In this episode, my special guest is Scott Aggett. He is the owner of Hello Haus, which is his flagship contract negotiation agency. Scott began as a licensed real estate agent in Sydney and then London on 1995. He co-founded and managed Belle Property Potts Point in Surry Hills and Walsh Bay then went on to manage his own business for redevelopment of residential and commercial investments both locally and overseas. Scott is a very well seasoned businessman in the industry and he will share with us how to be savvy in real estate particularly in buying properties and negotiating with sales agents.
Listen to Episode 96: The Games Agents Play
Podcast: Download (Duration 31:04 — 42MB)
- [00:01:45] She Renovates Live one day conference
- [00:05:03] The first rule when negotiating with agents
- [00:06:25] Two types of real estate agents
- [00:07:31] A good agent is there to maximise the price
- [00:08:39] Tips in finding properties
- [00:10:46] Private valuation is a waste of money
- [00:11:50] Two things that private valuation does for you
- [00:14:16] How a local agency conditions vendors price and market price
- [00:15:17] Agents get carried away with emotion as well
- [00:16:39] Supply and demand
- [00:18:35] Why auction is important to agents
- [00:20:16] Take control of the negotiation
- [00:22:02] Making a deal
- [00:25:50] When the vendor is unrealistic about pricing
- [00:28:31] The smoke and mirrors of buyers and agency game
- [00:31:26] Women sending men to negotiate
- [00:38:35] Agents’ everyday grant
“I hated the way that the buyers lied to you and the sellers lied to you, and you had to lie in the middle to everybody around you to make a business work.”
Hello. Hello. It’s Bernadette back with another episode of She Renovates. Today, I have a guest Scott Aggett who owns a business called Hello Haus. Just for some useless trivia, I thought I’d share with you that Scott actually started a real estate agency in Surry Hills that I actually work through now. Of course, he’s not there, he’s moved on to greener fields, but I thought that was quite an interesting coincidence.
Scott is basically going to be talking about the games agents play. The reason I have invited him onto the podcast is because in order to become savvy in real estate, you’ve really got to know when you are having the wool pulled over your eyes. For women particularly, we’ve got to be twice as on the ball. It is incredibly important to understand the tactics and the manipulation that does actually go on behind the scenes, you will find it fascinating. In fact, this day I was a little bit off my game, however, I have decided that the information in this episode is way too important not to publish, so we’re going ahead with it.
Before I get into it, we are two and a half weeks from the She Renovates Live. Sadly, the borders are not going to be open so if you’ve bought a ticket and you’re not able to attend, we have an email going out to give you your options and the capacity to be able to organise a refund or downgrade to a streaming ticket, whatever you choose to do. Which means that we’ve got a few extra tickets that we didn’t plan to have and what I’ve decided to do is if you have bought a ticket and you would like to bring your friend or family, you can actually buy one of those tickets for half price.
The second thing that I want to offer is that if you’ve got a streaming ticket, you can actually upgrade it just for the difference between the cost of the streaming ticket and the attendance ticket. I just wanted to clarify what you’re getting with those tickets, of course, you’re getting an amazing day either online via streaming or actually at the event with all the gorgeous catering and so on.
You’re also getting a gorgeous goody bag and if you are a streaming ticket holder, that will be posted to your address, so we’ll ask you for your address. You’re also getting an opportunity to submit your plans to David to get him to work his magic. On that day, you will be able to get his magic wand waved over your plans and instead of it costing you 400 dollars, it will cost you nothing.
You will also be receiving access to the recordings of the sessions after the event We have a recording team there who are going to film and after the event, they will edit those and get those up so that attendees can have access to the recordings.
You will also get to participate in some amazing competitions and there’s some great prizes. One of the prizes is a 12 month subscription to the Wonder Women program. There are lots of good reasons to attend the event, either online or offline. Those few things I mentioned add up to about 800 dollars worth, so jump in, there’s not much time left and grab your ticket.
Let’s get into the episode and bring Scott into the mix.
Bernadette: Welcome, Scott. How are you?
Scott Aggett: I’m good, thank you, and you?
Bernadette: Awesome. I’m really good. You’re from Sunny Queensland?
Scott Aggett: I am.
Bernadette: Where are you currently?
Scott Aggett: Well, today I’m in Brisbane. I’m actually working on a short term contract in addition to what I do at Hello Haus, I’m selling out a residential project in Woolloongabba, Brisbane. Up here for a few hours a day in addition to general negotiation services that I do nationwide.
