552 | How to Talk to Agents (Without Losing Your Leverage When Negotiating)

Alright folks, welcome back to the property catch podcast and we've got an amazing episode for you today folks because it's a very tactical day because we are talking all about property negotiations and how to get into the market and why are we talking about that, Ben. Right, we're talking about that because the market is moving. Sentiment is now in favor of an active property market so you need to know how to negotiate. You need to know folks, let's rip into the show. Welcome to the property catch where each week you get to listen to two of Australia's leading property and money experts. Bryce Holderway, co-host of location location, location Australia on Foxtale's lifestyle channel and co-host of escape from the city on the ABC and Ben Kingsley, chair of property investors, council of Australia and a back-to-back winner of the property investment advisor of the year award and both the partners of the multi award winning in power wealth, co-creators of more the free lifestyle design app as well as best selling authors of the armchair guide to property invested and make money simple again. Stay tuned as they renew the insider's guide to property, finance and money management. Welcome back to the property catch podcast and welcome back to YouTube and you're sitting in that you've got that glow in your look in your face there, is that got anything to do with the Collingwood Football Club? Look before we get to the glow about the pies, are you okay? It's obviously winter time, got a little bit of a, we're going to be okay for the show. I think we're all just occasional sort of cough along the way but no, we'll make a work but tell you what, we'll deflect you from your sort of cheshier cat look on your face. I just want to make sure you're okay before we move on, you know, like you're a trooper, good to have you along for the ride, listen, look, yes, pie is going okay, keeping a lid on it though. Alright, let's keep a lid on it. Well, it's just going beautifully to give you some other chance to just put the bed on the last, that's true too, and I'm sure that will give you plenty of, plenty of stuff. It's a bit miserable, free-o supporter mode, so I, you'd like to think that I'll make joy in seeing people who have a win but sometimes you just got to see joy in people having to lose, so. So, guys, before we get into the exciting show, I just want to quickly remind everyone about the petition that Pickert is currently got running and that is around the New South Wales rental reforms. So there's been some significant rental reforms around no grounds evictions and some other introduced reforms, some of them are okay, but we do think that they go too far, so if you go to the PIPPA website, link will be in the show notes, so pick up website, link will be in the show notes. Just make sure you read and get informed about what's happening there, and if you have strong views like I do around how this policy is going to be detrimental to renters, then please sign a petition, we'd love to have you along for the ride, it's, there's important reforms, we need to get the balance right and at the moment, the balance isn't right. But indeed, strong views, you keep them, you keep them from us, what do you, what do you do? As the chair of Pickert, I represent 2.2 million property investors on behalf of, we've got to make sure, you know, and there's obviously, look, we understand there's a housing crisis at the moment, but you know, punishing the private rental accommodation providers is not the way to go. It's just, it's actually, you know, sort of dangerous, and it's, it's, yeah, it's just really difficult to be able to run your private rental accommodation business in some of our major cities, and that's going to have an impact on the, on those economies and the people and, you know, basically how, how society operates in those centres, if you don't get the billions of dollars in investment that you need, because if it doesn't come from private investment, it's going to come from government, which means high taxes for everyone. So, it's, it's not a good thing. No. So, I've been, and if you listen to this as it comes out, Thursday, Friday, Saturday, Sunday or even Monday, you and I are appearing at the, the Dimix Black ship store on George Street and Sydney on Tuesday, the 1st of July, shout out to our podcast listeners. We would love to meet you. We just checked. There's only a handful of tickets left. So, if you want to be someone who grabs one of those last few, please reach out and go to the propertycatch.com.au/dimix, and that's D-Y-M-O-C-K-S, or my sounds like I'm singing the Mickey Mouse song there. The propertycatch.com.au/dimix, so we'd love to see you there, so come and check that out. So, Ben and I just talked to a microphone every week. We look at each other, but apart from that, we don't know who we're talking to. So, it'd be nice to, it'd be nice to meet some of the crew, Ben. It'd be nice to meet some of the community crew. So, Bryce, obviously, I'm really excited about the topic today around negotiating skills, because it's clear in terms of looking at the data now. We're starting to see the dial move on sentiment, especially here in Melbourne. So we've got a combination of factors coming in. We've got a lot of interstate buyers looking at affordability. So, even if the fundamentals don't necessarily stack up around the economic activity that's happening down here, you can't underestimate the power of incentive and sentiment as part of that. So, that sentiment shift is now, then we'll start being betrayed through media. We're seeing the clearance rate move up. We're seeing interest rates forecast to come down further. So, we do have a situation here in Melbourne where I feel like it's not a balanced market, but it's now becoming more in favour of a sellers market than a buyers market. And we're seeing that certainly in the lower end of the market where days on market, stock on market. And now we're also starting the seed in the clearance rate. And in Sydney, we're also seeing a similar type of thing. But Sydney is a blend of, obviously, you've got the very high end of the market, and then you've got the mid-end and the lower end. And so, from that point of view, it's really important to get a sense of where that broader sentiment is at. And it does feel like the sentiment's moving towards a more active market. And we would then expect off the back of that price movements to accelerate a little bit. So, and we've warned people, haven't we, Bryce, about getting in before the title wave? Now, well, it feels like the rising tide is starting to come in. And so, if this episode is really a timely episode for those people who have to get out there and negotiate, and now they're going to have to negotiate in probably a more competitive market, then they would have had to negotiate in six months ago. Yeah, history doesn't repeat itself, but people repeat history like, you and I will talk to, we're blue in the face for the next 30 years that people should act when the sentiment is not going for them, but they won't. So, some will, some won't. Yep, the smart ones do. And then the ones who then learn to be smart in the future, because it does feel like I want to have, that's that human psychology and that behavioural psychology, is I want to have evidence first. I want to, I want to, you know, I don't, because I could get it wrong and the market could not move. So, so now they all see the evidence and all of a sudden, you know, it just turns on. Yeah. And, you know, I was at an auction on the weekend and it just took like, you know, there was 200 people there. Yeah. So, it's just like, whoa, I haven't seen a crowd like that for a long time. So, it does feel like that sentiment is changing and, and so it's going to make for a more active market, especially here in Melbourne over the next probably 12 to 18 months. Well, picked up in and said that's exactly what we're talking about today. People taking action, getting into the marketplace and so they're going to have to negotiate on property and that's exactly what we're talking about today. Yeah. Love it. Hey, my mindset, minute theme today, Ben, is clearly this week, the MBA finals were decided unfortunately through injury more than anything. This is my story