{"id":4799,"date":"2015-06-21T01:00:11","date_gmt":"2015-06-20T15:00:11","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=4799"},"modified":"2015-06-21T01:00:11","modified_gmt":"2015-06-20T15:00:11","slug":"rules-of-engagement","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/rules-of-engagement\/","title":{"rendered":"Rules of Engagement – Michael Yardney"},"content":{"rendered":"

 
\nIn todays’ show\u00a0Michael Yardney<\/a><\/strong>,\u00a0from Metropole Property Strategists, has some great advice on how to avoid paying too much when you buy. He will explain the benefits of employing \u2018knowledge detachment\u2019.
\n <\/p>\n

Transcript:<\/h4>\n

Kevin:\u00a0<\/b> When a purchaser gets involved in negotiating for a property they\u2019ve fallen in love with, emotions quite often can rule logic. It\u2019s very easy to get caught up in the moment and end up paying more than perhaps you should do.
\nAs either a home buyer or a property investor, it\u2019s critical not to get carried away with your emotions but instead approach the negotiation process from a position of knowledge detachment.
\nThat\u2019s according to Michael Yardney from Metropole Property Strategists who joins us. Hi, Michael.
\nMichael:\u00a0<\/b> Hello, Kevin.
\nKevin:\u00a0<\/b> Michael, explain a little bit more about that, because it\u2019s one of the areas where a lot of property investors can go wrong.
\nMichael:\u00a0<\/b> Kevin, unfortunately, the market is creating a lot of emotion at the moment \u2013 the old emotions of fear and greed: fear of missing out, greed of wanting to get in and make the market work for you.
\nNow, there\u2019s nothing wrong with either being fearful or being greedy; the question is, though, am I allowing that to rule the way I\u2019m negotiating, and am I making it work for me or against me?
\nKevin:\u00a0<\/b> I sometimes wonder, too, Michael, with the growth of the number of auctions right around Australia whether this is becoming even more critical.
\nMichael:\u00a0<\/b> It is, very much so. Only today, we were in the situation where we were forced to make an offer before auction. In most cases, if I was a vendor or if I was an agent, I would be suggesting the vendor go to auction and see what the marketplace is going to offer. because in our strong environment at the moment they\u2019re getting some very good offers at auction.
\nBut sometimes for personal circumstances, the vendor doesn\u2019t want to take that risk or want to pay for the marketing campaign, so they start a campaign, and then agents are currently moving to having these little private auctions \u2013 these Dutch auctions, these blind auctions, these one-off bids. It actually puts you in a very different negotiating position that can be as nerve-wracking and scary for a buyer as an auction.
\nKevin:\u00a0<\/b> Michael, help us. What are some of the rules of engagement?
\nMichael:\u00a0<\/b> The first thing you have to do is do your homework first. Rather than flying blind, make sure you understand that if it\u2019s a pre-auction offer, depending upon how soon before the auction it is, it\u2019s going to be an unconditional sale, as well. Make sure you\u2019ve done all you\u2019re due diligence. Make sure your solicitor has checked the contract. Make sure you understand what the property is worth. The best weapon coming into negotiation is knowledge, having the knowledge of the marketplace. Be armed with that.
\nI guess the next thing is be prepared in this strong market to lose because, unfortunately, for every auction currently there are three or four losers. That doesn\u2019t mean you\u2019ve lost in the long-term; it means this property is just not going to be the one for you, and you have to move on to another one.
\nKevin:\u00a0<\/b> Of course, good agents will play on that fear of loss.
\nMichael:\u00a0<\/b> Of course, they will. They\u2019re good readers of emotions. That\u2019s the reason why a lot of people employ buyer\u2019s agents like the team at Metropole to help a little of that emotion out. Agents are taught how to negotiate. They\u2019re taught to read your emotions. Most buyers don\u2019t understand how to handle that properly.
\nOne of the things I really don\u2019t like is this concept of a Dutch auction where the agent pitches two or more potential purchases into making, I guess, what are blind bids. That\u2019s exactly the position we\u2019re finding ourselves in as we speak. I know you know that just before I got on the line with you we were negotiating with an agent who is saying, \u201cPut in an offer,\u201d but he won\u2019t tell us what the other offers are.
\nOne of the ways they\u2019re doing that sometimes is saying, \u201cThat\u2019s it. You have one chance, one bid in a sealed envelope. They\u2019re going to be opened up at 4:00 this afternoon, and the best bid wins.\u201d I think I\u2019d rather be at an open auction where I can see what the other people are doing and the fact, Kevin, that there are other people. You don\u2019t always know that, do you?
\nKevin:\u00a0<\/b> No you don\u2019t, Michael. It\u2019s a difficult situation. What do you do in that position? You obviously have to put your best foot forward if you want it, but then as you said earlier you\u2019ve got to be prepared to lose.
\nMichael:\u00a0<\/b> Exactly right. I think when that situation occurs, you have to read the agent and see if it\u2019s true. You have to also make sure that he doesn\u2019t use your offer to push somebody else higher.
\nThat, again, is where it\u2019s sometimes worth having a buyer\u2019s agent on your side representing you, because sometimes they go backward and forward a number of times and other times they say, \u201cNo. Just once only.\u201d Then that\u2019s the time when you actually do have to put your best offer forward, accepting the fact that if you got it at that price, you would be happy to accept it and if not you\u2019ll go on.
\nSomething else really interesting happened this weekend. Can I share it with you?
\nKevin:\u00a0<\/b> Please.
\nMichael:\u00a0<\/b> One of our buyer\u2019s agents was looking at a property, and he knows the selling agent was asking somebody to get it on the market before auction during that marketing campaign. Interestingly, he got an SMS \u2013 which I assume all the other people interested got \u2013 saying, \u201cThe property is now on the market. We\u2019re prepared to sell before auction, and the offer we received was\u2026\u201d and they actually even disclosed it. We were really happy we weren\u2019t in the position that we were the ones who made it. I thought that was very wrong.
\nKevin:\u00a0<\/b> That seems very unprofessional, I would have thought, Michael.
\nMichael:\u00a0<\/b> That\u2019s the way we felt, as well, and we\u2019re happy that we weren\u2019t the ones who were called out that way. I bet the person who made the offer didn\u2019t know that they were being used to get us to make a higher offer. How would they feel if they found out?
\nKevin:\u00a0<\/b> They would feel terrible. As we can see there, Michael, there is certainly a lot of emotion involved. It\u2019s always best if you negotiating to get someone on your side. Think about using a buyer\u2019s agent \u2013 people like Metropole Property Strategists.
\nMy guest has been Michael Yardney from that wonderful organization. Michael, thanks again for your time.
\nMichael:\u00a0<\/b> My pleasure, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

  In todays’ show\u00a0Michael Yardney,\u00a0from Metropole Property Strategists, has some great advice on how to avoid paying too much when you buy. He will explain the benefits of employing \u2018knowledge detachment\u2019.   Transcript: Kevin:\u00a0 When a purchaser gets involved in negotiating for a property they\u2019ve…<\/p>\n","protected":false},"author":176692471,"featured_media":4802,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[10,13,25],"tags":[101],"class_list":["post-4799","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-latest-story","category-sponsored-channels","tag-podcast"],"yoast_head":"\nRules of Engagement - Michael Yardney - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/rules-of-engagement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rules of Engagement - Michael Yardney - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  In todays’ show\u00a0Michael Yardney,\u00a0from Metropole Property Strategists, has some great advice on how to avoid paying too much when you buy. 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