Bernadette: OK. Excellent. We’ll talk about what you do in a minute but what I really want to talk about is what’s on the other side of a negotiation when someone goes to buy a property? What are the things that we need to know when we’re looking at buying a property that you obviously have had insight from the other side? And that’s really informing your service, shall we kick it off there?
Scott Aggett: Yeah, I’m happy to. Probably the first most important thing to realise is that the agent is employed by the seller and paid by the seller to make sure you pay the highest possible price. A lot of the times when you’re dealing with buyers, even when they’re obviously when they’re grain, but also when they’re quite experienced buyers, they get emotionally involved in the process. They give away a lot of their cards or show their cards to the agent. A good agent is recording all that information behind the scenes. Everything you say to them, they’re joining it down. I had an excel spreadsheet where I’d ask you questions, a tree frame those questions in different ways to get the answer that I want out of you. And I would use that against you in the conversations that I had down the path. So whether it’s a week down the path to extend for weeks down the path, I’d refer to my notes in my spreadsheet, and I’d know exactly what you said to me and when I know that I could press your buttons. But realised how hard I had to press or how soft I had to go so I didn’t blow you out as a potential buyer or I couldn’t get you to pay an absolute emotional premium.
So you’ve got to be aware that the first rule is the agents not on your side. The agent is 100 percent employed to make you pay the highest amount possible. If we start from that point, that’s a good point to roll on.
Bernadette: Yeah, I absolutely agree with that. That’s not just the way it is, they’re actually bound by law.
Scott Aggett: Correct.
Bernadette: There are codes of conduct that they have to abide.
Scott Aggett: Yeah. You’ll get agents that you’ll flip. There’s two things that you’ll get agents that will tell you that possibly a few of their trade secrets and more information than they should do. I would be hesitant to buy or sell through those agents, because if they’re telling you things out of school, what are they doing behind your back? I definitely haven’t got the best interest of someone and that someone is the person who’s paying them. That’s a terrible start to begin with if you’re getting some inside track into buying a property cheaply. I would be super wary of that.
The one thing that most buyers don’t understand is that a good agent can make you feel like you’ve got all the answers and that you’ve been given an inside track, that’s the job of an exceptionally good salesperson. They train so hard to make you feel like you’ve won the process, that you win the negotiation, that you haven’t overpaid for it, that it’s the right deal for you, that you are possibly the only one that was going to say it off market. You’ve got the special treatment, but the reality is a good agent is there to maximise the price.
They’re only selling it to you off market, they’re only selling it to you on the quiet because there’s not another buyer who is prepared to pay the same price. Maybe there’s a few agents that are behind the scenes doing the wrong thing but in general and certainly in the areas that I went to, worked in, I felt that all the good agents wanted to bring the properties to market because it gave them the most profile, which is their job, to build their profile, to get more more listings and earn more money. It also got the best competition for the property, which was the price for the vendor and got the best possible result.
When you live and die in that hardcore sales sane, you’re really hung out to dry on your results, so good agents will want to maximise the price every time. Just be cautious of that when you’re going into it but you can’t give away too many secrets. Keep your cards close to your chest and just remember the whole time that the person that’s holding your hand and giving you that great service right now, you’re looking to buy in two weeks, four weeks, or how many times down the line they’re going to be the person that you to go head to head and negotiate against. They train every week or every day to get you to pay the most.
Bernadette: It’s the sort of thing, you only get burnt on once.
Scott Aggett: Well, in terms of buying a property and maybe structuring an offer, do you think in terms of how you would go about that if you’re doing it yourself? A couple of tips in terms of trying to find some properties as well that you can do a lot of the buyers that I work with, and this is something that goes back to what buyers used to do when I was in the industry full time is that I encourage people to compile a very short email of what they’re looking for. They BCC all the leading agents in the areas that might be 15, 20, 30 agents that they can find their email address easily and quickly. Every fortnight you send that list to the agents to stay top of mind. That will give you the opportunity to get to properties first. I’ve heard you say before and you’re absolutely correct that agents will start to tell buyers as soon as I get the listing, even if it’s before it goes on the market, so you want to be in that select group and you can typically do that if you stay top of mind.
First, it for me would be, be visible with agents, be honest with agents up front as best you can in terms of telling them what your budget is, that doesn’t mean that you’re going to have to spend that in two weeks or four weeks time. You can choose what you want to spend when you control the negotiation but be honest with them about what you got to spend so they can find you the right properties that fit your criteria and not waste your time. If they know you’re a serious buyer and you’re being genuine like that, you’ll get great service from good agents.