anyway, poor hell of a button has done a calf, but I came across this, Ben, I thought it was interesting. I think it's helpful in the context of the message that you and I are trying to do on the podcast, but Alan Iverson was, was massive in the MBA just after, you know, at the very end of the Jordan era and then just after, but he was huge playing for the 76s, but he will get paid $16 million on his 50th birthday and hasn't been in the MBA for some time. But here's how savvy management saved his wealth, because Alan made over 150 million. Yes, 150 million during his MBA career and spent a lot of it, which is not unusual. So in 2012, he was reportedly struggling with money, he was divorced in debt, caught up, showed unpaid jewelry bills, but when he signed the lifetime deal with Reebok in 2001 and there's actually a series on Reebok with him and his shack at the moment in 2001, a savvy plan was put in place thanks in part to his wife at the time. So it became not only a lifetime deal, but also long term protection. So instead of giving him all the money that he was due for that endorsement up front, they created an annual annuity of $800,000 for life and a $32 million trust pay out locked until he turned 55. And as that $32 million, well, it was 32 million, but his ex-wife was awarded half in the divorce agreement. So her amount is locked away until that time as well. So why admittedly struggling with money management in his 30s and 40s, his long term wealth was growing in the background. So on the 7th of June 2030, AI, Alan Iverson will turn 55 and like clockwork, he'll gain access to his half of that 32 million, which will be 16 million. This wasn't like it was planning, it proves one thing. Don't live for the now, invest for your future self. The smartest money move you'll ever make might be the ones you can't touch yet. So I thought about that then because it's something that we're trying to do is to get people to make those sacrifices now for a day out down the track. Whereas, everyone is involved in the Alan Iverson plan in Australia and some port because money is being put away on your behalf into the superannuation skin you can't touch until older, but obviously we want to supplement that and the message that we have on this podcast is that you build a property portfolio. Now, in fact, you build a portfolio of assets that will ultimately give you a passive income. Our bias is property, but we just ultimately want you to build assets that pay you an income that is in excess of your expenses, then you will have the definition of wealth, which means an infinite ability to pay your expenses over a lifetime because the money that's coming in passively, not actively, is doing that for you. So nice little story there from Alan Iverson Ben, because there is so many stories of these incredibly talented sportsmen with big money who live like rock stars in their 20s and 30s and then later on have no money. So thankfully, and it looks in part to Alan Iverson's ex-wife, that they put in a new-ity employee and put some money down the track. So I mean, it's a good story. Not all of us are going to be 1% elite sportsmen in the world or 0.0001% of elite sportsmen. So we're trying to help everyday Australians who are aspiring to do this and our mission is, we want to help 10,000 households in terms of, and that's obviously through more platform and through the work that we do. So and hopefully it's tens of thousands who are also listening in that are also getting the value of the education and content that we're putting forward to just ask the question of you to take action, you know, be informed and take action. And I think that's a perfect little segue into negotiations because you're going to have to negotiate at some point and make decisions and take action on those decisions as well. So yeah, nice little segue into negotiation, tactics, price. Hey folks, Ben here. I hope you're enjoying the podcast. Now, if you want to take your property, finance and money knowledge, even further, check out the new mind knowledge in more. We've packed mind knowledge with over 120 plus free resources from free reports to educational video series, to fact sheets, on demand courses and heaps more. Get started today at theprobablycouch.com.au/myknowledge. There, definitely Ben, you are negotiating all day every day. If it's with your toddler, if it's with your work, negotiating for a car space. And in for a lot of people this weekend, they'll be negotiating for real estate. So we wanted to talk to this point, give people some tactics and strategies and some skills for them to think about as they ultimately, at the end of the day, we're trying to get people to build a plan. But if you don't take action and execute on the property purchase, well, then it's all been for nothing. So we need to be able to equip you with these skills to help you in at various parts of our career. And we've had to use some or all of these negotiation tactics as we go along. But most people walk into a negotiation a little bit kind of on the defense right, thinking it's a fight. But what if it's actually a dance that you're entering into? Because negotiation, you know, when we see it on movies and we see it in its peak sort of excitement is where there's a winner takes all approach, but a drama, the drama. But ultimately, it's not just about being aggressive or manipulative. It's about jockeying for information, jockeying for position, and also jockeying for emotional control. So we're going to talk to some of those points today. But first part we want to do, Ben, is we want to get our audience to have a mindset of a great negotiator. Before we even step up to the plate, some of the things that we want to make sure that we have in our psyche is that it's a conversation, not a confrontation. So that was part of their intro and it's largely about two or more, but you just think about two people talking at each other or is it two people exchanging information with each other? Yeah, that's right, Bryce. I mean, ultimately we've got to think about the parties that are involved in the transaction. So we've got the Vendor or Vendors. We've got the selling agent, who's the sort of intermediary. And then obviously on our side, we've got the buy-up or buy-offs. And each party has a role to play in terms of how that sets up. But the intermediary, the agent that's hopefully facilitating the exchange, there's a lot associated to that, isn't there, Bryce? There is. Part of that is understanding the agent's motivation. This is the greatest part of the mindset of a great negotiator because you're not just negotiating with a person, you're negotiating with their incentives. And that's super important to know. So there's a couple of incentives that we can help you with. Number one is you're negotiating with their commission. At the end of the day, there are some wonderful real estate agents out there. And there's a heap of them. But they ultimately are serving an agency role in order for them to achieve the outcome that they're wanting to achieve. Now there are plenty of agents who love the thrill of the chase. There are plenty of agents who love the art and the craft of auctioneering and negotiating and real estate. But I haven't met too many agents Ben who would do it without getting paid. So it's just a part of their world. And if you're sooner, you realise that you're dealing with three major motivations from a real estate agent. Number one is their commission that they get paid. Number two is quite often quick turn over because if you think about how an agent works, Ben, I know you know this, but just for the point of the exercise, if you think about how an agent works, they, the more transactions that they can get done, the more money they will be able to make. Now at the end of the day, there's only a certain amount of time in a week. And agents have what's called an ideal week. And quite often on Monday, they make calls on Tuesday, they do caravans to look at their properties on Wednesdays and Thursdays. They do inspections on Fridays. They prep for Saturday and then Saturday is game day. And for some of the lucky ones, they have Sunday off. So they have to be really struck, the best of them have to be really structured with their time so that they know when they're going to do listing presentations, when they're going to do