Hello and welcome along to the Property Academy podcast by Opus Partners.I'm your host, Simon Knight.And I'm Andrew Nicholl.And today on the show, we're talking about the top seven questions to ask at open homes.
Now, whenever you decide to go to an open home and start looking around at properties, you're probably thinking, okay, how do I act?What sort of good questions should I ask the agent?So I get a sense of the property.
And as you guys will have heard in a previous episode, I'm currently going to a whole heap of open homes looking for my first home, actually.
And one of my favorite things, Andrew, is to look around the house and then I start drilling the agent with questions.Not in a mean way.
No, no, no.I just know how you are.You will bombard them with a bunch of questions and try and dig down into the exact detail.What are they selling?Where are they going?
Oh, these are the questions I ask to try and get a sense of the property.So you kind of know what to offer and whether you're dreaming or not.And so here are my top seven questions.So my first one is what has the sales process been so far?
And by that, I mean, is it going to auction?Has it already been to auction?Has it changed?Has it gone from price by negotiation to advertise price?What sort of offers have been listed?All of those kinds of things.
And if it has been to auction, were there any bids? and what was it passed in at?And there are actually a couple of ones in Auckland that I'm looking at because the market's been a bit slow.They are priced by negotiation.
You ask, what's the sales process been so far?Oh, well, it had an auction at this time.Oh, yeah.What did it get passed in at?Oh, there weren't any bids. Ah, that's interesting, so there wasn't a lot of interest.
That tells me that maybe there hasn't been much interest, maybe the seller has been conditioned to take now a lower price and their expectations might have been reset.
And this is all about trying to understand where is the seller at, what process have they been through, because if a property's been on the market for Like, not a long time, let's say it's just been listed, the auction's in three weeks.
You'll take that conversation in quite a different direction because they won't have had a lot of feedback from the market, so then I'd probably dig into what is it that the seller wants in terms of price.
Whereas if it's been to auction, there's no bids, we're now priced by negotiation, I'm probably going to dig a little deeper into, well, what feedback have you had from the market?And where do other people think the market's at?
I think that's a really strong opening question because it'll tell you a lot.
I think for something that's been on the market for a while, particularly if it has been passed in an auction as well, you want to know what offers the seller has had.
So let's say it got passed in an auction and then there've been some after auction offers made, which is very common, right?You want to know this because you want to know, firstly, how realistic the seller is and what they're not going to accept.
Because if your budget's a million bucks, for example, and there have been offers at 1.1 million dollars and the sellers turn them down, they're probably not going to accept your offer at a million dollars, right?
You're probably just going to waste your time and theirs making that offer.There may be a case where they turn down a 1.1 offer, And now they regret that.
So I've had a lot of instances where I've spoken to an agent and they've said, oh, they got an offer at 1.1 or whatever the number is, and they really should have taken that.They regret that now.
And then I've managed to get it for slightly lower than that or close to that number.
Yeah, there was a property that we've talked about previously on the show that I was looking at, and I think
The seller got offered 1.75 mil, and then ended up selling it some like six months later for 1.63, and they really do regret not taking that higher offer.
The other interesting one, I was looking at a property over the weekend, it's out of my price range, but they got offered around 2.6 million for it, and probably a month later, they are willing to take that 2.6 mil.
And the problem is once you've had that offer, it's really hard to go down from that.
And actually that kind of leads into another really good question that you've talked about on the podcast before.
Which is asking the agent, well, why is the vendor selling?Now, this is really interesting because everyone's got their own reason for selling.It could be that they've got an expanding family or they're moving cities, they've got a new job.
might be that they need money or there's been a death or a divorce, there's a whole lot of different reasons.But what you're trying to understand is what the seller might care about other than price.Because yeah, price is really important.
But you know, you might have an offer that's maybe not there when it comes to the number that they want, but you can offer a really quick settlement.So that might make your offer way more attractive because, hey, yeah, I know you wanted $1.1 million.
I've made an offer at $1 million, but I can settle next week if that's of interest to you.And I know that there have been cases where people take that offer.It's a nice, clean, easy offer. Or another example is maybe it's a longer settlement.
Maybe they're looking to build a house for themselves.
Now, they're wanting to sell their property now, but I could say, OK, well, I'll buy it from you at $1 million, but I'm going to rent it to you for $500 a week for the next 12 months while you build your house. Okay, that's an interesting one.
And I think this is really important because if you can get behind the motivation, you can probably actually get a better deal.
I'll tell you about that expensive property I just tell you about, that's 2.6 mil.I was like, well, why is it that they're willing to accept 2.6 now, whereas they turned it down previously?
