There are many techniques for generating leads to buy properties, all of which can be worth trying and pursuing at one time or another. But often, many turn their noses up at the idea of finding deals through estate agents. In my opinion, this is rather short sighted. If you think about it, around 90% to 95% of vendors consider agents as their first port of call when selling their properties and as such, they can provide access to many great deals.
Many investors also believe that the only “good deals” to be had from an estate agent are those hiding in their bottom drawer and which are reserved for their very best buyers. Although to some extent this maybe true (as it certainly takes time to establish a good relationship), I think there are still plenty of other properties on agents’ books that are worth pursuing.
Unfortunately these deals aren’t marked as “below market value” and will never be advertised as being sold by a “desperate vendor who will accept a much reduced offer!” So the only way you’re going to unearth these deals is with a bit of hard work.
When you know your area reasonably well, you’ll begin to spot when properties come onto the market at what looks like an already cheap price. This may give you a clue that the vendor is looking for a quick deal or that there’s a story behind the sale, which may result in your doing a good deal. Repossession, divorce, inheritance and relocation are just some of the reasons why some vendors may need to sell up as quickly as possible – but you need a keen eye to spot them.
Rightmove is a great tool for helping you with this and by setting alerts for your investment area you can keep an eye on what’s coming onto the market that’s a little bit different or interesting. And then you can quickly book viewings.
Of course, when I first started out in property I didn’t end up buying every property I went to see – far from it – but it was a great way of building relationships with agents. It helped me to show them the sort of properties I was interested in, and they could see I was prepared to act because I was straight on the telephone booking viewings as soon as they came onto the market.
You may think that things have changed since I began many moons ago, but it hasn’t really changed at all. A few months ago I decided to start buying properties in a completely new area and to start from scratch as if I was a beginner. (I just wanted to see what would happen and how hard it would be to start nowadays, so I can give better advice to my mentees).
One morning I visited a dozen agents to ask for details and to make appointments to view any properties that appeared interesting. I didn’t know any of these agents, they didn’t know me, and I didn’t know the areas very well either. Doing this resulted in my being able to find a bargain property which I purchased, so from personal experience I do know this does still work.
There is one tip I will give you though; and that’s to treat agents and vendors with respect. I was chatting to a friendly estate agent a little while back who told me that when they come across an investor who makes a ridiculously low offer, (and by that I mean stupid, stupid low) they literally scratch their name off the list and that investor will not be offered any more property.
The example she gave was of a property that was on the market at £80,000. I imagine this property was probably quite a good buy even at that price, and it had already been discounted quite significantly to get a quick sale, but an investor had viewed the property and had later called to offer £50,000. Personally, I don’t blame the investor for trying. After all, if you don’t ask you don’t get. But there are ways of putting an offer of this nature forward without causing offence. (The type of “offer” that isn’t really an “offer”, if you know what I mean). My estate agent contact told me that investor will not be offered or shown any more properties.
Sometimes it can help to describe yourself as a cash buyer, so long as you really are a cash buyer as nowadays some agents ask for a copy of your bank statement or other proof that you do have the funds to buy cash.
Being a cash buyer can make a difference. With a couple of deals I’ve done lately, the estate agents have used me almost as a reserve because I was a cash buyer. Both properties had been under offer to purchasers who needed a mortgage, but in both cases the properties had failed on the valuation.
These were not issues that concerned me terribly – structurally everything was fine and personally, I think the valuers were a bit OTT. The agents and vendors realised they weren’t going to be able to sell the properties to a purchaser requiring finance, and so I was offered both properties at a significant discount. In this instance, and of course many others, being a cash buyer certainly worked in my favour.
Even if this is not the case with you, treating both vendors and agents with respect can go along way towards ensure you have access to some great deals. And as you build up your portfolio and your relationships with agents, you will find that some deals can actually come to you. Simply stay focused, respectful and mindful of what you need to succeed.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, Author & Property Investor
PS. If you’re considering “property” as the path to your own financial freedom, why not take a look at my best selling “The Successful Property Investor’s Strategy Workshop” to help you get started. This is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. Find out more at: www.ThePropertyTeacher.co.uk/the-successful-property-investors-strategy-workshop.