callbacks, when they're going to do negotiations, when they're going to do opens all the time. So if you understand that if they have two or more deals running at any one time, plus all of the other stuff that's going on for them, turn over is important to them. Being able to actually get the deal done is just as important to them as getting a great outcome for their clients. So that's the second motivation is first one's commission. And the second one is turn over, making sure the deals turn over so they can move on for the hunt and the kill on the next one. And the third thing, Ben, and this is something that you should never, ever, ever lose sight of. It's their results, their brand, the outcomes, because what they want to do is get today's deal done and then run up to the top of the mountain, Ben, as far up the mountain as they can go and they go, tada, tada, tada. Let me tell you what I just did, because that is the nature of how they get their next gig. And I think you've, I summarise that in terms of that's why a selling agent will talk to their vendors about a marketing campaign. And that marketing campaign will have a period of time to build up that motivation, but then hopefully at the back end of it, build up that scarcity and that time value. So to Bryce's point, they can turn over those particular things. They don't want to hold on to stock for a longer period of time, because the longer that they have to work for their money, the less money that they potentially get a chance to make. I'm in at the end of the day, they've got a finite time like the rest of us. So they are trying to organise campaigns into maybe four or six weeks to try and get a result inside that period, because they can get a result sooner that's satisfactory to their vendor. They'll push for that as well. So Bryce's point, they can get to that turnover. And then off the back of that, that turnover builds reputation and that reputation leads trust. And obviously that's the cycle that they're in. So I think that sets us up nightly in terms of understanding the middle, the middle person who's basically going to be the conduit between the vendors and us as buyers. They're very, very powerful and they have information asymmetry where they know the vendor, they know the motivation of the vendor, they know all the other buyers that it is not fair. If life was fair, there'd be no food chain been. So again, the mindset of a great negotiator is understanding that asymmetry. And so therefore if we go back to the first part of this framing the negotiation as a conversation, not a confrontation, your job as a negotiator is to try and release as much information through your skill and interaction with the agent and the circumstances that are presented to you. So that you are then in a position to jockey for the best position for you to get that property, which follow a lot of people negotiating then they think it's all about price, but it's not. It's not. And one of the big superpowers is the power of silence and patience. So can you explain and unpack that for us? Yeah, because words could be a weapon, but silence could be more powerful too, right? So if you don't do what most people want to do and fill the space, you can stop yourself negotiating against yourself or you could stop saying little innocent statements like, "Oh, my offer at the moment is 820,000." All the agent heard was at the moment. That's all I had at the moment. So it's being aware that it's not what you say, it's how you say it. And sometimes it's the little things that you say that you think don't have a lot of meaning. So being a great negotiator means understanding the power of silence and the power of patience because desperation kills leverage. And the amount of times that I've had to overcome the urge to ring an agent and just check in to see how it's going, oh my gosh, like scores and scores and scores of time, because you know, as soon as you do, if you're done or you prep work up the ground, you put your offer in, you know, all the comps, you know where you need to be, the part of that is not sending a, you know, a something wrong message to the agent that you really want it, right. So patience is actually an incredible strategy. And for people who are negotiating not very often, it's one thing to say, it's another thing to be able to execute on. It's very, very challenging to do. Yeah, it is. And I think, you know, where to sometimes you see some cues in this is if the agent is proactively following you up. So, so if there's, you know, following you up, now, good agent should follow you up anyway in terms of that. But as the campaign moves longer in its, in its timeline, the more that they're following you up is also a sign that potentially there's not a lot of interest in the property. Now, you know, sentiment is definitely changing into the positive side. And we think property values are going to move up. So that's, that's something we've got to consider. They'll chase you when the market is a little bit softer, but if the market's moving in a lot of respects, they're just trying to find stock because they're really confident that they can turn it over. Very, very true, Ben. So, so we've got to get our mind set right before we even get into the game. Now, before you start negotiation, Ben, there's a few things we should speak about. Couple of these are in your wheelhouse. Let's, let's kick it off with the first one. Yeah, so before we even speak to the agent, we need to get our finances organised, right? So one of the, you know, most common ways in which you can put a strong offer in front of a potential vendor is to basically have your pre-approval in place. So we want you to speak to your investment savvy broker, you know, and get that organised. It really is a sign that you are a serious buyer that in terms of that you can negotiate here and now, and off the back of that, you also should have done your homework around the money side of it, which is, no, your budget. So what is your budget? What's the, you know, what's the, the level that you can go to as part of that story? Now, the other part is to make sure that you've done your homework, Ben. That is a platitude. That is a bump, that is an upward sticker whenever it says you got to do your homework. So what does that actually mean? You need, you need to camp out, excuse me, you need to camp out on the sold tab, definitely on real estate.com, but if you're a new South Wales, you got to do it on domain particularly as well. You need to camp out on the sold tab, not the buy tab, not the rent tab on the sold tab, and you need to have spreadsheets that accompany that because you need to know what is actually sold two weeks ago, four weeks ago, six weeks ago, two months ago. And you need to be able to apply some sort of science and some art to it too because sometimes if you're in a very hot market, three months ago's data doesn't tell you anything, right? If you're in a normal market, it does tell you something. So you, you actually want to make sure that what you want actually does exist, right? So if you talk about your point before Ben, you said you established the budget, you want to know if that budget is actually going to buy you what you think you're going to buy. And the worst place to go and work that out is in the buy tab because there is no science in the buy tab. There are like quote ranges, there are like over quotas, there are, oh my gosh, that is the worst place to go. Yeah, it is. And I think it just sort of highlights a couple of things that I would always say, you know, my key takeaways in this area is always what land component am I getting and a lot of people miss that. They think about the dwelling and the, you know, the, it's age and how comfortable it looks. But I'm looking for land because that's what appreciates over the decades, not necessarily an improvement on it. And then obviously the property is it's going to be suitable if it's from investment point of view. Am I targeting the right target audience for that particular area, you know, to make sure that I have it gainfully rented out over the long period of time. Love it. So part of doing a homework is making sure that you've done your price research does it exist is your budget too low. Do I actually have enough money to be in this suburb that I really want to be in? We know that location