In the last two installments of our ever popular homebuyer guides, we have talked about the best buyers to look out for (first time homebuyers, or freshies), and how to creatively price your property. If you missed them, read this first, and then this.
Specifically, inside the guide on pricing I had shared with you a technique dubbed the “Ariely” tactic after Dan Ariely (the researcher cum writer who first popularized the technique in his book Predictably Irrational which I highly recommend). In short, you want to position your property’s price between two “decoy” prices so that the buyer would naturally choose your property over the others.
What I have left out in that guide is that you will need to work with an agent in order to pull this off. Of course, if you’ve been reading GoodPlace for some time then you should know that building up a team consisting of trusted advisers should be the order of the day right from day one. If you don’t have any agent friends, then, go make some!
Your agent will then work on finding two co-broke properties to present to the home buyer together with your property. Now that you have got a set of “opportunities” to present to your buyer, what you need to do next is to sell, sell and sell!
Taking A Leaf Out Of The Guru’s Playbook
Now what I am going to share with you next is something that a my friend Scott (also a member of the Mentor’s Mastermind group) does, and may not be relevant to the weekend, mom-and-pop investor. However, I have no doubt that this also works on much smaller scale – i.e. you don’t have to have a portfolio of 50 properties to do something like this. Use your imagination and creativity – there’s only so much spoon feeding GoodPlace can do. 😉
Scott would probably be pissed at me for outing his method, but what the heck – after all, I’m all for healthy competition and creative destruction, and not to mention that he still owes me a hundred bucks over chor dai dee. Just kidding. I love the kid to bits, and he had explicitly gave me permission to share this.
So what ol’ Scotty does is that he targets neighbourhoods with relatively higher concentration of renters vs owners. (He told me where, but I won’t tell you here, sorry. But I might just create a guide to how to scrape renter data soon enough… keep your eyes peeled for a future GoodPlace home buyer guide.) His rationale? “Khai Yin, it’s simple. I can then get them to buy instead of rent!”
Now my initial reaction to him was a mix between disbelief and skepticism. But then again the kid’s inside the Mentor’s Mastermind group which meant that he was as legit as they came.
“Wouldn’t the people who can afford to buy would already buy the damn place already? Why would they choose to rent?” I had to ask the obvious.
Scott laughed. “I’m sure you already know this from your Mentor. Who are the best buyers to look for? First time buyers, darn it! And like any newbies in any field, these freshies don’t know nuts about buying property. They don’t known “good value” if it bites them in the arse. They are completely clueless on where to start, how to qualify for a loan and what works the best for them. And that’s where I can help them!”
Scott sure packed a lot of wisdom into this 29 years of age. I had to agree that most home buyers just wouldn’t do their homework – out of ignorance or laziness, or both.
“So pray tell, how do you help them, Scotty?”
He grinned. “Why, throw a free seminar, of course!”
Taking A Leaf Out Of The Guru’s Playbook
Something about the phrase “Free Seminar” would completely push my crazy button because well, as you know, I’ve developed a lot of distaste for property Gurus over the last two years since I first started GoodPlace. (For the uninitiated, Gurus routinely throw “free seminars” as bait-and-switch to reel in unsuspecting victims to be upsold to expensive training courses.) However, my stance against Guruism has since softened a little after I’ve met a couple of these Gurus who are not as scummy as they are commonly perceived to be. I’ll probably blog about this in the future, but suffice to say that my hate-o-meter has gone down from a red hot 10 to maybe a 7.
In Scott’s case, however, he throws free seminars with the purpose of selling his property, which is entirely ethical and by-the-book to me. After all, he discloses this upfront in the flyers and direct mail pieces that he sends out. He would rent a small hall that would fit around 20-30 people (for example, there’s one here at Setiawalk) for three hours where he would talk about the following:-
- A spiel about how stupid it is to rent instead of buy (which, for the record, I do not agree 100%)
- What needed to do to qualify for a loan for the first time home buyer
- How to generate side cash to save up for a down payment
- How to calculate the affordability of a property
- Buy my property!
Now as you can probably imagine, Scott has a couple of partners who would help him present sections of the talk for him: for example, his mortgage broker would help him with items (2) and (4) above, while a “make money online” Guru would speak on item (3). In the end (5), he will then make a pitch together with his agent – this is also where he presents his properties for sale together with the “decoy” co-broke properties provided by his agent. Do you see how it all come together now?
“But Khai Yin, I Have Only One Property To Sell…”
Then you gotta then up your game, son! 🙂 Now jokes aside, I want you to realize how much more leverage you can get when you build up your portfolio and treat this like a real business. Remember that you don’t want to be an ikan bilis in a sea full of sharks. Almost everybody starts small, but you can level up pretty quickly as long as you know how to team up with the right people. You can do it!