That would be the first thing when you find the property that you want, I always say to clients that I suggest you see it two to three times, so you’ve seen it at different times of the day. Make sure you look at any privacy noise issues that might come at different times of day and take a friend or someone else with you or a professional person for a second set of eyes just to make sure you’ve got all those answers. When you’ve done those things and you’ve convinced yourself it’s a property that you want to dig into deeper, you need to move through that buying process as quickly as possible.
That’s doing your due diligence, whether it’s a building and pest inspection, maybe wanting to do your own private valuation just to get comfortable around where the prices are, you should know how to do those things in two to three days and that’ll put yourself in pole position to try and outbid any competition and get your nose in front, which is important if you’re trying to buy the property.
Bernadette: Let’s just jump back to that, doing a private valuation. I’ve always found that a bit of a waste of money, to be honest because I would pay a value for two reasons. One of two things would happen that would come in and say, once couldn’t I actually accompany the valuer, this property being on the market for quite- it’s actually the property that I’m living in right now, It’s been on the market for several months. It wasn’t the typical house and I was really struggling to get them to move, so they had it on the market for one point five million for several months. Then I brought a valuer in, I couldn’t be there, the valuation came in at 1.5 million. I said to him, “Well, it can’t be one 1.5 million because that’s been the price and it hasn’t sold”. He said that that’s what the agent said it was worth.
Scott Aggett: In my 25 years in the industry I’ve never heard about that. That’s an absolute one off. I’d hope that doesn’t happen. I have the opposite experience, I tend to find that valuer will down value- not to down value it- that’s a wrong terminology, they’ll be conservative in their valuation. It does two things for you, one, it lets you jump straight to the person who sees the most property and what the actual process of being sold for in the most recent sales. You get their expertise instantly, which is better than any agent, any buyer’s agent, any negotiator, anyone in the industry. You get to jump through their brain straight away, which is increasingly important to understand what’s happening in the market.
The second thing is it gives you a parameter to work from. If it let’s say, for example, that was on at one point five and I came in at one point three, you may have been thinking it was good value at one three five one three seven five, but if you know that if you have to borrow against that debt from that and it’s only going to get valued at one point three, maybe you’re over spending by fifty or seventy five thousand, even though you perceive it to be one hundred and twenty five hundred and fifty thousand below the price, and you think that’s a good deal.
I just think it’s an insurance policy, it’s quick, it’s cheap, other than your instance and I’m sure there’s some old ones around there, but in my experience, having done this, it’s it tends to be reasonably accurate. They come in at a number that everyone is comfortable with.
The other key thing that is crucial for using a valuer is, if they give you a number and that’s a circumstance one point three, I as a negotiator or you as the potential purchaser, if you’re gonna handle your own negotiations, can use that if you want to as a tool to negotiate the price down. You can say, “Look, it’s been on the market for x amount of months at one point five, you may have had other offers, whatever the bank’s telling us, the valuation saying it’s at one point three, I’m not going to tip you any further than that, you’re going to start lower than that, but I’m willing to give you the one point three today to get the job done. Whoever you sell it to, higher than that number is going to struggle if they’re going to get from it to back that up. And you’re probably gonna lose them anyway in the cooling off period. Here is an unconditional offer at that price. Let’s do the deal on that”. I use it as a negotiation tool.
Bernadette: Well, as a sideline, I figured out that this is a big company and they employ inexperienced people like juniors doing the valuations. There is value with someone knowing the area but some that don’t. I have actually done what you said had a valuer value something.
Scott Aggett: Interesting take on this at the moment, I’ve never seen before. This year on the Gold Coast where I live and visit the leading local agency up here has the vendors pay for evaluation and independent valuation upfront before they list the property and they give that valuation to all the buyers. There’s a low, medium and high price that is in line with what the bank will do and they give that to buyers and they use that to condition their vendors to market price and condition their buyers to market price. Then it’s just a negotiation down to supply and demand. If there’s buyers in the market and there’s multiple ones that can go above all, the price can go higher than that but at least it pulls people to where that reality is, not quite like that as well.
Bernadette: Actually, a really good idea.
Scott Aggett: Yeah, it’s working well for them very well. I priced out of it in terms of on those flights and sellers trying to get their price right because agents go in there and just tell them whatever number they need to hear to win the business and in Sydney especially, they go in and under quite a huge amount with the vendors permission and then everyone’s just out of whack and it’s a game of trying to beat the vendors down and big buyers up.
Bernadette: What’s your view on actually listing the price that you list the property with? What I see as a common mistake, we’re onto talking about selling at the moment is that, you know, as renovators get through their project, they become more and more emotionally attached to the property and it starts to look better and better to them. By the time they get to talking to the agents, they’re thinking it’s worth a lot more than what their original feasibility said. Often they have overspent somewhere along the way and that feeds into it. They released it and the guide is high and then that just kills the sale.