does 80% of the heavy lifting. We know that it says location, location, location on purpose. But sometimes you just got to be real on actually, can you get what you want because you don't want to burn money on building a person solicitors and all that sort of stuff that comes with it. So, so what does do your homework means? It means doing your price research and camping out in the salt tap. It also means, and this is increasingly simple to do these days. But you need to know how long it's been on the market. If you don't know how long the property that you're looking for has been on the market, you are doing yourself a massive disservice. Remember, it's all about information asymmetry that's in the favor of the agent. You need to know what that looks like. If it's been on for a hundred, that's a different negotiation for something that's been on for three days. So, very, very important. Yeah, and I think also, again, with a changing marketplace, we're seeing more stock, get sold via the auction method as well. And so, it's important to what Bryce is saying, the days on market, and then what you also need to look at is the auction clearance rates. And the auction clearance rate is giving you an indication in real time in terms of the level of demand inside a market. And if there's more properties going to auction, you know that that market is on the move. As we mentioned earlier at the start of the show, we are definitely seeing this market sentiment shift that is occurring in our sort of more prominent markets, namely Melbourne at the moment as part of that particular story. So, days on market, as well as that sort of auction clearance rates, is going to be part of that research that you're doing to try and establish price and budget. Very good. I like that bend now. The skill of pre-negotiation is to try and work out what the vendor motivation is. Why are they selling bend? And easier said than done, because the agent is the guardian of that information. The really good ones hold really tight and the really bad ones let you know. But there are seven D's that come for vendor motivation. They are death, death/defaults, divorce, diamonds. We've borrowed this one from the yankspin, the diapers, slash knappies, and then downsizing, right? So which of these the vendor motivation is really, really important, because if you know what is driving their decision, it allows you to better frame up your offer that is distracted on price. Because we all assume it's all about price, but for a lot of people, it's not. I just spoke to a friend of mine who recently bought a property over in Perth, and the person who was selling was motivated by moving once, not twice, and they were building a house. So they just very easily said, okay, we really want this property, but we're not in a hurry. So we'll give you the length of settlement that you need to be able to verify once. However, you win on the conditions, I'm going to have a win on the price. So that's why we need to know what the vendor motivation is. And obviously, when Bryce went through those, there's also diplomas, or what he also referred to as downsizing. So a combination of things, the diploma idea there as a couple of things, obviously higher incomes, upgrading in prices, so the idea about getting education better working and basically moving up to your dream home or forever home. But the other side of it also is from a diploma point, the kids are leaving and then hence the downsizing part of that. But finally, there's a little bonus one in there that Bryce and I were talking about before the start of the show, and this is one of what I call directive. And unfortunately, we're seeing more of this come into play when we start talking about governments and regulators, with all of the red tape and all of the sort of special conditions and all of the challenges that they're making for property investors, those directives are actually having a negative impact in terms of some people. And so we're hearing lots of stories in the meter of people getting out of markets because they're fed up with the government and the regulators directives in terms of getting into that market. You know, there's we know over really the last 12 months, there's been over 26,000 properties just in Melbourne alone that have been sold down by investors, purely fed up with the way in which the regulation is down in this state. Wolf, you know anyone who could represent them, no, I won't go down that rule. So we're thinking about, okay, this is all pre-negotiations, right? So it is what the vendor motivation is and build rapport with the Asian earlier, right? Be the buyer that they want to work with, right? They have only got their time to sell, so be very, very mindful of that, be if you're doing all this prep work beforehand, be that buyer, right? And the final thing before starting negotiation is to in terms of doing your homework is know what your walk away price is and I've got a structure that can help you with that. This is wonderful. This structure. You want to have an X, Y and a Z price, right? And so these are important to work out as you are about to go into the negotiation. The X price is what you think the property would be a great price to get for, right? If I've got it for that price, that would be amazing. The Y price is probably more likely to be a fair price, okay, based on everything that's going on here, there's a bit of interest, there's nice streets, there's no facing backyard, chances are there's going to be a bit of competition. Actually here's the Y price that I think would be fair to get this and then the Z price then is actually the walk away price and here's the no regrets price because it's one thing to say, oh, wouldn't it be great to pick it up at that great price? It's another one to go, oh, that's a fair price. But the third one is the regretful price where you go, oh, let's pick a number. Let's say you were pre-proved for 900, it was the house of your dreams and you got cute and you stopped at 850 and someone else picked it up at 870 and you go, oh, I would have paid 870, that can be a lifetime of regret, particularly if the location does 870 have a lifting and those properties are up there and over very often. So the walk away price is if I paid a dollar more and this is largely for owner rocks because investors, there's always another one but I'm speaking largely to the owner occupies to be really clear about the Z walk away price, it's if they paid a dollar more they can have it and you've got to feel it in your spirit, it's like no, that's theirs, they got to have it. And so if you're very clear on your X, Y and Z price, that's going to help you enormously when you step up to the plate to be in the game. Now, we'd all love to get it for our X but sometimes you've got to go for your Z in certain circumstances because the rebound property happens, you've got to spend another six weeks, it might never come up again and the worst part is pre-proved for 900, someone paid 870, I would have paid 875, that is the worst feeling that you want. So being clear about that, that is absolute gold, people, there's some great advice in it because we all want to pay the least amount that we have to do but sometimes we've got to put our hand in our pocket. So let's just recap the pre-negotiations there. So what we talked about before, even speaking to the agent, get your finances in order, make sure it's something you can not only buy today but also hold in the future, make sure you've got, again, that loan pre-approval in plate. In terms of your homework, price research, go to the sold tab, in terms of the other things you're monitoring, how long are these properties staying on market? In certain markets where they don't have auctions, look at the number of properties that are under offer. So get that combination of how quickly those things are moving, in auction markets, it's pretty clear to get a sense in terms of what's happening in that particular reason, a region I should say in terms of that as well. Then motivation of the vendor, try and that is very, very valuable information and you're going to hear about that very shortly when we talk about the tactics inside that negotiation. Build rapport with the agent, don't be that knob, don't be that idiot. In terms of don't be that big ego person that sort of thinks they know this