Property Hub - Investment Insights & Inspiration - Realty Talk: Negotiation Insights

Episode Date: January 20, 2024

If you only negotiate very occasionally, then chances are you may not be as good as you think you are, especially when you're up against a professional who negotiates for a living.  Like a selling agent when you are  trying to buy your next property. This week in our 4 part series with Scott Aggett from Hello Haus, he shares his expert skills honed over thousands of property deals. NEW – join our Facebook group, The Property Hub Collective: https://www.facebook.com/groups/1857513011165686 Join the Property Hub community on Substack! Sign up to get Australian property news, opinion, and episodes in your inbox: https://propertyhubau.substack.com/ Subscribe to RealtyTalk on the Property Hub channel: Apple Podcasts | Spotify | Google Podcasts | Email Property Hub is a collaboration between Bushy Martin from KnowHow Property, Kevin Turner from Realty, Andrew Montesi from Apiro Marketing and Apiro Media, and Australia’s largest independent podcast network DM Media. Business and partnership enquiries: [e-mail] omnystudio.com/listener for privacy information.

Hello and welcome to this week's Realty Talk Show. This week we present the third week of Scott Agate's four-part series helping you get buyer ready. And this time Scott and Bushy discuss the art of, or should I say the skill, of negotiation. You see, negotiation is where a lot of buyers struggle because they come up against skilled seller agent as negotiators. Hey, if this is your first time with us, welcome. You're going to find us on all podcast players and through the Southern Cross stereo network. If you like the show, make sure you hit the subscribe button. Help us to continue to bring you the best guests every week.

Join the conversation to any time on Facebook. You can do that by searching for the Property Hub Collective. We'll be back in just a moment as Bushy kicks off this week's show. Property deductions can save you thousands of dollars each year. To make sure you maximise deductions, you need to work with the most experienced quantity surveyor in the country. BMT Tax Depreciation is the leading specialist in the industry. They've completed over 700,000 tax deduction schedules

for residential investment and commercial properties Australia-wide. BMT guarantee to find double your fee in the first full financial year deductions. Call BMT on 1300 728 726 today for an obligation free quote. Realty Talk and your host, Bushy Martin. How good are you at negotiating? If you only do it very occasionally, then chances are you may not be as good as you think you are, especially when you're up against a professional that's doing it every day of the week, like a selling agent when you're trying to buy your next property.

because your skill in this critical area can make or break your property outcome. In our last Buy Ready session, number two, we covered the art of how to analyze property. And this week, we focus on the heart of negotiation with expert negotiator, Scott Agate from Hello House, who's generously sharing his expert skills honed over thousands of property deals, which means he and his team speak agent language and know how to handle agent games so you don't have to so welcome back scott hey bushy this is going to be a good one i'm excited me too i i love this subject mate and having spoken to you many times before i know how good you are in the whole negotiation process so to kick that off and to sort of set the scene

scott um what mistakes do buyers make when negotiating on a property but i think um they're unprepared they're unprepared to be the biggest one i think we've covered off in a couple of sessions already in this series about getting to the table with finance approval, being in a position to actually act. So I think that's a really big one. Second one is being uneducated about the buying process. So they're really not sure what's going to happen in what order and at what speed, because I think that's when an agent knows that they've got a deer in the headlights and they can turn the screw if they have to and make you overpay. Third thing is what we've discussed in the last last series um or last episode of the series which is you know a deep

understanding of a property's value and really understanding of how to analyze something on the run without getting um caught up and uh misled by the agent price positioning and then just into the nuts and bolts of a deal where to when to i guess the easiest way to say this is when to hold them when to fold them was she like when to when to use a certain line um when to understand that an agent is bluffing, how to understand what your buy depth is going to be, knowing where to start the negotiation in terms of price and what the negatives are, doing it an alternative way,

and then having the confidence to be able to, you know, hold your ground when the agent is going to consistently have a crack at you multiple times before the deal finally gets over the line. So there's a lot to unpack there. I've missed hundreds of different steps I would go through as well, But they're some of the big things that I think an inexperienced buyer, and even someone that's done it 10 or 15 times, is just not going to be able to compete against a skilled agent.

Totally agree. Now, in your buyer-ready course, you refer to the Hello House golden 95% and 97% rule when it comes to negotiating. What's that all about? Mate, that's a secret sauce. You need to pay me for access to that. Win our appetite, mate. Win our appetite.