Scott Aggett: Yeah. And the difficulty is a lot of agents get carried away with emotion as well. They fall under the property and it’s really beautiful in its wow because it’s not what I come across every day because you’ve got a beautiful state of the art renovation that stands out in that market. They effectively buy the business and then it’s a terrible decision for the seller because you end up just stuck with an agent for three months and spend all that money on marketing and potentially styling and not get the result. My tip there is no matter how certain you are of listing it with a particular agent, I would always get three agents to pitch for the business, I still do, after twenty five years, I still get three agents to pitch for the business. As I just mentioned, you can use its value or there just to underpin that as well. You’d have to show that twenty one but two hundred fifty dollars four hundred dollars you spend that at least you’ve got peace of mind that if you’re going to go to market, you’re not pitching it at the absolute wrong price. It comes down to supply and demand. If you’ve got a unique property and it’s a brand new renovation like that, then there’s every hope that it’s going to be sold to someone else that pays an emotional premium so a valuer may not get it right as well but at least it gives you some benchmark to work from.
The three agents will give you a cross-section of where the price needs to sit and then you can gauge how to sell the property, which method of sale and how to pitch the price right. In Queensland, for example, we can’t quite price so not so relevant here if you’re gonna if you can have an auction campaign but in Sydney and Melbourne, definitely important to have that range set at the right number.
Bernadette: You can quote a guide in, can’t you?
Scott Aggett: No, in Queensland, auction is without a price.
Bernadette: On the auction, what about others?
Scott Aggett: Auctions and Expressions of interest. In private treaty you can do whatever you want as per usual.
Bernadette: Okay, no worries, because I know a place in Queensland in November and we were able to quote a guide.
Scott Aggett: At auction?
Bernadette: No, private treaty.
Scott Aggett: Actually it’s hard for buyers up here to get a gauge on where the market sits so really important to do your homework, do your research, be active in a marketplace. Get around to see what other people are spending at auctions to understand where those prices are. It’s meant to be a service to buyers to get rid of that undercoating and that uncertainty and misleading marketing agents. I don’t know, it makes the buyer’s job harder, really. It does make them do the legwork and groundwork, which is good but you need some guidance otherwise you’re just wasting your own time potentially on a property as well.
Bernadette: I agree. The other thing is, you would notice in New South Wales, the minute they someone puts in an offer and it’s higher than the guide well then the guide has to go off. It lets you know really where the market is so that’s quite a good thing. While you’re on that stage do you say potential purchasers from?
Scott Aggett: In terms of the negotiation side, one of the biggest things that people come to me too late is that they get told or we’ll get educated in the market that they can’t buy prior to auction. The agent tells them it’s got to go to auction, it’s got to be sold on the day. And really, unless it’s a deceased estate with a very specific clause, then it’s unlikely that it has to go to auction, the reason that is being said to you that it needs to go to auction or it has to is because the agent wants there four weeks in the sun. They want to build their profile in the marketplace and that leads onto a couple of other things that buyers aren’t usually aware of as well.
They don’t want your offer so when you’re trying to run around in week one or week two and gauge by throwing the lowball off a lot of people used to do, the agents will deflect you and keep saying to you, just come along to auction, they’re committed to selling, if they’re going to set a very realistic reserve, it’s got to be sold on the day. There’s a thousand throwaway one liners that they use here.
The reality is what they’re trying to do is avoid giving the owner any news that’s positive in terms of offers coming in, because exactly what you just said, if they have an offer at a certain level, they’ve got to keep increasing the guide price, which keeps the bar moving in terms of the competing buyers and it may drop off a couple of people that get freaked out and spooked that the price is going to go beyond their budget. They want to overprice it to win the listing, give the vendor no good news for four weeks, get you all to auction under a pressure cooker auction environment, apply that blowtorch to you under hammer, they do exactly the same thing to the vendor and they try to sell it over reserve and then shout the stars out there the agent of choice, and they’re getting the good results.
You need to try and take control of the negotiation and that’s quite difficult to do. It’s a honed skill that’s taking me a long time to do it but I try to buy off my clients as early as possible in that process but your students need to know or your followers need to know that it can be done. If you get told to join everyone else, the sheep auction day, that you should not take that to heart and work out a way to circumnavigate that and ask more questions, get more information out of the vendor or the agents selling on behalf of the vendor about what their motivation is, what price they’re willing to accept, what terms are suitable to them, and then structure and offer and use fear of loss to position yourself that you’ve made a great offer at the right level, but you won’t be here tomorrow.