And the agent said, well, they've now found a house that they want to move into.
I knew you were going to say that.
So whereas before, they're like, we'll list our house, then we'll start looking.And you know how it goes, Andrew.By the time you start looking, you fall in love with something else.
Now you're like, oh, maybe we can accept that 2.6 if it means we can get out of this house and move into that dream house.And then the follow-up question is, well, where are they at with that property?Have they got it under contract?
Are they unconditional?Then you're trying to understand how Like if they're locked into that new house they want to go into, then they really need to sell.Now you can, you can negotiate pretty, pretty hard.
I saw dollar signs light up in your eyes, just the info.Oh, I mean, that specific house is too expensive for me.I don't want to spend that sort of money and I can't spend that sort of money, but it gives you a really good sense.
I will say that just coming back to the what offers have they turned down. I really love that question because it really does show you, A, what do other people think the property's worth, but also what is the vendor willing to walk away from.
Sometimes, and I've had this happen to me, the agent will say, well that's confidential, we don't share that information.To which I would follow up that question with, but how am I supposed to know whether my offer is any good or not?
At which point they go, oh yes, that is a very good point.So help me out.Help me figure out whether my offer's any good or not.Why are you rolling your eyes at the entry?No, no, just because you're such a spin master.
Well, there is a really good example.Asking price of 2.4 mil.The agent didn't want to tell me what it was.So that exact thing happened.Well, how am I supposed to know whether my offer's good or not? And they go, oh, well, I think 2.3 would buy it.
And then her agent friend, who's also listing it with her, oh, I think 2.2, 2.2 would buy it.So now, you know, the asking price is 2.4, but we've knocked 200K off that.
Now, if I wanted it, it would go even lower because, you know, 2.2 is what you're telling me at the open home.
We all know I'll be able to get it less than that because you're quoting me a bit higher than what the vendor would actually be willing to accept.So that's kind of the conversation you might have.
The real estate dance, you do.
Yeah, I mean, there's always a bit of a dance with this.I always find it quite funny.I mean, some real estate agents, I mean, some are really good.
I've met some great listeners of the show who have been extremely helpful, but sometimes I find with real estate agents, they almost don't want to tell you what the price is.
Not all the time, but sometimes I'm like, but I know you've talked about it with the seller.Like you've agreed some sort of target price with the seller.
I get you're not going to tell me the lowest they're willing to take, but like, help me understand if I'm in the right ballpark or whether I'm dreaming.
Yeah, I think it's really important for everyone to be realistic as well.Like, the last thing you want to do is make an embarrassing low offer or get your heart set on a property that you just can't afford.
Because we know that the homes.co.nz estimates are just estimates.You know, roughly half of properties sell within 10% of the price you see listed online.And that kind of leads up to our next question.
Which is, at what price am I wasting the vendor's time?Which is a great question because it's just basically outright asking what's the lowest price that the vendor might accept for this, right?
But it's dressed up and with a sprinkling of ed in there.It sounds like a very disarming question, but basically you're saying, well, what's the lowest price?
Yeah, but I really like that because it seems to be at service of the real estate agent and at service of the seller.Oh, I don't want to waste your time.At what point am I wasting the time? You're going low anyway.
You would be a painful customer as an agent, wouldn't you?Oh, no, no, no.Because I try and come across as very nice.Yes, I know.You try and come across nice to me as well, but it doesn't work.
I was at an open home in Point Shevan, Auckland, and there was this great real estate agent, list of the show, Jackson T. And The question we asked was, do you have any examples of properties that have been renovated and sold in the area?
So if you're looking at an older property that you plan to renovate, whether it's something as an investment or your own home, you might want to see examples of properties in the area that have been renovated well, because it could give you a good idea about what you could potentially do.
And Jackson gave me a couple of examples of properties that have been flipped,
Now, if you, the really good thing about looking at properties that have been flipped is you can often, and he gave me an example, it was 7 Bungalow Avenue, I think it was, in Pointshare, and the property was bought for, I think, just under two mil.
People had spent about a mil on it.Big Reno.Big Reno.Big, nice Reno.But I don't have the money to do that sort of Reno.And they sold it for just over four mil.Wow.
Now the good thing about that is with flipped properties, you can often see the before photos online because it had only been sold, let's call it a year prior. So I can go online and I think it was on propertyvalue.co.nz.
I could see all of the old photos.I could see all of the new photos and that kind of gives you a sense of, okay, if I buy an older property and I build an extension, what sort of extension should I build?How could I do it?