Exactly, exactly. I'm happy to give it all the way here. So, look, that's born out of, as you introduced me, thousands and thousands of transactions that I've done and where I start an offer and where I end an offer and just really tracking all those results and working out what the best strike rate is going either X number or X the way towards, you know, where you end up. So, how we really determine that is we spend a lot of time on the analysis, like really understanding what the assets were. So, once we've done that and we've got absolute confidence around what the number is, I then ask my customers to set me the target price. Now, the target price is what we call the line in the sand, the absolute maximum you're prepared to spend and where you wouldn't pay a dollar more, Bushy, for the property. And you know at that level there's no value and you're happy to miss out. So once we play that process out with our customers and if you're doing it at home, if you're really honest with yourself or yourself with your partner about what it is that you're prepared to go to, and there's a huge variance often in the same house, Bushy.

this is where the you know the the gloves are on and you've got to work out who's prepared to pay what for for a property and who's prepared to walk away but once you've got that number typically i offer 95 to 97 of the way there with my first offer now there's a there's a couple of reasons why one is if you're going to get um low balling offers to agents the very likelihood of that is you're going to get turned away if you get turned away you learn nothing in the negotiation so that's a problem. But the flow on from that is that you're going to end up starting to have to bid against yourself. Now, the more you bid against yourself, the agent knows that you're emotionally invested in the property. And now that they've said no, and you've come back for

a second bite of the cherry, they're more likely to keep saying no while you keep showing your cards and going up in price. So that's the wrong way to do it. So when we go 95 to 97%, the goal for me is to either buy it with the first offer or engage the seller in a gunfight at that point and we start the negotiation with the goal to understanding where they're willing to trade so that i can move to that price in a small increment if we feel fit to do so and of course we do because it's still going to be a fair percentage below what we think the property is actually worth so that allows me to move with speed it allows me to engage the seller and it forces their hand often to make a decision so let's use this in a real life example bushy if

because this plays out for me five days a week. You're going to come to me and say, I want to buy 12 Smith Street. It goes to auction in four weeks' time. It's just come on the market on Saturday. Went through and had a look at it. Really love the property. Guide price is over 900 grand.

Okay, great. Let's do an analysis and do all the due diligence. I'll spit that out. So get the actual number where we think it's worth and make sure it's the right asset to buy and there's no complications with it. So once we've done that, what I'm trying to do is drive your offer

really hard on day one and get an outcome by forcing the owner to be involved in that process every other buyer is going to hold off because the agent's going to say to them look it's just week one we haven't got feedback yet um we'll let you know after the first two weekends how we go and all they're doing is positioning you to pay an emotional premium against other people that are under a pressure cooker at auction and they want to extract the most money they can out of you when we go the other way and we engage them with a really strong offer early on day one or day three of the campaign or whatever it may be it forces the vendor into a decision and the decision that i want them to make is obviously to engage and i want to learn more about whether

they're going to waste our time and they're looking for a property a property you know an outcome that's unrealistic or if they're in the realms of reality and there's something here that we can get a deal done so if it's a no and then we don't you know end up anywhere near the price then we can move on on day one we don't spend four weeks wasting our time and we probably don't spend any time doing a building and pest or a contract review either at that point because it's mostly done verbally. And if they do engage, we quickly get our ducks in a line and we can purchase that property within the range that we wanted to. So that's the way that I stop a lot of auctions in their tracks. There's a lot more to it. That's one very small part of it. A big part

of that process when you're running a negotiation strategy like that is using leverage to control the time and that reverses the fear of loss with the seller. So this goes hand in hand with a lot more in terms of the overall negotiation but um that little trick works works really well for us yeah and we don't use it all the time we use it the vast majority of time there'll be opportunities where we've asked the right questions bushy which is crucial to being a good negotiator he's being a great question asker asker and a great listener so i'll ask you questions if you're the agent on lines of and i just did this this morning on another auction property of um okay what's your guide price bushy and you'll tell me your number and i'll say okay great so um is your client ready

to sell today um yeah you're sure or no they're not whatever okay where would they need to be positioned to be excited about an offer like where do you think they're going to be looking to trade oh i can't tell you that it's too soon okay great what did you tell them what was worth oh as if i'm going to tell you that okay cool well um you know our clients are looking in that kind of you know 9950 range are we wasting our time at that level oh look come along to auction you know if that's the best auction offer they get on the day they're definitely sellers they're motivated. Okay, great. But I would have already planted the seed that we've got motivation because of another property. So then I'll start digging towards an outcome that I want, which is what