That’s the key to it. You’ve got to put yourself into a position where I feel like they’re going to lose you otherwise there’s no chance you’re going to buy a product auction unless you’re overpay by a lot of money.
Bernadette: Yeah so they all say “I’m going to an auction on Saturday” story.
Scott Aggett: Yeah, we just did this religiously, we would just turn away people that we thought we were gonna make reasonable offers because we just wanted them to compete against each other on the day.
Again, our whole focus was getting the best possible price on the day. We were less about overcrowding and beating down the vendors and most good agents are less about that, they’re genuine about it. They’re just trying to get the best possible result because they’re in the game for their career, for long term, and they want to get good results and have a good name in the industry. The vast majority of auction agents that I’ve come across and said I buy nationally so I deal with all walks of life for every price range, and I just get sold the same throwaway lines every single time, then I just know how to deflect those and second navigate around it to ensure that we control the negotiation as best as possible.
I’ll give you an example of how I’d do that if you want this out. I bought a house for an investor client yesterday and an unrenovated house, purely as a trick and flick so that it’ll be tied nicely to what you guys do in terms of renovating for profit. This is a client that’s bought off me twice before, once in Darlinghurst and this time in Newcastle. He’s quite a high profile property valuer, so he knows prices better than I do in the areas that he’s looking like he’s incredibly well tuned to the market.
He had missed out with me twice last Saturday at auction. He got to me too late and I got the listings, I had no choice. In week three, it’s almost impossible to buy the property unless you’re going to overpay for it in competition. I let it run to auction and I’d bid for them at the auction day, but on auction day, whoever wins is really who has got the deepest pockets. I don’t believe this huge amount of auction tricks to win it. This third property came up after the first two were sold, week one of the campaign, he gave me a line in the sand of eight 850 thousand, he would have gone to 880 it had a guide price of 835. The last two auctions that’s all in the Saturday, I had eight to ten registered bidders are really hot in that price range in Newcastle. 835 guide price typically, you know what it’s like add 10 percent to it straight away so you’ve got to be thinking it’s got to have a nine in a low nine.
I thought 850- 880 unlikely especially first week, but we’ll have a go. I spoke to the agent and I understood why the sellers was selling and the background behind it, and then I wrote them an email, very specifically email which I’m happy to share with your followers as well, which positioned the buyer in another property already. I was creating that fear of loss from the very first contact with them. I’m saying to the agent, “Look, we’re a long way down the path on another property, off market. I’m not going to tell you where that property is because they’ll just keep asking questions about it. We’ve we’re sold on that one, absolutely long way down the track, and I’m happy to buy it. We’ve got it at the right price. It’s a great deal. However, this one’s just come up. I know it’s only week one, but our preference would be if we can get it the right price, we’ll buy it. You’ve got a site, there’s the other property. I’ve got it up my sleeve. Yes, we want yours and yes, yours is our priority”. That’s key to it to make you make it stand out, that’s priority so the agent doesn’t think it’s just a waste of time dealing with you.
Then you go about building reasons why it’s not worth X to you. So I said in the same email that, “Look, we’re prepared to buy 820 thousand that’s because the renovated properties are selling for X in the area and there’s no margin for us to do it. We just get that specs full freight really in terms of the price to pay for it and that’s where we’re comfortable paying and based on the comparable sales wandering about at home”. So I’ve got a little reference point for that and I write it in such a way that I know the agent’s going to share that with the vendor.
That’s the key to it so you’re basically doing the job for the agent. You do it in their words and that’s why being an agent and understanding their role in terms of how they’ve got to deal with the vendor or how they’re going to sell it to the vendor, that losing face is crucial to me buying property below market value. I understand the whole picture here in the negotiation. So then I can go back and use that fear of loss.
She said to me, “No, I think we’ll go to the open for inspection this Saturday. It’s only the first week. We’ll see how we go”. And I said, “Well, that’s fine. You do that”. It’s all very positive and nice interaction with them. It’s not aggressive at all but I said “That’s okay, you go ahead and do that but just know that we won’t be here on Monday. We will have bought the other property because we can’t lose that opportunity that we’ve got for them”. That was enough for her to put time pressure on the vendors and to do the deal at the price that we wanted. So I bought that eight twenty, below the guide price and 30 to fifty thousand dollars below the target price of the property value for a client of mine.
That’s a really good result, that was yesterday. There’s a deal out there like that where if you get the right seller, like you pre frame the right way that you can get yourself the deal.
Bernadette: Absolutely. Actually, I haven’t told you about our latest purchase.
