proof of address. And also if you’re going to buy the mortgage get a decision in principle, you don’t have to have a specific figure as such. Go to your mortgage advisor or give me a shout. You can work with my mortgage advisor if you need to but go to your mortgage advisor and say: “I need a decision in principle. I’m going to view this property is £200,000 and this is the address right?” He’ll give you that and then you’ll have a decision in principle.
Tip number 10 and the last tip I’m going to give you is: Remember that the agent owes you nothing. And let that sink in for a second. The agent owes you nothing. You don’t pay the agent, you are not the customer, you are almost nothing. But you can make yourself something if you follow these tips.
And remember this you just one thing right? This is just one aspect. And if you want to be the best version of yourself at one thing, then you need to be the best version of yourself at everything.