buys it. And I've got that answer. And then I can deploy those other tactics. And once I've got that answer, I can then decide whether I make an offer much lower if I don't perceive there to be any other buyer interest or if they're super motivated to sell. But in the vast majority of deals that we do it's the 95 to 97 rule so there is variation on it it's not like a one-size-fits-all no i love that because it's flushing out uh the exercise up front and early which is a great tactic rather than getting caught up with the the whole fomo and the and the crowd scene of the at an auction or other exercise uh do you quick question on that um and you mentioned that you're often saying you know you've got interest in another property so that's bringing some urgency back on the on

the selling agent and the vendor on that context do you put a timeline on it or are you again this is one of the variables that you play around with depending on what sort of response you get yeah i typically do put a timeline on it but i think the mistake that buyers make is i'll say here's my offer and you've got till 12 o'clock to accept it there's there's no that's just a red flag to a bull as an agent that's almost to me as an agent i'd say great well i'll call you at five past 12 when i've sold someone else like it's kind of like you're not going to dictate terms to me because i'm the boss in this situation any good agent's going to control there campaign because they are in control and start to finish representing their their seller so the

better way of doing that bushy would be to say um and the first phone call from me might be something like this bushy um we love 12 smith street thanks for showing you know susan and peter through there on saturday really like the property um now i'm under offer with susan and peter down the line and another property locally um we've actually been under offer since late last week that agent is giving us massive pressure or the seller is giving us a lot of pressure that if we don't exchange by five o'clock Wednesday afternoon unconditionally they're going to put it on the open market so they're putting a gun to our head really you know it's not us it's them I'm in a position where this is their preference and it's really important to say

this property is their preference because if agents get a sense of you just playing us off multiple different you know properties they're like whatever go on go and buy the other one so it's like this is our preference it's just that we obviously saw it too late we'd already been down that line of getting offer and acceptance on the other property so they're in a position where they're going to make you a really great offer here today. And if we can make it work, awesome. If not, no problems. We'll jog on and we'll go and buy the other property.

But this is the one that we really want to go for. So in lieu of that, we're seeing value at X level. You know, I would have had the conversation already around what buys it and those other things to establish what the vendor wants before I then start to go into the dialogue around where they sit on price. But what happens there is if you walk into me as a buyer and say, oh, I'm going to give you $950.

That's my max I've got. That's my budget. I'll give you all 950 because I really love it and I want to get it done. But someone that comes in and talks about value and says, okay, we see value at 950 because of these reasons and because of this time pressure and the rest of it, it sets it up where you've got a situation where if you're presenting those offers to the owner, the owner is going to say, well, thanks, Bushy, very much for his offer of 950, but he can't afford my house. and then the other side is well okay well they've given me some real reasons here i need to really make a quick decision because they're not going to be here on wednesday and they've given me all the reasons why the value of this house sits at 9 50 so they're very different conversations that the agent takes back to convey to the seller when they're conditioning the seller and you've

got to put yourself in a position where you're helping the agent to close the deal so that's why the dialogue that i use anything that i write i do a lot of written offers on email because i know the agent's going to share it so i write it in such a way that's stacked to lead the age they leave the owner to feel like they're going to lose this opportunity it's really well written um and i know that the the agents are lazy and they'll send it straight to their owner because it's doing their conditioning for them i'm saying what they can't say to their client in week one without risking they're getting their client's nose out of joint so um without you know being disrespectful for the client but i position it in such a way that it

helps us um and it's an advantage so yeah there's a whole system here and a lot of it is you know what do i deploy at the right time that's going to be the highest percentage play to close this um and so this is very much a learned skill bushy it's a it's a you know i've made lots of mistakes over the years and then you start to piece this puzzle together about you know what the agent's going to say to you now and i can almost word for word tell you what an agent's going to say on a particular call at any certain point in the negotiation because they're so um so similar in the training and the methods that they do things that most agents will say the same thing to me at the same time which means i can see through that and say well there's no buy here or there is a

buy here because if i sat in their shoes what would i say in this situation i tell you there's another buyer to create competition or whatever it might be and that gives you an advantage where you can turn the screw i love that and there's there's a a thousand bits of gold in what you've just shared with us there that we won't have on time to unpack because and people will need to do the get buy ready course to really get their head around that a couple of the key things that i'm I really picked up on there are helping the agent to do the job for them because I see a lot of people treating the agent as the enemy and that that creates its own issues just because of that that approach the other big thing that I there's there's way too much focus on price I think that

people think our property they just think about price as you know there's a there's a thousand other things that are important in the negotiation process to achieving an outcome can you share what some of those things are over and above price and some of the approaches that can assist you put your offer ahead of someone else's. Yeah, well, I think we've touched on a few of them there. We talked about leverage. You know, we're leveraging another property.