start to build rapport with the agent and be professional and courteous with the agent and prices last bit of gold there is set your pricing and your budgeting around. What is it? Great price, fair price, all, you know, your walk away, no regrets price as well. So that just sets up the framework nicely right around the pre-negotiations. Let's now talk and pivot to the tactics that work. So let's put what we've just learnt into action by unpacking this next step up then we're about to have to be right. So the first thing you've got to do is assess the market, is it cold, warm or hot, that's really important. Like if I'm buying in a regional town where there's not much interest and not much activity, that is a way different approach that I'm going to take versus rewind 18 months ago and I'm buying in Perth, right? So there's your extreme, so you need to be able to get a temperature on the market that you're about to buy into, right? So we're talking at a national level here with our audience. So someone might be listening to this in Adelaide, might be listening to this in King Ireland, might be listening to this in Darwin, might be listening to this overseas, so all markets are different. So the number one tactic that we need to do is assess our market, because if you're on a very hot market, that information asymmetry is on steroids because not only do you not have the information advantage, but a lot of agents are going press hard for copies first in selling before the first open, all that sort of stuff. So that's at winning stream and the other extreme is clearly what I said where the market is, lots of days on market, the buyer is in control. So sellers market, buyers market, that's super important for us to determine. Then when we get to the point, we've touched on this a little bit then, but the agent is not on your team. The agent is just not on your team. The agent is there to facilitate you, paying as much as you possibly can on behalf of their clients so they can run up the hill and tell the world the result that they got. And hopefully you will pay a price that is better than any other agent in the suburb so that they can beat their chest. That's just the nature of how the game works. So the agent is not on your team. Then when you're about to make an offer, be prepared to walk away. So recently you and I were in Bali, Ben, I had the kids with me as well, and part of the joy of the second week, first week was obviously about the people that we were there called to serve. That was taking a relaxing break, and the beautiful thing for me was watching my boys turn into Gan Negotiators, trying to get the pair of shorts or the T-shirt or the shoes that they wanted in. What they quickly worked away, what worked out was the offer that they gave them. They usually halved it and dropped it a little bit. So if they said 300, the kids would go, "No, I'll give you 134." And based on the look on the vendor's face, we'd tell them if they were genuinely offending them with our playing games. So I just said to the boys, the quickest way you can work this out, if you want to get the negotiation done very, very quickly, is work your formula and then just wave your hand and walk away. And oh my gosh, they quickly worked out at the beginning of the week versus the end of the week. The negotiation times were very, very short. So that's just an anecdote of what we're doing. Actually the stakes are higher, sometimes the games that are being played are more sophisticated, but at the end of the day, Ben, you've actually legitimately got to be prepared to walk away. Unless it is a property that only comes up once every 20 years and you definitely want it, you have to be in a mindset that if I can't walk away, I'm going to lose my leverage in this negotiation. Yeah, that's the no regrets type example that you were talking about because the asset is so scarce. So it really is important then in terms of if you are going to put an offer in play, how do you support that offer? Because verbal offers are one thing, but if the agent wants to get a sense of how serious you are, the sign contracts are going to be something that's really, really powerful as part of those, as part of your offer and be really clear about those conditions. So I'm signing a contract with my clear offer. I'm potentially looking at waiting some of my calling off rights. Now I wouldn't recommend this for anyone who's new to the game. You know, we're not encouraging basically to get, because I'm to buy the real estate agent because you're not a negotiator and you haven't been, you don't understand how the real estate agent market works because it's an insider's game as Bryce always talks about. But it is important that some negotiators will be willing to do that because they've done their homework and they know how the game is played in terms of the deposit and the transfer check. You've got to be serious about that. So, you know, here, where do I send a transfer through or where do I put my unconditional offer in play? Because that can move the conversation into your favour in terms of, like let's say hypothetically they're quoting $730,000 and they're sort of saying, and we're not taking off as before auction. Well, ultimately, if you put an offer in and it's in writing and the contract's in there, that's going to move the agenda with the agent in terms of, well, actually, that's obviously to get me excited for us quite a low watch ago. So what is the, you know, what is the reserve and trying to extract that out as part of the tactics? Now, you're trying to be professional and not being rude about it, but effectively you're sort of saying, I realise they're not taking off as, but I'm trying to get a sense of where this one's going to land, so you can potentially move that conversation on a little bit quicker. Yeah, the specific time frame is important, Ben, because you agents will shop your round. You're sent, you put an offer in and their job is to go, I've got one that's accepted with the vendor. So you want to minimise that amount of time. So you need to, it's a delicate dance here, but it's somewhere between 12 and 24 hours from putting the offer in place for you and being genuinely letting the agent know that if we don't hear from them, we'll move on to another one. And yeah, you might have two that you're trying to debate. Like it's a flip at the coin. It might be a 60/40, but from an investor's point of view, you want to basically, you know, see whether you can, because you're going to only buy one at a time usually. So, you know, there's two that you, you know, it's a 45/55 sort of model. You're going to say, well, I'm going to put my best offers in on both of them and see which one I can grab in terms of what that looks like. 100%. So, but, you know, to your point before about waving, calling off rights in some markets that are hot and fast and big, big, mature cities like Sydney, you're going to have to do that to even step up to the arena, which is why all the pre-work is really, really important. Because if you've done all the pre-work, you can actually confidently wave calling off rights, but if you haven't done the pre-work, you would not want to do that right. So, another tactic that you need to think about is the negotiation doesn't end once the offer is accepted right because in a lot of the, in a lot of towns, there's still subject to clauses and they really matter like, if you're in New South Wales, you're going to exchange that is unconditional at that point in time, but if you're in other cities like Western Australia or Queensland or even to certain parts of Victoria as well, subject to certain things, building a pest, finance, all those sorts of things. So, that, that signals that once the offer is accepted, that's just the starting point. It's not the ending point and being vigilant around those clauses is really, really important so, something to remember where the timeframe, where, where energy needs to be, energy needs to be expended to unconditional, not to conditional offers. Yeah. So, let's wrap up some of those tactic points in terms of, so assess the market, cold, warm hot in terms of your offers, be serious about it, just verbalising an offer in some respects isn't going to move the dial in a moving market, be prepared to walk away. I think those negotiation tactics in terms of what are