Scott Aggett: No, not at all, I’ll be intrigued, go for it.
Bernadette: Well, I wasn’t intending to buy a property, as I’ve mentioned to you before, I work with Con. He rang up and said, you should have a look at its place because it’s been on the market for quite a while and they’re about to drop the price.
It was one of those situations where the vendor is unrealistic about well, as it turns out, it probably wasn’t unrealistic. This is a studio in Darlinghurst, near St Vincent’s Hospital, a really nice art deco building. He wanted it listed at 450 and we are advising him not to but he was insistent that was what would happen and then of course, it didn’t sell. It was a couple of months down the track. And then he said actually it now has to go, he had it painted, he had carpet put it in and dropped the guide to 400, and we came in and offered 370 and got it. I actually often think that the vendors are their own worst enemies.
Scott Aggett: Yeah. I would ask you in that situation and it is really crucial for the buyers as well, when you’re flipping properties, forget what the asking prices or the guide price, it’s not that worth. Now I ask my clients two things. What’s it worth? And let’s be honest with ourselves about what it’s worth. Most people aren’t honest with themselves about what what what’s worth what. They just think they can pay their price, which is not relevant to the seller. What’s it actually worth? And then number two, what do you want to pay? There are two very different numbers often and in your case, I’m not saying you didn’t get a great price, but I would say in that instance. What was it worth in the first place because seventy five grand or eighty grand sounds like a great discount from the first instance but was it only worth three seventy in the first place? Well, I didn’t receive that. You got, you know, 10 percent below market value, which is obviously a great result.
Bernadette: I forgot to mention the key piece to the story, the one we bought is the biggest one in the building. When I say biggest, it’s twenty eight square metres so tiny and there have been two recent sales in the building, one of them was the weekend after we purchased that one. Very similar, slightly better condition, but very similar and went to 515.
Scott Aggett: Wow that’s awesome. How did they get it so wrong in the agent?
Bernadette: I have a theory on that, but I’m not going to talk about it because that would be disrespectful to the person and I don’t really want to do that, but yeah, so there you go. It’s what’s on my mind, it’s a good buy so I’m really thrilled with it. Anyhow, that’s that. So let’s talk about your service and why? Because you’ve pretty much sold me on the fact that it’s the value there and I definitely agree with you knowing how the agents think has to be a massive advantage to negotiating with them. So tell me, why did you do this? Because it’s not like a lot of the buyers’ agents are charging 20 grand for a basic purchase of the basic property. You’re not charging anything like that, so why?
Scott Aggett: Because there’s a lot of smoke and mirrors in that buyers agency game. In every industry, there’s good operators and bad operators and some fantastic buyer’s agents. If you’re looking for a full service and in yours circumstance, when you’re buying and selling so often and you need someone constantly watching the market while you’re doing other things and you’re busy making money elsewhere, then that’s a great value added if you’ve got the right person that has got the eye that you need and they trained specifically for what you’re looking for, but that’s a very unique buyer’s agent.
You’ve got to be cautious saying, it’s a solution that fits everybody because it just doesn’t deal with so many buyers’ agents right across the country. They just hit me but some of them are absolutely fantastic. So to go back to your question as to why I did this, there’s a couple reasons why, one, I was incredibly frustrated with the real estate industry. I’d done it for 20 years, I owned three franchises of Belle Property Surry Hills in Sydney. I hated the way that the buyers lied to you and the sellers lied to you and you had to lie in the middle to everybody around you to make a business work.
That was the honest truth. It didn’t sit well with me, I wasn’t comfortable with it. I did it for a number of years. I just didn’t enjoy it. I tried to be as honest and straightforward to people as possible but at the end of the day, that just lost me business. I just wasn’t doing as well as I could. Well, some of my competitors who were willing to bend the truth where they had to to win a listing or to close the deal and rip someone off. So that was really the key of why I got out of the industry.
I had this idea to become a negotiation expert and kind of own that space about maybe eight to 10 years ago, because I thought that buyers, sellers have got their representation with agents that are trained and highly skilled, but buyers have got no one that looks after them in that situation. They are really lambs to the slaughter they left on their own accord to try and buy. And they’re competing against highly skilled individuals and highly emotional as well. So I thought there’s an ability for me to build a business that was transparent so that I felt comfortable that I was adding value to the business, helping buyers specifically, I didn’t have that hope, as I mentioned.
Another key thing for me is I dealt with a lot of this is actually another one of the main points, I dealt with a lot of single women in Surry Hills and Potts Point specifically. So a lot of divorcees, a lot of young executives that didn’t have a male partner or whatever, whatever with them and often the case, which I found really, really bizarre, is that they would send in a male friend or brother or father to negotiate on their behalf.