We're talking about reversing the fear of loss, so putting the pressure back on the seller to make a decision rather than them having all the cards. We talked about how we can condition the agent and condition the seller with the dialogue that you use and the words because words mean a lot. They hit hard if you do it right. So there's a few things like that.

But in terms of the nuts and bolts of a deal, then you're looking not just at price, you're looking at settlement dates, you're looking at inclusions, exclusions with furniture. I'll give you an example of this. We bought a property a couple of weeks ago for $3.15 million in Sydney and we had two buyers, us and another party, prior to auction going head-to-head. So we both got to the same price, $3.15,

but I'd asked all the questions about what the owner wants and the owner wanted a very particular settlement date which my clients were happy to do and they wanted to leave about $30,000 worth of furniture now that is a rare thing but they wanted to leave like outdoor kitchen and outdoor furniture and outdoor heaters and things because they were moving to Queensland and they'd already bought and they didn't need any of it and they had nothing to they had nowhere to get rid of it so it was important for them to stay and they wanted it was important for them to keep it because they had everything custom designed done for that house and they wanted the new owner to walk in and it was being turnkey for them so knowing that we made an offer that included those things and

worked with their settlement date the other offer didn't ask any questions the agent told me this and said we want a February settlement not December the 1st or 2nd or whatever it was and they never asked about any of the furnishings so it came to a head and the agent said well if you guys can unconditionally sign at six o'clock tonight it's yours so we bought it we paid the same price we beat the other buyer who possibly would have paid more the next day and we got thirty thousand dollars worth of furniture out of it as well so it's just asking those questions like that to understand inclusions exclusions and settlement dates um i often negotiate a five percent deposit um in different states that might be a much smaller deposit like sometimes

we exchange in queensland with two thousand dollars total for the whole time yeah um so it's about you know working out for your client and risk and those things as well to cover on off on those basis um yeah there's a lot that goes into it bushy and um contract amendments which we'll talk about i know in the transact section um as we get further into this series but that's another thing that is very relevant in the negotiation as well we're talking about um you know deleting or releasing deposits and deleting the clause that is to to include or release a deposit so there's you know it can go either way um there's you know penalty interest in the contract as well that you want to strike out or strike down um there's lots of different

little things that you need to understand about contract law to make sure that you pick the right fight um for example many many many times too many times that i i can remember over the years i would have clients that got their price when i was selling a property for them got their terms in terms of settlement and deposits and the rest of it but wouldn't budge on stupid contract terms so they wouldn't budge on reducing penalty interest from 12 to 8 or you know the cost of sending a fax to someone or whatever from six dollars to four dollars or whatever the silly silly silly things were down in the weeds and to risk a two million dollar sale or whatever it was because they're just doing it out of spite so you've got to know when you're buying a property

when to hold them and when to fold them there's a few things like that that a solicitor will say to you you should not release the deposit it's high risk and you just got to weigh that up well they put that in the contract they can't sell it to me unless they have the ability to have an onward purchase. So if I strike that out, it's basically going to mean I missed the property. You've got to weigh up the risk versus reward in those situations. So those types of things are really common for me in a negotiation to understand upfront before I start the process too. Yeah. And the take home I'm picking up from what you've shared with us, there's a whole raft of negotiation opportunities that aren't just about price. You just need to be smart about understanding

what's important to both the vendor and the selling agent to assist you in that regard. Now, we touched on this already, but I'd like to dive in a bit more. What are your thoughts on conditional versus unconditional offers? Yeah, really important. And this is a constant battle for us in our office day to day as well. It's funny, Bushy, I mean, you're incredibly in tune with the mortgage market. Why do some states or some buyers in different states think that they should have a um 7 14 21 or 30 day finance clause but then everyone that buys in sydney buys unconditionally with a 66w to waive the right to a five day cooling off like you know as an agent for 25 years i would never let you buy anything conditionally from me i would say