you, what, what is going to be acceptable because you've just done all the knowledge around the motivations of the, of the vendor. We don't want you to be rude or arrogant to the agent because that's only going to put them off side. In terms of, be prepared for counter-offers, be prepared to be thinking about how far you're going to go, refer back to your budget as part of that particular story. And then, you know, as Bryce said at the start, agent is not on your team. The agent is working on behalf of the vendor to get the best possible price for them. And also, hopefully get a result for themselves that they can also promote to their future vendors that they want to sign up. Now, you're going to have to come up with, so you're going to get used to some language that agents are going to say to you, hey, listen, I know you've put an offer at 1.1, but the vendor wants 1.2, right? That's sort of language is going to happen to you all the time, but if you've done your prep work in the sold tab before you start the negotiation, you say you need to be prepared to say things like, hey, listen, I understand that that's what they want. I really want this property, but I can't justify it at that price. And if you can help me show me other comps that have done that, let me know at this point I'm satisfied with my offer because one thing you'll need to know with agents is there's always going to be another buyer. They're tactics of scarcity, urgency and deadlines, so you have to be willing to put up with some of those tactics in order for you to be able to stand your ground. But the only way that you stand your ground is by being adequately informed, not letting the agent inform you, not letting someone else do all of the information gathering for you. It's camping out in the sold tab so that you know exactly what it's meant to be. And assessing what the market is actually doing, is it a buyer's market, is it a seller's market? Because if it's a seller's market and it is running hot, some of that stuff that you're going to camp out in the sold tab is not going to be obvious to you. But the final thing I would say to you is don't try and win the negotiation and win is in inverted commerce bin, but lose the property. Early on in my career as a buyer's agent bin, it felt like a game of ego, my ego against the agency ego, that's just a rookies mistake, that is just an inexperience because sometimes with the information asymmetry that exists where the agents know way more than me, if I'm going to put my ego up against there ego, that's going to be a battle that you lose every single time. So to my point before about if you've got $900, you put an offer at $50, you got to acute someone else bought a $870, you said I would have paid $875, that's when you try and win the property but lose it. So be very, very mindful of that end book. There are so many tactics that you can do when it comes to negotiation and there's some good tools that we can recommend for you, but in the if you're going to do this yourself in the cut and thrust of it, you've got to remember a few basic things and what we've talked about, are the basics that you need to make sure that you're going to adequately represent yourself in the negotiation and make sure that you don't go too much. So brush your sharing, obviously, 30 years of your knowledge in this particular space, can you quickly also then run through what not to do in terms of what are the, what are the things that, you know, that like you gave a little bit of a clue there, leave your ego at the door, there's one of them, but what are the other things that are also important well, the main one is one that's actually very difficult to do and that's be very, very on guard with your emotions right because if you get emotionally attached to early agents, smell, desperation, some agents know what they do, they go on a Saturday, they go to the two partners that are walking in, you go and check it out, have a look through and then they start a conversation with the kids and they and they have any sense that like the kids are so disarming, so any time you walk in and say I love it, any time you walk in and start moving or mentally moving your furniture in, every time you start acting as if it's yours, remember the little tiny bits of clues that drop out of your mouth around, you know, we'd like to move in before Christmas, we were like little things like that, I just try to find a property before Christmas. Just gotta be so, and there is a fine line because I'm mindful of the fact that sometimes you can become, you know, listen to this stuff and be too on guard of what you're thinking that you become a robot and you don't actually signal any attention to the agent, but the point is that if you get emotionally attached to early, the agents will pick up on that, they're like a shark that smells blood from a long way away, that's really really important. So the emotional detachment is, that's why bias agents are, you know, a very valuable thing because there is actually legitimate emotional detachment because they are negotiating on behalf of someone else, like when I want to buy a property and I really want it, I'll get someone else to bid an auction for me, it's like I don't want, like I don't want to pretend I'm not human, very true. Now why should people avoid putting offers in on a Friday bros? I think because what you want to do is you actually do not, you want to, so this is not always possible, but if you can avoid Friday offers, sometimes the market will dictate that you just do it whenever you have to, but if you put it up for it on a Friday and you say look my offer lasts for 12 to 24 hours, that still gives them a chance to do another open for inspection and shop you around. And sometimes you need help from solicitors and other professionals who are not working over the weekend. So I would just say don't give yourself a disadvantage by putting offers in on Friday, when you know that the game day for real estate agents is Saturday. So why would you do that? And you also have another little piece of gold here about not skipping inspections. You're about to spend an extraordinary amount of money. Why would you negotiate without, you know, in New South Wales a lot of times in Victoria to get it off the market? You have to do all your DD beforehand, whereas in some of the other markets, it's subject to easy getting a building and pest done afterwards. But in Sydney, why wouldn't you do a building and pest beforehand? Why wouldn't you get the strata report looked at beforehand? Why would anyone skip a walk through inspection? It's an enormous cost that you're about to undertake. And so don't shortcut any of these inspections. It's expensive and it's important. And part of the agent's MO of urgency and scarcity might suggest that there's other people around. Don't do it. It's too expensive. You've got to be super clear on the motivation of why the vendor is selling. And if you're buying in a strata scheme, you want to know what your names are up to. You want to know if something's been called. You want to know if there's actually a reason outside of seeking funds, you know, conditions of the buildings, those types of things, really, really important. In terms of, we've also mentioned earlier, don't rely on verbal offers. I've mentioned it a couple of times earlier. But also, you know, a couple of other things, you want to try and make sure about losing control of your emotions, right? Like, you know, again, the competitor that I don't like seeing at auction is the dad and the daughter. I've told that story before, but, you know, they've got their budget, but then dad, you know, obviously, has to have the pride of, you know, helping buy his daughter or son of house and all of the sudden, they overpay. So just make sure that you keep those emotions in check and again, really set up your fair price or your walkaway price. And then in terms of, avoid not setting, you know, settling on time frames. So this is what we're talking about here about sort of offer will be shopped around. So if you are not setting those time frames, then ultimately house serious is the offer, you know, and you've got to create that sense of urgency as part of that. And I think that's a really nice segue, Bryce, into the great cruise fast in terms of his wisdom. You've got some really lovely