Those single women didn’t feel confident enough or comfortable in that negotiation space to do it themselves. What would happen so often is that the guys would come in and they just did the sledgehammer, “Oh, here I am. I’ve been hired. I’m a gun for hire. I’ll come in and I’ll smash smash smash. I’m not paying your price. Get lost. You’re an idiot. I hate agents”. I just deal with that non-stop and I thought there’s got to be a better way than this because the guys have got no more skills and they’re just going down that bullying path that we can win negotiation by just bulldozing it.
What would happen is I just got my back up as an agent. I would say, okay, well, there’s two or three people who want to buy this property. I’m going to get the best possible price but if you’re going to be the one that buys it, I want to make it really difficult for you. Then you’re gonna pay an absolute emotional premium for this property above and beyond what everyone’s going to have to. I’m going to keep pushing you until you bust, basically. And I just had that- I just really got my back up about it. I just thought that people are actually losing that are the women, in retrospect and I probably wasn’t doing them a good service.
When I got out I thought, well, that’s that’s part of the business that I’ll focus on is trying to help single women in that scenario and that’s been a big part of my business so far. It kind of works. And the other one was first homebuyers. I thought they would be key to the success of Hello Haus because they’re so green, I don’t understand the process. I fell head over heels in love with the property, but I’m having done it now for a few years. I realised first time buyers, I do get quite a few of them and over time, I get good results from them because they just don’t want to spend what they need to spend upfront so they often lose a few properties before they get there.
The thing I’ve learnt with them is that most first time buyers think they can do it themselves. They haven’t been through the pain points yet to understand that they need my service or a service of a buyer’s agent or a professional. I knew that there was space there to do it. Then I just wanted to do something that was different to this. There are thousands of buyers’ agents out there, as you know but there’s no one out there that’s just doing negotiation. I knew that I could add a lot of value there because I had a unique skill set. I was in a lucky position where I had I-was my my own selling principle the whole time for my career.
I never stopped listing and selling. I also oversaw a big sales team with which Con, who you used, was one of our sales agents so I was over all of their deals. I would be in and out of all the deals and listening to all those phone calls and understanding what those pain points worth advising how to overcome those objections. I’ve just got a lot of experience, thousands of deals that a lot of estate agents don’t have.
I’ve bought and sold 26 my own properties. I understand that. I guess how it all works and was in a good position to deliver on that for the buyers. And I just had to come up with a model, really, in terms of the pricing of how it works. I decided to last you last set it up I did a no win, no fee service, which worked great. I did 35 deals, in the first year, which was good. But the problem with that was every time I saved a certain amount of money, the next as it came on, I told them how much our saving would just set the bar lost. My job just got harder and harder. I got people that weren’t serious about buying properties. I just didn’t want to pay me a fee and they wanted me to do all the work.
I changed that this year and I’ve got an upfront retainer of nineteen ninety five, so just under two thousand dollars. That’s never ending really until you buy a property. If you miss a couple of times, I don’t charge anymore for that. And then I ask you, when you find the property I ask you to set me a target price. I work with you on that as well and we do some research on where we think the property sits. We set a target price that you’re comfortable with, which is my line in the sand. And then I take a performance fee of 15 percent of everything I save below that.
For example, it’s on at 850 and you want to pay 820 and I bought a hundred, I’ve saved you 20 grand, I charge 15 percent of that so that’s three thousand dollars plus the upfront retainer, then nineteen ninety five, it’s just under 5000 it’s typically when the average fees.
It’s been a good service and hopefully it’s a good value for people that have got the ability to find their own property. They don’t need the full service of a buyer’s agent but they want someone that is going to give them the absolute peace of mind they paid the lowest possible price. And it also avoids all the confrontation at risk because I do it all for them.
Bernadette: Beautiful. To add a little bit what you’re talking about women sending the man in to do the negotiating. I don’t do that but if Stephen’s around my husband and I’ve got a trade coming to quote, I’ll have him go and talk to him rather than me, because I know that he will get a much better price where I would have to work for that price. It’s just a fact of life that men think women will pay more.
Scott Aggett: Yeah, interesting and possibly I mean, you would know this better, so I can’t answer that question not being a woman, but all I can talk about is the experience I had with. They didn’t feel comfortable doing the confrontation in terms of negotiation.
Bernadette: That could be true.