to you bushy that's great that you want to buy the property it's great you want to pay that price go away and do your building and pest inspection and your due diligence and when you're a real buyer come back and sign a 66w on your contract and that was pretty much the way that we dealt with it and everybody did everyone wanted to buy it so they went away and they bought it like they were buying it under auction conditions now there's potentially 3 000 auctions again this weekend all 3 000 of those buyers are probably well the ones that have got a loan have got some sort of conditional approval you'd hope before they bid um and they're going to take a chance that they're buying a property at the right price and it's going to get valued up by the lender so you know

they put themselves in a position where they can buy a property unconditionally unconditional contract offers make a massive difference in the negotiation so if you really need a condition in a you know to be added a clause around building invest or a clause around a finance term have a think about that a deep think about it because it's just the norm to ask for it in Queensland and WA and certain other parts of Australia but it's funny because you know in Kira on one side of the border in the southern end of the Gold Coast everyone will want to finance clause, and you go to Kingscliff on the other side of the border, and you probably won't get one. Same buyer, same streets. And it's just a psychological thing that people think they need

it. I think if you really understand analysis, then you've got arm's length of comparable sales evidence and competing listings, and you're confident around price, you probably don't need it. You should ask your broker about what the best advice is before you do anything. But yeah, it's an interesting one. So I think to answer the question, unconditional is a substantial advantage in buying a property, especially prior to auction. If you're trying to buy anything prior to auction

with a conditional contract, it's almost impossible. It's very, very difficult to do. So you've got to get yourself in a position where you've done your due diligence and you've got the confidence to act. I would say, and it's probably getting off the topic a little bit, well, not off the topic, but jumping. But I have always encouraged my clients

to do a building and pest before they offer. It's the reverse of what the general, you know, population in the industry thinks. Everyone thinks, well, you lock up the deal and then you get a building and pest cause, but it makes it so much more attractive to a seller when you've already done the building and pest or a strata inspection report,

and you can strike quickly with no conditions. That means the owner's going to guaranteed sale. Even if you're $10,000, $15,000, $20,000 less than another buyer, you potentially could still win it because your terms are better. it just gives you an unfair advantage that you know if you spend a little bit of time on doing these things and you work with speed you can put yourself in a position where you can save a lot of money or secure the first property that you really want to go after yeah good advice so the probably the only comment to make around the the conditional side of the equation it does to some

degree come down to personal circumstance because you know talking about the finance side now particularly when we've seen so many rapid and almost daily changes in lending policy in the last few years. There are some clients who are sailing pretty close to the wind in terms of capacity, and it doesn't need much for them to fall over. It's got nothing to do with the property. It's about their personal situation. So the only thing I would put a disclaimer on what you shared with us there is that make sure you talk to a very savvy mortgage broker before you make an unconditional offer to make sure that if a circumstance is beyond yours and anyone's control you don't suddenly end up in in deep water uh now that's yeah we ask all the minorities to

go back to their broker as well and ask that as i said it's really important to know that and the other thing is bushy buying in different parts of the country dictates different terms so in wa as you know you need um a due diligence clause or you want to cover your butt there that you that you um are buying the right asset because they don't have the same yeah and they don't have the same leeway with building a pest it's only structural exactly exactly so even you know we bought a house recently and it had termite damage in the stumps um but it was determined not to be structural damage so they replaced the the termite affected stumps but you couldn't back out of that contract now had those termites gone further into the house um you'll never know that's a it's a

punt really that you've got to got to take i mean that's true in anywhere there's been termite damage before there's some element of risk but yeah in wa in particular then then you've got to cover yourself so yeah horses for courses mate but generally speaking if you can make an unconditional offer you're going to be in a much stronger position 100 from a selling age perspective that gives them a lot more confidence that there's not going to be an issue with the deal so he's more likely he or she's more likely to lean in that direction than someone who has got any form of condition so very good point there successful property investment is a game of finance do you have the right team and the right game plan realty talk is brought to you by

know-how property more than mortgage brokers bushy martin and his team of investment architects set you up with a sustainable strategy structured to lower your costs tax risk and stress while increasing your capacity for growth know-how has helped over 1900 homeowners and investors secure more than 800 million dollars in property wealth so get set to live more work less and live your legacy want to know how to invest in your freedom visit knowhowproperty.com.au this is realty talk powered by realty.com.au now i now want to turn to the sort of different ways of buying and selling property uh scott and i'd love your thoughts on approaches and tips that buyers need to consider when it comes to auction,

private treaty, best offer buy and seal bid offers if you can take us through that? Yeah, sure. Okay, well, I mean, auctions is an interesting one because you're going to deal with those in most parts of the country and that's quite daunting for a lot of buyers and I actually get a lot of people that say to me,