bits of gold here that I want our community to share around tactical empathy about, you know, no is progress and some of that mirroring. So let's get into some of those examples that you've got, which will sort of bring home what we've been talking about in terms of what to do, what not to do preparation and so forth as part of bringing this whole idea of negotiating to the table when it comes to buying property. Yeah, the great Chris Voss, we've had him on the podcast, Ben. We'll put a link in the show notes to go and listen to that. And he has a book called Never Split the Difference. And in that part, in the front of the book, it talks about how most people meet in the middle and his, his goal is to not meet in the middle is to actually get exactly what you want. So he employs a couple of wonderful tactics. First one is tactical empathy, which is essentially a, a user friendly term for the fellas, which is emotional intelligence. If you say to the fellas, do you want to be emotionally intelligent? It's like asking if you want an egg and bacon pie or a quiche. They have, they're exactly the same thing. But to, to the lads, we usually want to have some form of bravado. So tactical empathy is using terms that try and draw out the information from the agent without them knowing exactly what you're doing. So sounds like the vendor's keen for a quick sale. Is that right? Sounds like feels like looks like there's these leading phrases that you can use, which actually try and draw out information without being definitive. Because if the agent, you said it sounds like the vendor's keen for a quick sale. Is that right? And the vendor goes, no, they're like, you go, you could still say face because you didn't say they are looking for a quick sale. It just sounds like it sounds like it's just an escape card. So we, we want to be researched. Like if you ask the vendor why the, if you ask the agent what the vendor's selling, their answer is just going to be a Dorothy Dix would answer. So by having tactical empathy, trying to draw out what's going on, which he talks about in his book, no, his progress, right? So instead of asking the vendor, with the vendor except 1.2, they like to actually be in control with the power of no. So would it be ridiculous to offer 1.2 for this property? No. Right? It's, it's the agent can be in the power point, power position from doing that. So no is progress. And then three is mirroring. I love mirroring. I do it as often as I possibly can and practices often as I possibly can. But agents is something like the vendor's hoping for 1.4 million. And you go hoping for 1.4 million. And then what happens is they will, they will want to fill the space if they're unless they're masterful Chris Voss DVTs. Just by general nature, they want to fill the space. So mirroring, I do it with my kids. I do it with my life. I do it with them around me. I think it is the greatest part of tactical empathy and mirroring of the two greatest things I got out of speaking with Chris and reading his book. And then Ben, there's a few more that we can run through here. Another one is labeling. So you want to give them a label to see if it sticks, right? It sounds like you're under a bit of pressure to move this quickly, right? Which is part of the tactical empathy. But you want to actually see what's going on and see if that actually sticks and labels them because ultimately an exchange of information is largely trying to determine exactly what the pain point is here. And you're looking for little bits of them dropping their guard, which is going to give you a little bit of insight to help you when you are trying to frame up your negotiation. The other thing is the the accusation audit. Now, the accusation audit is actually just front footing when you're feeling like you're being a bit negative or putting some objections up right. So he has an example of you're probably thinking this offer is too low and we're wasting your time. You might even feel like we're not serious buyers. But here's where we're coming from. It's actually front footing. Some of the things that might be running through their mind so that it's actually bringing that into the light. And then once that's left out into the light, then you can actually give the information from there. So some people might say, I'm about to offer you a low offer. I'm about to justify why. So why don't I front foot that you probably think it's going to be a low offer? And you probably may think that the low offer isn't even making us serious. But let me tell you why. And then the last one is, as the book's title says, Ben, never split the difference right. Instead of meeting halfway, get creative. So we talked about this before. What are the incentives, the better prep work you've done, and the better the way that you've treated the agent and the better that you've been on a fact-finding mission to find out as much information as you can, then you can add incentives. I told you about my friend in Perth, who's incentive for the vendor was they didn't want to move twice. So beautiful. I promise you, we'll never split the difference if I know that you never want to move twice because I'll actually get you to work out. How can we make this work from both sides without moving the number? That's what the game is about. And people thinking it's all about price is just not true. And that's hopefully what we're going to share with our audience today, Ben, that there are other things that we can negotiate that can distract from price. Yeah, I really like that last one. You know, how can we make this work? So some of the language I've used in the past is, look, I'm at my limit. That's the budget. What other things can I do from a conditions point of view that might move the deal in my favour, right? That's exactly the type of conversation you want to be in when it comes to that. And what I try and do as part of the story is, I'm building a storyboard in my mind about all the moving parts. I'm trying to just bring context into the vendor side, into where the agent sat, and then ultimately where I fit into that puzzle. And if I'm working on behalf of the client, I'm also keeping, you know, through as buyer's agent, as price we're doing, we're keeping our client fully informed in terms of what that process looks like. So information is power, you know, as part of that particular story. So if you come prepared, you bring your best A game because you are prepared, those are some of the things that are going to really make sure, as final takeaways, give you that opportunity. What else are your final takeaways for us? For me, a very simple bend. If you forget everything we've just talked about, but only do the prep work, I think you're going to give yourself a very, very good chance of making sure you don't overpay or get taken for a ride by the vendor because if you have a really good understanding about what your budget is and you have a really good understanding about what other properties of soul for in the area, and you have a really good chance of knowing exactly the conversations that you and if there's another person who is making this decision with you, a life partner, someone else. If you're super clear on having done all of the stuff that you're in control of before you even step up to the plate, the chances are there's going to be sensory overload. The agents used to this, they might see something you might slip something out of your mouth, but at the end of the day, if you just go unprepared and then be humble to the agent, go, I really like this property, but I can't just apply the price you're asking. So if you can get closer to where I'm at, great, if you can't, we'll look at the next one. That is going to be the biggest weapon that you have because as you build out your layers and you actually build out your experience and you actually build out the depth of negotiating tactics that come and that a lot of our team do all day, every day, then that comes from reps in the field and that comes from doing it all the time. But for the folks who are just using this, they're going to negotiate this weekend and they need some help. That's your superpower. Be prepared. You're not going to get the rug pulled over your eyes. You'll probably say some silly things. You'll probably give them too many clues, but at the end of the day, if you