Scott Aggett: The hard thing is how do you measure someone skilled at negotiating? Sending someone in that you think is going to be better at it for you just because you don’t like the confrontation doesn’t mean they’re a better negotiator than you might be. People will run the gauntlet and do it themselves, but the problem with that goes back to what I spoke about initially is a good agent will make you feel like you paid the right price and that was competition.
If you paid in that scenario, it was on at 850, you wanted 820 and I got you to pay eight forty as the agent. I’ll tell you that it was a two horse race or a three horse race and went right down to the wire and you just put the other guy 500 bucks or it might be but in reality, you might have. I might not have had another buyer or you were forty thousand dollars above the next best buyer.
People think they can do it themselves. Let me tell you, unless you’re a skilled, trained expert and you do this all the time, you were getting ripped off. You’re paying more. You’re paying retail. And it’s in Sydney, Melbourne, Brisbane, not so much Brisbane, Sydney and Melbourne, definitely. It’s not necessarily how much I can save people money. It’s winning the property through competition and giving them peace of mind they paid the least amount possible.
They are the two things. I don’t go in and pitch for business by saying to people, “Hey, I’m going to save 20 grand or I’m going to save 40 grand”. I’m just going to make sure I win the case for you and you’re going to pay the least amount you had to. I’ll do that by qualifying the whole time with questions with the agent. I know who and how many buyers are there, what the competition is. and make sure that you’ve got the right deal. That’s worth my fee. Yeah. Especially if you’re spending five and a grand, eight grand, a million bucks, whatever. Then you’re getting spade’s of value out of that personally.
Bernadette: Absolutely. And what you’re saying is absolutely right. I’ve actually seen agents not Con, I’ll just clarify that, negotiating with fictitious buyers and I’ve seen that happen. So they’ve been talking about buyers on my property that I knew didn’t exist.
Scott Aggett: Yeah. It’s an everyday grant. They’ll ring you up and say, “Listen, we’re expecting an offer to come in this afternoon or tomorrow. And it’s probably gonna be around this number. And the only way you’re gonna get this done is to come in and just pick. All we gotta do is just put this number. If you can get to 840, I can get it done for you”. There’s no other buyer. They just want you to close as quickly as possible. They put pressure on you that you’re going to lose that purchase and that you’ve got to pay X and you think, “Gosh, okay. All right. Well, I know that I can get it all over it by eight 840”. You go into an emotional state, you pay 840 and you get the job done. Champagne comes out from the agent. “Congratulations. Great job! God, you just won and you just snuck in”. There’s no one else, it’s a ghost town. No other buyer on it. You just gotta have it, gotta go into it with your eyes wide open and right from what we said at the top as nasty as this sounds like, it made it sound negative, but agent is not your friend. The agent is working the whole time to get you to pay the most amount possible. And if they’re not, then then you’ve got to question the character of the agent that you’re dealing with.
Bernadette: And that’s one thing we train our students to do, is to follow our bad agents.
Scott Aggett: Yeah, well, in terms of trying to get a good deal out of them? Yep.
Bernadette: Yeah. Thank you for that. For those who are listening, Scott’s details will be in the show notes. If you think this might be something that you might be interested in, then you can actually make contact with him and experience the service of Hello Haus.
Scott Aggett: Thank you. Thanks for having me today. I much appreciate it.
Bernadette: No worries, Scott. Take care.
Scott Aggett: Take care. Bye.
Okay. I’m sure you would have found that absolutely fascinating, I know I did. As I mentioned, I did actually learn quite a bit out of Scott’s information. Something that I don’t necessarily agree with is that- and I can understand from the point of view of a real estate agent, he obviously is very successful and committed in his role when selling a property, but there are lots of bad agents around and I know because I’ve seen it. They will just take one person through and if they think that they can get a sale there and get it off their books, they will do that. There is definitely a disadvantage in following the lazy, the not very smart, the agents that don’t do their best for their clients and just make sure that you never sell through them.
Lastly, we had a beautiful review over on iTunes. I figured out who it’s from, it’s from Nicole McCann. Apple doesn’t tell you, but I figured it out and the reason I know is because Nicole has just become a wonder woman. What she says is “Bernadette is amazing. I love listening to her podcast. She’s real, she’s honest, and she shares all. Thank you, Bernadette, for being so informative, lovely and real. I’m a listener of her life”. My gosh, you’re seriously, Nicole, you are gorgeous. That was a lovely review and I really appreciate it. The other thing that I’m really excited about is we’re going to be working together and I’m dying for you to get into your projects because you’re going to be a rock star.
Okay, so that’s it for today. If you haven’t left us a review, I’d love it if you took the time. I read every one of them, and I really appreciate it because it lets me know that I’m not talking to myself.
See you next week.