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Q: Finding and Dealing with Real Estate Agents ( Answered,   1 Comment )
Subject: Finding and Dealing with Real Estate Agents
Category: Reference, Education and News > Consumer Information
Asked by: markabe-ga
List Price: $2.00
Posted: 23 Apr 2003 02:24 PDT
Expires: 23 May 2003 02:24 PDT
Question ID: 194231
I’m an aspiring Real Estate investor in Australia, and I want to know
what resources, such as articles, newsletters, etc there is on the
internet that deals with real estate agents. Specifically:

How to find a good real estate agent: There are so many agents out
there, and I’ve read that most of them are awful. In fact, here in
Australia there was a survey on the trustworthiest professions in the
country, and real estate agents were at the bottom of the list, along
with used car salesmen and journalists. I’ve read that you should
"find an agent with a good reputation." I’m looking for better advice
than that.

So how do you find a good one to deal with? What do you do, what do
you ask?

Also, I’m reading about positive-geared property, so I’m looking for
an agent that would be familiar with that concept. Any ideas on how to
determine whether an agent really knows about it or is just bluffing
to make a sale?

I’m also looking for pointers on dealing with agents so that they
don’t end up screwing you over.
Subject: Re: Finding and Dealing with Real Estate Agents
Answered By: angy-ga on 04 May 2003 00:29 PDT
Hi again, Markabee !

How do you find a good real estate agent ? You could do worse than to
look for one displaying the "Jenman Approved" logo. I had the
experience of attending one of Neil Jenman's industry seminars six
years or so ago, and was very impressed with both the man and what he
had to say. He has a website with extensive articles and information
on it at:

The Jenman Group define themselves as:

"A real estate education company promoting ethics in real estate. We
receive no government funding. We do not accept corporate

Our aim is to make the process of buying and selling real estate safe
and enjoyable for consumers.

We offer commentary and opinions to consumers. Unless otherwise
indicated, we do NOT charge consumers.

If you have a real estate question, problem or complaint, we will do
our best to help you. Please contact us .....

Although several thousand real estate people have attended our courses
or lectures, the only agents we GUARANTEE are those who are authorised
to display our
"Jenman APPROVED' accreditation 

If you wish to contact one of our APPROVED Jenman agents, we will be
pleased to provide you with details. Please call 1800 1800 18 or
e-mail us.

In areas where we do not have an APPROVED Jenman agent, we may still
be able to recommend an agent who is in training to become APPROVED.
Please call
1800 1800 18 or e-mail us.

Unless instructed by you, we do NOT pass on your name to any agent."

For Neil's slant on investment go to:


(Personal experience tells me this works - but if you're buying a unit
make sure to cost in sufficient for Body Corporate "Special Levies"
for repairs they failed to budget for in the original levy structure.)

Jenman's have free seminars for consumers, and it might be well worth
your while attending one in your area.

For another angle on Jenman, read the discussion at:

As for "positive gearing" (by the way, isn't that a second question,
really?) it only means what everyone did before the government allowed
tax concessions on an annual loss made on a real estate property-
called "negative gearing" and really only useful for medium to high
income earners.

Positive gearing therefore means that you structure your investment to
create an income for yourself, which you then declare for income tax
purposes and pay tax at your appropriate marginal rate.

Your real estate agent doesn't need to know this term; just tell him
or her you want an investment property that will generate an income
for you and go on from there.

A very clear explanation can be found at Barrie Magain's site:

General advice: don't buy a property you haven't physically looked at
more than once, don't buy off the plan, and don't believe anyone who
tells you that Body Corporate levies won't increase - they will.
Remember to set aside a budget for repairs.

Search terms:

Jenman real estate
positive gearing

Request for Answer Clarification by markabe-ga on 07 May 2003 03:12 PDT

What about articles on how to deal with the real estate agent(s), such
as getting them on the back foot, negotiating, and...

"Any ideas on how to determine whether an agent really knows about
[positive gearing] or is just bluffing to make a sale?"

Clarification of Answer by angy-ga on 07 May 2003 21:49 PDT
Hi, Mark !

Well, part of that's a whole new question, but I'm glad to pass on
what I know.

To take "positive gearing" first - it's a made-up term to mean "not
negative geared"; that is, you intend to get an income stream from
your investment. The real estate agent doesn't need to know anything
about it. You just use the phrase to get him to shut up about the tax
benefits of negative gearing.

What the real estate agent needs to know is that you want a property
which will show a good steady rental return for your outlay.

Make sure you have allowed for the legal expenses such as conveyancing
and stamp duty and the cost of surveys and valuations for loan
purposes, before you decide on the amount of your deposit.