And it'll just give you some ideas.Now, a really good agent. will be able to say, oh yeah, I know a couple of properties in the area that have been renovated.Here are some examples.
And if you can get a good agent like Jackson did, I was very impressed with that, that gives you time to go and do some more research to give yourself a few more options.
Number six is asking the agent what a good offer looks like for the vendor.And again, this comes down to, OK, it doesn't always just have to be about price.You want to find out what's actually motivating the vendor.Do they need to move quickly?
Again, those examples I gave before, do they want a long settlement?Do they want to rent the property for a while? Are there things that you can do to make your offer stand out?
One property that I bought once, I remember I managed to get a really good deal on, and the reason for that is because they'd had like five people have offers, all of them were first time buyers, they signed up, couldn't get financed, the deal crashed, or they signed up, they got something in the building inspection, it worried them, they cancelled the thing, and they were just so sick of it that I just made a really clean cash offer,
got it accepted.And it was like a significantly less, like 20% under what these other offers had been.
I think that's a really good example, actually, because it's not always, especially if you've had your property on the market, trying to sell it for a while, price starts to become less of an issue for you because you're like, I just want to get this thing sold now because you're thinking about it all of the time.
When am I going to get an offer?Is the offer going to go ahead?And then they start to say, look, I'd rather take an offer that's 50k less, but is more certain.Just to get it done. just to get it done so I can move on with my life.
Well, you think about, okay, if someone's selling a property, it's either a vacant rental property, which they got no rent coming in and they might have a mortgage still on it, so that's a bit of a problem, or they're selling their own house and probably they've figured out where they're going to next and this is holding them up with their future move.
It's very rare that someone's got the financial ability to go and buy a property and not have to worry about the property that they're selling.
Yeah, bridging finance is so expensive, and not everyone can get it either.And just the last one, and it's probably a smaller one, is have there been any building inspections?
And this is just to try and understand any issues with the property that are known to the agent, right?
So I think there was one that I was looking at, and there was an issue that scared a lot of first home buyers off, like it was about a retaining wall that was buckling. And so then the owners decided, yep, they're going to do something about that.
But if you could just tease out anything that's known about the property that's going to scare people off, it's just good to know about.Now, let me be very clear.
If the vendor has got a building inspection, and even if you get a copy of it, you can't rely on that, right?Because you are not the building inspector's client, because you haven't paid them any money.
The client of that building inspector is the person who currently owns the property.And so let's say there was something that was missed on that building inspection.
You can't go back later and say, hey, building inspector, you did me wrong, because they'd be like, you're not my client.I don't have any responsibility to you.I have responsibility to the person who paid me the money.
The person selling the property was my client.So there are two things you can do.Either you go and get your own building inspection done, or you could also contact the person who did that building inspection and get them to address the report to you.
It'll cost you a couple of hundred dollars to do this but then you're then their client and so you actually get some of those warranties in terms of they've got some responsibility to you because you're now their client.
But I think all up those are probably the seven top questions to ask at Open Homes to get a really good sense of the property, what it's likely to sell for, what mindset is the vendor currently in.
And I was talking to another really good agent, Nick from Ray White Epsom, listener of the show, which is why I mentioned him.
And he was saying to me that as a real estate agent, what you're really trying to do is marry up the expectations of the buyer and the expectations of the seller.
Now, if the seller has completely different expectations from the buyers, there is going to be no transaction, you're not going to be able to sell this house.
You've got to get it so there is some overlap between the seller's expectations and the buyer's expectations.And so what are you trying to do when you're asking these questions at open homes?
You're trying to understand the seller's expectations so you can see, are you in the right ballpark?
If the vendor's dreaming, there's probably not going to be a transaction because at some point there is nothing you can say to the agent to get them to change the seller's mind.
No, they are motivated to get the transaction done right, but sometimes the seller isn't going to be realistic.
There is a property that we were looking at, did I talk about it in this episode, that asking price of 2.25, it's probably 1.8, but the seller doesn't want to move.That's fine, that's all good, but there's just not going to be a transaction.
There's going to be no sale at that price.Nobody's going to pay it.They're dreaming, telling me he's dreaming. But using these questions, you can figure out what's their mindset, what have they been through.Right, let's wrap it up there.
But please don't forget to rate, review and subscribe to the podcast.It really does help us get the message out to more people.Thanks for listening to the Property Academy podcast.I'm your host, Tim McKnight.And I'm Andrew Nicholl.
We're going to be back here tomorrow with even more daily strategies, tactics and insights to help you get the most out of the New Zealand property market.Until next time.
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