I've found this property but I'm not interested in bidding on it because it's going to auction. I'm like, that's interesting. Look, you've obviously had some trauma around this before or someone else in the family has because you're going to have to deal with it If you want to buy a particular property, then you need to be wise to the world, right, and how this all works. So I would say to you, we dial it back to what we talked about with that auction strategy before, that the best thing you can do with auction is try and buy it early so that you don't get caught bidding against emotional people that have got buyer fatigue, who are easily misled on pricing because they haven't done their research or homework.

And they get sucked into that battle where it's easy for them to go in over four weeks, fall in love with the property, see it multiple times, and then hit up Bank of Mum and Dad for some extra money. and you're really competing with people that you've got no control over the outcome. So, you know, if you're going to go bid at an auction this weekend, you've probably got 20% chance, you're likely going to be one of five and you're going to be likely paying an emotional premium to win it.

So, yeah, just know how that process works and know that there's an alternative. A lot of agents will try to mislead you by saying it can't be bought prior, it's got to go to auction. Unless there's very specific legal reasons, that's just them saying, go and queue up with the other monkeys

and I'll see you in four weeks' time and I'll extract an emotional premium out of you under a blowtorch of pressure. And that's what they want to do. They want their four weeks of sunshine to build their profile. It's very much a deliberate strategy and it gives them the best chance to create competition and get you under that pressure cooker situation.

It also gives them four weeks to condition a seller who they're very likely over-promised a price up front to win the listing. Give them four weeks of no offers, which is why they tell you there's no offers and it's got to go to auction. And then you all turn up on a Saturday, the vendor's panicking

because they haven't had any interest in their house. they get a low reserve and the buyers are all revved up because there's lots of interest and they overpay and that's how they marry those deals up on on the weekend so auctions are fraught with danger but you have to compete at those um if it's the the right property um so just be prepared for that yeah um expressions of interest i sold a lot um via auction and eoi when i was an agent um i liked it because of the murkiness um you know i would bring you in bushy and uh another four people into my office on a tuesday by four o'clock or whatever it was with my deadline sealed bids is the same thing really as expressions of interest pretty much and i would say okay

bushy you've made an offer of six hundred thousand um it's it's triggered a sale my owners are happy to accept that if that's the highest offer they get i'm only accepting unconditional offers um so i want you to come in and there's going to be three other people that are competing against you if you come in and pop your offer in an envelope or email me your eoi before four o'clock and i'll let you know who's the successful buyer after that and what you'd end up with is bushy at 600 someone at 605 someone at 612 someone at 637 and someone at 745 and the beauty was i would ring the people at 745 and say congratulations and well done you know joanne you you price this within you know perfection you're five grand above the the last buyer that was just underneath you

and you just got there well done you've done so well to nail it so my job was to make you feel like you didn't overpay but in the meantime you've just overspent by you know 107 108 grand over the next best buyer so you've got to be really cautious about dealing with sealed bids and eois and the same thing applies to anything do your homework understand where the line in the sand is where your target price your walk away number is and a really good little game that i play bushy with our clients that are going to bid at auction or they're going to make an offer on our property is to say okay um bushy sonia you've probably got varying degrees of what you want to spend on this um you know our analysis says it's it's 600 000 um where do you want to draw the line

to set as a you know walk away price for the auction tomorrow uh 580 and then sonja might say 620 okay well let's try and get you know to the same level let's just say it's 620 that you guys arrive at okay great let's play this game so if the agent says um it passes in at 620 and comes over to me and says for 630 000 you can buy this right now but there's no further negotiation what do you do over to you sonia bushy and i just shut up and you were like oh look you know yeah look we'd go to 630 if we could get it done great that's your target price let's keep going at 640 the agent comes over and plays the same game where are you going oh i wouldn't want to pay 640 but look we probably have to just to get it done we're sick of it we've been looking for three months

great 640 and this goes on and you've got to do this you've got to do this because they'll you'll realize that sonia's on a different page to you or you're on a different page to sonia and that your target price is actually a lot further than what you think because what you don't want when you're in this EOI or an auction standing there on bidding on the day is to look at each other and keep going yep yep more more above where you just told your wife or vice versa that you were going to stop so that's just going to create massive problems and it's where people get caught bidding just blindly in the dark and overspending and get carried away emotionally so it all starts with a clear and definitive idea of where the line in the sand is and then you can make a judgment call on

