CAN YOU COLD-CALL HOMEOWNERS TO GET CHEAP INVESTMENT PROPERTIES?
Webinar participant, Jonathan, asks, “Do you think cold-calling homeowners, asking if they want to sell their house is a good buying strategy?” Many real estate agents cold-call homeowners in order to source new properties, but is this worth the while of the property investor? Nathan shares his view.
THE ROLE OF THE REAL ESTATE AGENT
Nathan says, he once engaged in cold-calling homeowners, but, not as an investor. At the age of 17, Nathan did a short stint as a real estate agent – before he realized how much bull-shit he would have to go through by working in the profession. He says, he admires real estate agents who go the extra mile with determination and professionalism in order to get the best results for clients.
He says, the real estate agent acts as a buffer between the buyer, who wants to buy at the lowest price, and the seller, who wants to sell at the highest price. He says, he has encountered many sellers who decided to go it alone in order to save money on agents’ fees. A lot of these sellers, he says, have unrealistic expectations on what they can achieve price-wise, they want to get the biggest gain with the lowest cost. They also allow limited space for negotiating.
SOURCING PROPERTIES UNDER MARKET VALUE
It is unlikely that you will be able to negotiate a competitive price by cold-calling homeowners. Most homeowners who get called out of the blue won’t consider selling their home unless they can sell it for a phenomenal price. Put yourself in their situation – if a stranger called you on your phone and asked you to consider selling your home, would you decide to sell it to them under market value?
In fact, real estate agents who are successful in cold-calling get their numbers up by making the home-owner believe they will make a killing by selling their home. Would you, as an investor, be able to do this truthfully – while still making it worth your while?
As an investor, you should only be interested in properties that you can buy under market value. It is more likely you will get something for less than its worth by negotiating with a selling agent who is trying to off-load a property that has been on the market for a long time.
Have you ever cold-called home-owners? Please share your experiences in the comments section below.