Ask the real estate agent questions when viewing an investment property

Feb 8, 2021 | Property Investors

Essential Questions to Ask Your Real Estate Agent When Evaluating Investment Properties

Questions you should ask the real estate agent
This is what you’ll learn after reading this article.

  1. How asking the real estate agent the right questions can land you the perfect deal.
  2. How asking the right questions about the seller can bring you closer to striking a deal.
  3. How to get a better understanding of the seller and his motivations for selling without ever having spoken to him
  4. How asking the right questions about the property can assist you in making the right offer.
  5. Ask strategy-aligned questions for maximum impact on your goals.
  6. You’ll find out whether you are looking in the right area for your strategy.

Tips on Questions to Ask the real estate agent when viewing investment property

A property transaction requires a willing buyer and seller to make it happen. Do not attempt to undermine the seller as it is impossible to do so. Learn effective tactics from this article instead. The objective of this article is to help you close a deal by asking the right questions and analyzing the answers, on which you’ll base your offer on. This is a hugely helpful skill to learn, and once you have mastered this skill, you can never unlearn it.

Over and above viewing an investment property, asking the real estate agent the right questions is hugely important. Asking the right questions reveals insights into the area, buyers, sellers, local happenings, seller’s motivation, and your negotiation power.

Each real estate agent will share information based on their perception. Some real estate agents may be more forthcoming with information than others. The important thing is to ask as many questions as possible, to as many real estate agents as possible. You also need to read the situation. If a real estate agent seems uncomfortable answering your questions, don’t push it. However, some agents willingly share information. Capitalize on this opportunity.

Questions regarding the actual property

Essential Questions to Ask Your Real Estate Agent When Evaluating Investment Properties

1. Why is the owner selling?

The answer to this question will let you know to what degree you can negotiate on the property. If the seller states finance, relocation, divorce, death, and downsizing for retirement as reasons, they’re motivated to sell and will seriously consider most offers. Having this information will give you huge negotiation power.

2. Does the seller live in the property or is it an investment property?

Discover why the seller is divesting their investment property to make an informed decision. An investor’s decision to withdraw does not negate the investment’s value. The answer to this question could be negative or positive. The seller may change their investment strategy and allocate the money towards another investment opportunity. This does not mean it is a bad investment.

They may grow weary of managing tenants. This does not mean that all the tenants in the area are bad. The owner might not have been very good at managing his tenants.

Consider reconsidering the property offer if issues such as crime, noise, or a high population of young individuals arise. Why would a real estate agent share such information? The truth is, (without being disrespectful to real estate agents) very often some real estate agents do not realize what they are sharing. I’ve had so many real estate agents that were so forthcoming with information.

The owner likely flipped or invested heavily in the newly renovated property, aiming for maximum returns when selling it. You’ll know that if this is the case, you will probably not have much room to negotiate on the property.

3. Is the seller negatable on the asking price?

The answer to this question will tell you a lot about how you can move forward. If the seller is negotiable, you can immediately sense an urgency in the property’s sale. If the answer is “no, the seller is not very negotiable,” it indicates the seller’s lack of urgency to sell and willingness to keep the property until satisfied with the desired price. Avoid investing excessive time in a property if the asking price exceeds your prepared offer. Act wisely. Having said that, if the deal makes sense to you, make your offer. You never know.

Key Inquiries to Make to Your Real Estate Agent During Property Viewings for Investment Purposes

4. How long has the property been on the market?

If the property has just been listed, chances are the seller will not consider an exceptionally low offer. They would probably want to see what other interest he can get on the property. If a property has been on the market for a few months, the seller and agent may become desperate to sell. The longer a property has been on the market, the more desperate the seller is to sell. 

5. Has there been any other offers on this property?

If there have been other offers, you can find out why those offers have not materialized into a sale. Buyers may have faced finance rejection, or sellers may have declined low offers. The seller may now be disappointed if previous buyers didn’t secure financing as they had hoped. Even with a slightly lower offer, they might seriously consider your proposal, given their past disappointments.