where the interest has been in the property so far where the agent says they've engaged a trigger point and make a decision on how hard you're going to go from from there what you want to be able to do though is say okay if the agent brings me back at 10 past four and i've lost i'm confident that someone overpaid i didn't see value so if i went to 637 and someone paid more than that i've got no regrets good luck for them it doesn't represent any value to me whatsoever so we've got clients that will go to auction and we try to avoid auction at all costs obviously for the reasons we've discussed but we'll have clients that we have to bid for auction they might have only seen the property in week three or week four of the campaign and i'll say to them if you do this

you'll have no regrets and they'll miss out and i'll say you're right like at that point good luck to them and you can just sail that one off into the distance and keep looking happily so it is an important game to play 100 and the number of times that you would have done this many times more than i but the number of times i've been at an auction and the couple as soon as a couple look at each other the smart auctioneer is going to know that there's still there's still some money to be put on the table so if you go in with the strategy you're talking about and you poke a face and you hit the level and you just walk away completely different story so we're love that now we touched on this already but uh again in in your get buyer ready course you talk about

the rules about bluffing can you share some of those with us you can get caught out pretty badly here if you don't know what you're doing and that's why I addressed it in the course so I think for people that think oh I know how to negotiate I'll just tell them I'm walking or I'm telling them they've got till 12 o'clock to take my offer and then I'll go but you've got to understand the circumstances and you've got to understand that sometimes like we talked about earlier about how to control the negotiation and win it on day one as quickly as possible by using time pressure and reversing the fear of loss sometimes we ask those questions and we realize genuinely that the owner's not in a position to sell so some agents will openly say to me look i know what

you're doing i know that you want to buy this i totally totally am fine selling it to you but do yourself a favor and give me till thursday's open for inspection because they are just not ready to sell and it's just going to make everyone's life harder if you go at this too hard like you're better off they'll end up wanting more money you're better off waiting till i show them that no one else is interested again at the second open on Thursday and then hit them with the offer that you want so you've got to work with agents you mentioned that before like they're not they don't have to be your friend but you know you've got to work with them so sometimes I take advice or counsel from the agents to say do you know what you're dealing with the seller you're in a

better position to understand this I've asked the questions I wanted to ask they know what I'm doing you totally get what I'm trying to do in how hard I'm driving this but I'm going to just cool my heels a little bit so there's a bit with bluffing that's the same so if you're going to go in and just um blindly say something that you can't back up or you're going to move from later you're going to look like you're an absolute um beginner with this and it's going to come back to haunt you later in terms of when you pay more money so it's about you know again knowing them knowing when to hold them or when to fold them it's about understanding a good time to introduce leverage it's not when you see a property fall in love with it and then say oh but also we're under

offer down the road we've got another property and they're like yeah whatever everyone tells the same thing it's because i planted it that seed possibly even before they looked at it yeah yeah or i get my clients and i say to them if you're going to do this yourself when you go through the open for inspection let them know like we love this property we couldn't wait to see it but we've actually already made an offer at you know down the road and this blah blah blah the story that i mentioned before and you're planting that seed earlier and then you know three or four days later you come back to it the agent goes okay all right well you did actually say that it to me on thursday so i'm going to take that as as gospel so it's just about being smarter that

the negotiation starts at a much earlier stage if you are going to try and bluff them if you are going to use those tactics you've got to start to utilize you know all that dialogue at a very early point to get exactly what you want embedded into the conversation and then you come back and you just you know you hook them again at that point and i'll use other things this conversation could go forever around negotiation but i'll use other things when i'm um feeling out where the price needs to sit that's also a bluff or bushy and i'll say things like um okay you're quoting eight to eight fifty uh mr agent or mrs agent um my clients you know looking around that kind of nine nine ten mark um based on what we're seeing locally is that a waste of time now i'm not

telling you i'm going to pay nine or nine ten i just want to know if the eight to eight fifty guide is a waste of time and it's really north of nine ten so you know i'll give you an example this there was a client that rang us a couple of weeks ago and said really interested in buying this property um i said great what's the guide price and she said 830 to 890 and i said great what's market value 830 to 890 okay yeah great so what's the actual value of the home though but that's i've said it twice it's 830 to 890 i said no no that's the agent's guide price which is not worth the toilet paper it's written on that's a marketing employee to suck you into the fight what's the home worth based on you know comparable sales evidence and market data

