INVESTING
Although there are a number of market makers in the property game , there are two that stand out if you are looking for the best property deals in the market : Estate Agents and Property developers .
When most investors or any property buyers for that matter want to purchase a property , what is the first thing that they do ? They scour the internet thinking they will find bargains .
This might come as a surprise to most , but if you see a property advertised online you are too late . The best property deals that have been done in the past and will continue to be done in the future will never ever be advertised .
Just to drum this home even more on a personal note , not one single property that I own or have developed was ever advertised .
The reason for this is quite simple . In SA , Agents have to spend enormous sums of money on advertising costs that are paid upfront and only recovered once the commission becomes payable .
Because the commission earned by the agent can be considerably reduced by the advertising costs , agents will do everything in their power to try and sell the property without having to incur the advertising costs .
To do this the agents begin by calling their list of preferred investors , in other words investors that they have previously done business with . If the preferred investors are not interested , the agents move on to phase 2 which involves e-mailing their database , which for some agencies can consist of thousands and thousands of buyers .
If they are still unsuccessful , the agents only then advertise the property online . Once the property is advertised online , as a potential investor you are in reality the third tier of purchaser that the agent is trying to reach . You will suddenly find yourself as one of many amongst the madding crowd calling the agent and trying to do a deal .
In a rising market the sale of the property then becomes nothing more than an auction and you will end up paying the seller full asking price or more to secure the
44 JUNE 2024 Real Estate Investor Magazine