If the seller rejected the low offer, you can discover the specific amount of the offer. You can now make an even lower offer on that property. You’re sowing doubt about the property’s value, questioning if it matches the seller’s expectations. They might now consider your offer out of fear that the next offer might be even lower.

6. Is the seller buying elsewhere? Has he/she made an offer on another property yet?

The seller’s urgent need to sell this property may be due to fear of losing the property for which they made an offer.

Important Queries to Pose to Your Real Estate Agent When Assessing Potential Investment Properties

7. Are there any major defects to the property that I should be aware of?

By law, the real estate agent and the seller have to declare all defects to the property. If you don’t ask, the seller may withhold important information. Be proactive and get the answers you need. You can ask for a defects list. This is a list of all the defects to the property that the seller is aware of.

Once you have this list, you can use it as a bargaining tool. Identify the total cost to fix defects on the declaration list and negotiate it off the asking price.

8. Can I have a copy of the Lightstone report on the property?  

Get the comprehensive Lightstone property report that reveals the legal owner of the property, purchase details, and outstanding balance. Discover the exact year the seller acquired the property and the price paid. By obtaining this report, you can gauge the remaining debt owed by the seller, unless refinancing has occurred. While real estate agents often don’t provide the Lightstone report automatically, don’t hesitate to request it. It’s their responsibility to furnish buyers with crucial information for informed decisions. Alternatively, you can personally access the report at www.lightstoneproperty.co.za for a nominal fee of approximately R100. However, acquiring it through a real estate agent is more convenient, as they should already possess it. Optimize your property transaction with the indispensable Lightstone report.

Questions depend on your strategy.

Important Queries to Pose to Your Real Estate Agent When Assessing Potential Investment Properties

9. Who typically buys properties in this area and what are they looking for in a home? AND If I had to bring you a property in the area that would sell quickly what would it be?

If you’re aiming to buy a property below market value, renovate it, and sell it for a profit, understanding your target buyers is crucial. Speed is key in this strategy, as emphasized in our article on ‘Successful Property Flipping’. Ensure you purchase a property that is in demand in the area and will sell quickly. Identify who typically buys in the area and what they seek. If the neighborhood boasts reputable schools and attracts family-oriented buyers, selling a one-bedroom apartment may take longer. Conversely, if it’s a lively party district, young professionals and investors are likely your target audience. Avoid flipping to another investor, as they too seek bargains and won’t pay your desired price. Knowing your buyers is essential to maximize your profits in this strategy.

10. Who typically rents properties in this area and what are they looking for? What type of property would rent out quickly if I had to bring you one?

Ensure you purchase a rental property popular among tenants to maximize investment returns. Discover the tenant profile in the area: young professionals, families, students, etc. Find out who resides there! This will help you assess if you’re finding the right properties that match your preferences.

 

Questions regarding the area

Essential Questions to Ask Your Real Estate Agent When Evaluating Investment Properties

  1. What is the crime like in the area?
  2. Which armed response company dominates the local area in terms of visibility?
  3. Is it a quiet or noisy area?
  4. Tell me about the schools in the area. Are there pre-schools in the area? 
  5. Are there any hospitals, shopping centers, or malls in and around the area?
  6. Where are the bus and taxi routes?
  7. Does this area have a good part and a bad part?

These questions will give you a particularly good idea of the area/suburb. And what’s more, every real estate agent that you speak to will probably share different information about the property. You’ll sense if the real estate agent feels uncomfortable answering, even if they’re not very forthcoming.

These questions equip you to become an area expert, negotiate effectively, close deals, and make informed decisions.

It is especially important that you remain indifferent during these conversations with the real estate agents. The minute the real estate agents know what you are thinking you hand over all your negotiation power. Be friendly, and build rapport, but never play with an open hand.

Happy investing.
Last updated: 12 March 2023

 

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