just go, I know what value is. I've got a pretty good understanding and if I can actually try and find other ways outside of price to get them what they want because this is a debt, it's not a battle. That's half the job done, Ben. Lovely, mate. That's why you're the main game player when it comes to negotiating skills in their space, you've bought hundreds of properties over the journey and that's obviously allowed you to fine tune and sharpen those skills and hopefully that's of benefits to the community. So terrific result, mate. Thanks for unpacking all of that and I'll throw my two bobs in there on the journey, but there's no doubt about it. You know, obviously practice makes perfect and you've been able to do that over the many decades as well. My life by design hack today, Ben, is something that crossed my desk and I thought it was interesting and then I'm going to tell you the irony that happened at the end of this ripen. I'm going to share something that I thought it was a single sheet of clearly apparent who'd written to their child if you want to play electronics over the summer. Here's a checklist for you to be able to do that. At the beginning I said, have you colon and then it goes, have you made your bed? Have you brushed your teeth? Have you brushed your hair? Have you gotten dressed? Have you had breakfast? And then underneath that it goes plus, have you done 20 minutes of reading? Have you done 20 minutes of writing, coloring? Have you cleaned up one room? Have you played outside for 20 minutes? Have you made or built something creative? Have you helped someone in the family? I thought, oh, isn't that interesting? And I immediately had my self-righteous hat on. Yes, I think this is a wonderful little hack to make sure. And then I thought it didn't really occur to me. It's like, actually, why doesn't this apply to me? Why should I have made sure I've made my bed and brushed my teeth and all those basics that adults tend to do? But what about, why? Instead of sitting there scrolling on my phone, have I done my 20 minutes of reading? Have I actually gone and not played outside, but have I shot some hoops or have I gone for a walk or have I helped someone? So, isn't it easy for us to quickly get all righteous and go, yes, we should impart these pieces of wisdom onto our children so that they do that before electronics. But it's the big grownups. It's the big kids here too that can take their advice. So my life hack today, folks, is that may help you if you're doing the battle right now with kids and electronics. And let's be honest, aren't we all, but well, not some people do it really well. But what about ourselves as adults? Have we done 20 minutes of reading? Have we done 20 minutes of writing? We cleaned up a room. All of those things. So anyway, Ben, I thought it was not like it. Well, if you want to, you know, model the heavier that you want others to follow, right? So it's pretty simple stuff. Yeah. Yeah. Yeah. Have it in the mirror, boss. Hey, Ben, what's working with me now? I've got to sit there, work all day, work all night. And the boys still want to play. That's all funny. Hey, what's making property? Yes. Yeah, I wanted to talk about the, um, the Victorian government, uh, this week has launched a new rental dispute system, Bryce. Oh, who would have thought? Well, who would have thought that this would come to this in terms of what we said when in 2018, and then obviously in 2020 and 2022, when they started introducing all these rental reforms, um, that it was going to blow up the V cat, which is the tribunal. Well, low and behold, what's happened? V cat has been blown up. And now we find ourselves with a whole new system because V cat can't handle the amount of disputes that are coming in through the real estate rental market. So they say, Bryce, it's a quick and convenient service, but it's, and it's free. And it's free, but it's not free. At the end of the day, the taxpayer is paying for 40 of these new, uh, resolution experts, as well as a team of people and they've got locations all around Melbourne to try and resolve disputes between the private rental accommodation provider and the tenant. And that, they will be things about rent, damage, um, you know, repairs, those types of things. So, um, I said this would happen. It is absolutely happening because of the way in which, um, the Victorian Labor Government are alienating, uh, property investors and the, the owners of the property, um, they need to understand one very powerful heuristic. And that is the endowment effect, um, anyone from the government or the regulation department, you need to start understanding that because the problem is when you own something and you think you have ownership, but you think you have control of it when people take that control away from you, the endowment effect kicks in and you get pretty angry. It's almost as powerful as loss of version, which is two times more powerful than game. So understand that you are, you are doing that, uh, in terms of, uh, two property investors here in Victoria. So, um, this new dispute resolution is, I'm calling on the Victorian Labor Government to track these disputes and report them publicly. I want to know the number of investors that are causing for the mediation to occur instead of the, just the number of renters who are also putting their claims forward. And I think it needs to be reported publicly, um, every quarter in terms of what was the dispute about and how was it resolved? Um, because with that data, we can improve the imbalance that is now in place in Victoria. And then we can build confidence of further investment, which will release billions of dollars of investment into Victoria, which will then alleviate the housing crisis or the rental crisis that we've currently got in the state. So there's me getting on my soap box price. And it was going to happen. I said they would blow up the cat because once these property owners understand that they've effectively got no power in running their private rental accommodation business, all of the power is now with the regulator or the tenant. You're going to see a blow up. And this is what we're seeing right now. Well said, folks, if you want to have a look at that, um, any of that information, there'll be a link in the show and I'll see you can go and check that out just to what been is talking about there. Mate, thank you for cutting that lap around the negotiation line with me today. Hopefully that served you this week, folks, as you enter into the market and start negotiating and getting to the fun stuff of making sure that you take action. But, um, always a pleasure mate. And, um, until next week, knowledge is empowering, only if you act on it. Only if you act on it. See next week, folks. Hey folks, Bryce here again. I just wanted to catch you real quick before you go. If you're new to our community, I want to encourage you to listen to our very first 20 episodes as the concepts we share in EPS 1 through 20 are foundational principles, pillars and frameworks that you need to know for you to get the best value from our content week to week on our show. My little tip is to listen to it at one and a half speed. Now, for those of you that are time poor and don't have the option to go back to the beginning, don't worry because we've got you covered as well. We've created a binge guide that summarized these foundational episodes into one easy to digest booklet so that you can get up to speed super fast. So go to the show description on whatever device you're listening to now and simply click on the first 20 episodes link to download it straight away. Oh, and by the way, whilst you're there, you'll find a few extra goodies for you, including a link to download our lifestyle by design app more, the home of wealth speed and wealth clock and our hugely popular money smarts money management system, as well as how to get free copies of our best selling books. Now, just to remind you that anything we cover on this podcast is not considered to be financial advice and we certainly recommend that you seek out expert advice tailored to your unique circumstances and everything we talk about is general in nature. Folks, I want to encourage you again to click on the show description wherever you are listening to access all the free goodies we have for you. Until next week. [Music]