How to buy and negotiate like a professional and bag a bargain - Part 2
Smart investors know that when purchasing property, buying the right property hardly ever means buying the absolute cheapest property.
Researching the market and networking are crucial when looking to bag a bargain. It’s also equally important to be in the know in regards to silent sales, have a strategy when at auctions.
Act with timeliness if you want a successful portfolio that will build wealth. Smart investors must know when to watch out for market opportunities that will help them bag a bargain.
Silent Sales A silent sale is a property that is sold before being advertised to the public. This is beneficial for buyers as there is no competition and you may be able to get the property for a cheaper price. Here’s how:
- Professional buyers’ agents often buy properties as silent sales. They can do this as they have built up a relationship with local agents and know when a property is coming up for sale.
- The public can increase their chances of purchasing silent sale properties by building up a relationship with agents.
- This takes time and money, so the alternative is to invest in a buyers’ agent who has pre-existing connections and knowledge.
Auctions can be a great way to nab a bargain. Here’s how:
- Most people end up paying too much at auction, as auctioneers create an emotional atmosphere of scarcity and competition which can drive prices beyond what people would normally pay.
- I often stay silent until the competition is exhausted and then come in with a knockout bid, for instance a $5000 or $10,000 bid when everyone else is bidding in $1000 increments. This upsets the rhythm and stops many from bidding against me.
- In a strong market, you can use my strategy to wipe out the competition with a strong first bid. This creates disappointment and stops emotional bidding. Good properties hardly ever sell for half price so there’s not much risk of coming in too high too early.
Time is of the essence – you can often get a better price by just having a signed contract a few hours before someone else. Giving an agent a signed unconditional contract with a 10 per cent deposit is a guaranteed deal and agents love knowing the deal will go through.
The key to beating others to a deal is to recognise opportunities, having the property pre-inspected (valuer, builder, strata and pest) and making a quick decision. If you concentrate on issues that are worth a few thousand dollars, you could miss out on a deal that would make tens of thousand dollars in the long term.
Buying the right property doesn’t always mean buying the cheapest
When it comes to bagging that bargain, ensuring you purchase the right property will enable you to build long term capital gain and eventuate in a successful and diverse property portfolio. To buy and negotiate like a professional, your strategy doesn't have to be complicated - it's often the simple things that work to amplify your property goals and achieve great financial success in the long term.
About Chris Gray: Chris Gray began investing in property at age 22 when he worked out that it was cheaper to own a three bedroom house than a one-bedroom unit. He turned an initial deposit of $35,000 into a portfolio that is today valued at over $10 million.
A qualified accountant, buyers’ agent and mortgage broker, Chris is passionate about inspiring others to achieve financial freedom through property. He is the CEO of Empire which builds property portfolios for other people – searching, negotiating and renovating on their behalf. Chris is the host of “Your Money Your Call” (Fridays on Sky News Business Channel), a position that sees him interview other leading industry figures. Further information is available. Further information is available at www.chrisgray.com.au and www.yourempire.com.au.