In this blog I'm going to share with you the eight questions that you can ask estate agents to get them bringing the very best property deals direct to you. There are lots of ways of finding great deals, the obvious one that most people think about is speaking to estate agents because they've got lots of property for sale, which is very true. Unfortunately, estate agents sometimes have a bit of a dim view of property investors, because most investors don't know what they're doing. They go and say things like, Oh, can I have all your BMV deals, some of your motivated sellers, I want to do some PLOs. The agents think, what the hell are you talking about? They just take their card and file it under B for bin.
So you need to know how to approach estate agents or what to say to them. Instead of asking them for all the discounted properties, there are certain questions you can ask that get them thinking about the circumstances. You can then find out if the seller might be motivated. A motivated seller is what we're looking for, because they might be flexible on the price and or the terms of the sale. So let's start talking about these eight questions you could use.
One of the best ways to profit from property, is to make money the day you buy. This is instead of having to wait for the property market to go up. Buying at the right price is really important. Ideally you want to buy at below the market value, which means you have equity locked into the property the day you buy.
The best way to do this is to find motivated sellers. These are people who need to sell their property quickly. They may also believe speed and certainty is more important than the cash amount they receive. This means they might be flexible on the price and/or the terms of the sale.
The very first question you might want to ask an agent is, do you have any empty properties. Now why empty properties? An empty property is not good for the property owner. If it's empty, it could get broken into,vandalised, infestation, they've still got to pay the council tax on it. The standing charges for utility bills, they've got to insure it, and they got no income coming in. They might have a mortgage they're paying on it. So an empty property is not good.
There are four basic reasons why a property might be empty. The first one is maybe it's a deceased estate. Someone may have unfortunately passed away and they've given it to some of their kids, who've inherited it from the other side of the country.
“…they ask agents for repossessed properties, but agents sometimes don’t like sharing that.”
The kids don't want it, they just want to sell it. Now you can spot these properties, often they look pretty neat and tidy, but they're just a bit tired and dated. They might have a kitchen unit from the 70’s and a bathroom from the 80’s. They just don't look great, they need modernising. It is then a great opportunity because it's a property where you could add value to the property. Modernising kitchens or bathrooms is a great thing to do to really lift the value of a property. So that's the first reason the property might be empty. The next reason a property might be empty is maybe it's a repossessed property. Now often investors are looking for repossessed properties, they ask agents for repossessed properties, but agents sometimes don't like sharing that. So asking do you have any empty properties, they might well be repossessed.
The way you can spot those is when you look at them often they're boarded up, they've got grilles on the windows and the doors. When you go in, they've got the black and yellow tape around the cooker and the sanitary unit saying ‘do not use’ and often they're in a bit of a state. Normally the person who's been repossessed understandably, they’ve regrettably damaged the property on the way out. So that's how you can spot repossessed properties. The third reason why a property might be empty is maybe it's an ex-rental property. It's a landlord, who owned the property they were renting out for whatever reasons and they don't want it anymore. It's got no tenants in it, it might have a few odd sticks of furniture that genuinely don't match. It looks a bit of wear and tear. That's how you spot an investment property that was owned by a landlord. The fourth reason why a property might be empty is maybe the owners have just gone, they've had to relocate. Very often, the property's completely empty. It's in pretty good condition because they're trying to sell it, but it's just empty. They might have relocated or they've immigrated. This empty property could have a mortgage on it that's costing them money, and they want to get rid of that liability. So empty properties will get you thinking about people who really want to sell or get rid of that property.
Question number two is, do you have any properties that have been on the market a long time? You might be thinking, so what is a long time? Well actually, it really doesn't matter what you think a long time is, it's all about what the agent thinks is a long time. We're looking for properties where the agents kind of almost given up on this property. It's been on the market for a long time. No one's really interested. There might be all sorts of reasons why it's been a long time, maybe the price is too high. Maybe it did sell but the sale has fallen through. Perhaps it's fallen through twice or even three times. If it's been on a long time, the owner might be coming very frustrated. When they first put it on, they weren't really that bothered, they'd sell whenever. But it's been a long time, they want to get a sale done, there might be an opportunity there. This is a property that the agents given up on a bit. So actually, if you can help make some commission for them, they're going to be very grateful for that.
So question number three is, do you have any properties where you're not the only agent selling it? I'm sure you've seen this online where you see the same property appear in descriptions from different agents. So appears many times on Rightmove or Zoopla, or maybe even seen the property with multiple for sale signs outside the property. Why do you think the seller is listing with multiple agents? Is because they need to sell the property. They want to get rid of this property. So they've gone to multiple agents to try and sell it quickly. If that's the case, you definitely want to be speaking to one of those agents about the property because maybe there's an opportunity to help that person and get a great deal for yourself as well.
“The agents just see it as a bit of a pain, but actually there’s an opportunity to help this person to get rid of their property.”