Then for each property in which you are interested get a list of the
annual outgoings such as rates and body corporate levies. Add that to
your expected mortgage repayments and add a percentage to cover
essential repairs, gaps between tenants and unexpected levies. Ignore
the real estate agent telling you the levies and rates are not likely
to increase - he can't possibly know that - and add a bit for

Work out what rent you would need to charge to cover all of that and
still show a profit. If you are going to use a real estate agent to
collect your rent and deal with the lease arrangements on a day to day
basis (highly recommended - this is something they seem to be good at)
calculate their percentage.

See whether it is reasonable to expect someone to pay that rent for
that property in that area. If so, you're fine. If not, look somewhere

Your financial advisor, or the solicitor  dealing with your
conveyancing, should be able to help in more detail on that.

As for dealing with the agents themselves - most are ordinary people
out to make a living, even if they do tend to talk the jargon of their
profession. But as commission sales people, it is in their interests -
and the vendor's - to get you to pay the highest price possible, so
take neilzero's advice and tell them your top figure is $20,000.00
less than it is, or they will waste your time and theirs showing you
properties you can't afford.

Set aside three weeks or a month and treat your search for a property
as a job as far as possible. Look at lots of properties with lots of
agents, firstly by price, and then narrow down to area. Look at the
local papers (not the SMH) for a feel for prices. Ignore bargains in
the Multilist colour handout, they've always gone before the issue was
printed. You'll gradually get a feel for which agent knows what.

Remember the agent is not the person you are negotiating with. You are
negotiating with the seller, through the agent he has employed. You
are the one in the strong position.

About the only way an agent will try and manipulate you (outside of
auctions) is by implying there is another buyer after the property -
"A dear old lady wants to buy it for her nephew" or "a nice young
couple just starting out".

This usually translates as:

"If I don't close this sale by Thursday I won't get the commission on
it until next month" or something similar.

You are not trying to buy a house you've set your heart on; you're
after an investment property. If someone else gets in first on one,
good luck to them.

If you are viewing a property that is to go to auction, and you ask
the agent what it is likely to go for, of course he'll quote you high
- it's in his interests as well as those of the seller he represents
to get the highest price. If you've done your homework and really
looked at the area first you'll soon know whether he's right or not.

Read Jenman on auctions (see original answer) and avoid them if at all
possible. It's too easy to get carried away, and you don't know how
many of the other bids are genuine. If you must go to auction, set the
limit you'd be prepared to pay absolutely, and send a friend with a
mobile phone to bid for you.

My personal advice: if you can afford a house rather than a unit, do
so; this keeps the timing and cost of repairs largely under your
control and avoids the whole nightmare of Body Corporate Levies.

Talk to your financial advisor and/or accountant as well as to a
couple of lenders to get a realistic idea of what your limits are
before you start looking, and buy with your head, not your heart.

This is general advice from personal experience, and not intended to
substitute for professional advice. Get finance advice from finance
professionals; real estate agents are expert in selling and managing
real estate, not finance.

The Australian Tax Office, surprisingly, has (usually) helpful and
friendly people on their helplines who can explain the tax
ramifications for you, while you remain anonymous if you like. A large
selection of documents are available from their website:

They also have articles and advice.

Good luck.

A Google search on "dealing with real estate agents" (in inverted
commas) turned up anumber of articles relating to the US scene, which
is different from the Australian.
Subject: Re: Finding and Dealing with Real Estate Agents
From: neilzero-ga on 23 Apr 2003 04:44 PDT
If you want to spend less than $100,000 tell the agent that you don't
want to spend more than $80,000, otherwise they will waste your time
showing you houses that you can't afford and/or are overpriced.
Typically you should offer 8 or 10% less than the asking price. The
seller will often make a counter offer. This will get you some extra
time to check out the neighborhood, look at the house more carefully,
get some opinions that may cause you to withdraw the offer you made.
If you are shown a 100 houses, by a dozen realtors before you buy, you
will likely make a better choice and you can learn a lot about real
estate by asking lots of questions. Even if your first impression is
bad, look at the house very carefully, as it is good practice for the
one you will buy. Try to learn which improvements are practical and
which will insure little rental profit. Pass up features which will be
costly to renovate as only rarely can you get the departing tenent to
pay for the damage they did. You should probably ask to see fixer
uppers of the first 6 realtors as this is more educational than
looking at house beautiful. Be careful about buying fixer uppers as
the repair costs often exceed your estimate and the realtors estimate,
and hidden damage is more likely on a fixer upper. Your public library
should have several helpful books. Perhaps another expert can suggest
some helpul websites. I'm in the USA ,but my guess is Austrailia is
not much different.   Neil

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