oh actually i don't know like we just we so she said look we've already made a verbal offer of 860 and we're just about today we've ordered a building and pest inspection 700 and we're just about to do the contract review the section 32 with the with the conveyancer and i said let me hang up and call the agent and i'll call you back and i just so one phone call to the agent i said mate where do i need to be positioned on this to buy he said oh 830 to 890 i said yeah you know i know that's the guy price where do i really need to buy this i'm going to position this buyer in such a way that i could get you a really good buyer on this well i just play buddy buddy where do i need to be i'm not going to overpay but i'm just making them feel like they can trust me and

open up oh mate it's probably gonna have to have a nine yeah that's what i thought too okay cool so like you know based on a few things i'll look that it might go over nine right he goes oh yeah probably probably will go over nine said where do you what what did you guys tell him he goes oh you know up to 950 i said okay do you think 950 would knock it on the head today he goes oh you might get it somewhere between you know nine and 950 depending on the level of interest but i said okay great well one last question what's the highest offer you've knocked back already he said 860 so from another buyer that wasn't the buyer they'd already had 860 back from another buyer so they were my client that i was talking to is already out on that property they just hadn't

asked the question so they're about to spend you know a thousand bucks or whatever on all that and all their time invested in the process and they never had a fighting chance from the very start so yeah it's asking those questions and you know baiting i'm baiting baiting baiting the whole time just to get the information out of them that i want to and that that just makes you know all of the guesswork go out of it and that's why i said to you i don't use a lot of comparable sales data because you get to a quick view of well what's the owner actually want what did you tell them where are they willing to sell then the rest is down to what we think it's worth beautifully said and i and i love the way that uh the approach is everything with the example you've just given us

is a great live example really of asking the same question in five different ways and asking them quickly enough and keeping them on the go so eventually you get the answer that you're looking for by repositioning to get the same information. So that's a real skill right there in itself, I think, Scotty. So look, I know we could talk forever on this subject and all I can say is that there's this and a whole lot more in the buy ready course i want to thank you again for these awesome negotiation tips mate

and again i suggest that anyone who's looking for further negotiation assistance on their next property reaches out to you and your team at hellohouse.co that's h-e-l-l-o-h-a-u-s.co hellohouse.co by clicking on the link in the show notes and given the challenges of successful negotiation if anyone listening is still not confident to negotiate and they're concerned about the stress of paying an emotional premium, I suggest they reach out to you or one of your team of experts to discuss how you can do that for them. Now, that actually brings us to the close of the negotiation segment,

so make sure you keep watching and listening to the Property Hub Special Buyer Ready series because in our concluding session, we're going to cover off on how to navigate the sales process from offer to settlement in order to secure your dream property with confidence. So thanks for all of your time again, Scott. Thanks, Bushy. See you, mate.

Hi. Just before we go back to the show, I want to spend a few seconds and tell you about a book that was sent to me that's now become my go-to reference when I'm looking for inspiration about property investment. You know, sometimes it's not about knowing all the answers. It's certainly more important to know what questions to ask. This book by Rasty is called The Property Wealth Blueprint. And it's one that you don't read just once and then put it away. It stays out as a reference. It's a book that you go back to time and time again, as I do, because it's packed with personal experience and with great examples of how to get property investment right.

It's very frank. It's to the point. And as you can see here, I've needed to bookmark several points. And I can tell you that it's a constant companion on my desk here. The remarkable thing is that it's absolutely free on Rasty's website, getrare.com.au. Get Rare. It's a gateway to a richer life. The website there for you again, getrare.com.au. So get this book.

Get it for yourself. And that brings us to the end of this week's show Thanks to Scott Agate for more tips to get you buyer ready Scott rejoins Bushy again next week for the final part of our four part series and next week they're going to add the final brick to the negotiation wall, so to speak

Make sure you don't miss a single episode of Realty Talk or Bushy's Get Invested podcast delivered to you each and every week, you can do that by subscribing to the Property Hub now on your favourite podcast player or wherever you're listening to or watching this show. Also, make sure you join the conversation anytime on Facebook at the Property Hub Collective. Thanks to our supporters and content partners,

Realty.com.au, BMT, Tax Depreciation, Know How Property Finance, Get Rare Property and Apiro Marketing. I'm Kevin Turner and on behalf of Bushy and the Property Hub team we look forward to seeing you again next week.