Question number four is, do you have any properties that are for sale, but they're also available to rent. You see this occasionally, this usually means that the owner would like to sell the property primarily, but they accept if they can’t sell it they’re happy to rent it. Very often that's probably because they've got a mortgage on it, and they want to cover the cost of the mortgage. Maybe they do want to sell because they don't want the property, but maybe they don't need the money right now. That is perfect for a strategy we call a Purchase Lease Option. It's more of a creative strategy, where you could control a property, you get cash flow and equity growth from a property you don't own. What it means is you don't need a mortgage, you don't need a big deposit, you just need to know how to use this specialist investing tool. That's a great question to find Purchase Lease Options.
Question number five is, do you have any sellers where the seller keeps on calling you in the office to find out if there's any updates? A bit of a pain and no one in the office wants to speak to them. The reason Mr. Smith keeps calling because he needs to sell his property. The agents just see it as a bit of a pain, but actually there's an opportunity to help this person to get rid of their property.
Now question number six is a bit of a sensitive one. If you ask an agent, you want to ask them face-to-face this question because you want to watch the reaction on their face. So what you say is, do you have any... How can I put this? Do you have any smelly houses? Now you might be smiling as well because maybe you've been to or you've smelt a smelly house in the past either for rent or for sale. Sometimes you have these properties and unfortunately, the owners have pets that might leave little presents lying around the house, and they don't bother to clean them up and the house starts to smell. The owners don't really know this because they kind of get used to the smell, they get nose blind. They can't smell it anymore. Whereas someone externally coming into the property, it almost hits you like a wall, this stench.So if you think about it, if people are looking to buy a property and they go and look at this property and it just stinks, they often can't get beyond that smell.
You know it's bad when you get to the property and the agent says, "Ah, Tim just show yourself around, I'll wait out here." What's going on there? The reason is, they know it's a really bad house. You know what the smellier the better. It means that most people won't even want to look around or they won't make offers. So there's not many offers for that seller. They’re going to wonder, well, what's wrong with my house because they don't know it's smelly. They're going to be open to some more creative offers. The secret of smelly houses is that once the owner and their pets leave their property, you can pull up the carpets, incinerate them, scrub the floors, put some new carpets down, paint and suddenly it's an amazing house again. But it's just people couldn't get beyond the smell. So that could be a really really good deal for you.
“You know what the smellier the better. It means that most people won’t even want to look around or they won’t make offers.”
Question number seven is, do you have any properties that you just can't sell? Now, this is similar to maybe property's being on for a long time, but maybe that's because the sale keeps on falling through. These are properties they just can't seem to sell. The price may be too high, there could be something wrong with it, but haven't been able to sell. They've almost given up on this. There might be a deal there. because the seller is thinking, why is my property not selling as well, so it's an opportunity for them.
Finally, question number eight is, do you have any properties that are listed as cash buyers only? Now why is the property listed a cash buyer only? Normally it means that the property you cannot get a mortgage on it. So only people who are literally buying cash can actually buy that property. So why can't you get a mortgage? Well, there are a number of reasons. Maybe it's not inhabitable. if it doesn't have a bathroom or a kitchen, well, no one can actually live there thus you can't get a normal mortgage. Maybe there's structural issues, some subsidence. So the buildings kind of moving over, and no mortgage company is going to handle it because there's a risk there. Now, by the way that can be fixed, builders can come and fix it, give you guarantees, and once it's been fixed properly, it's then mortgageable. Or maybe it's a property where is a short lease. If there's less than 70 years, no mortgage company is going to give you a mortgage on a leasehold property with that shorter lease. But again, that can be extended by paying a fee to the Freeholder and thus, it's then mortgageable. So if someone says a cash purchase, rather than buying it cash, you could maybe go in to agree a cash purchase, but secure it with what's called a Purchase Option.
That gives you the right to buy the property but not the obligation to, you can then get the problem fixed, make it mortgageable and then buy. Because it's cash, there aren't as many cash , the cash price is going to be a lower price. So this is a great way to find really good deals by looking for one to the cash only, not actually buying them cash, but fixing the problem and then buying it, as long as you've secured it with a purchase option. So by asking these eight questions, you want to get the agents thinking about what are some of the deals that might be slightly different from the ordinary ones that most investors go for, but means there's less competition and some really good opportunities for you.
This content by the way has come from my Property Magic podcast. It's a completely free resource. Every Tuesday I bring out a new 15 to 20 minute video, completely free. Just me, no one else no adverts. I share content for my Property Magic book for my Property Mastermind programme. There's over 10 hours of content there you can binge on completely free of charge. So go and have a look for the Property Magic podcast on iTunes, on Google Play, or Spotify, and subscribe to that as well.
The final thing is, if you're struggling finding deals, these questions were finding deals from estate agents, which is fantastic, and it works. But one of my favourite strategies is actually going direct to the seller, finding a seller who's motivated and working with them to find an ethical win-win solution.
So if you want some deal sourcing step by step training, click on the link below and come and join me for some online training, all about other ways of finding deals.
If you would like to learn more about sourcing property deals, Simon Zutshi has put together FREE online training.
To find out MORE about how you can access this valuable Deal Sourcing training at NO COST - click here.