Negotiating a Property Investment Deal
For a successful property investment deal there needs to be a motivated vendor. Most people who have bought a few properties would have come across the odd vendor who says the want to sell (or they wouldn’t be on the market, would they) but who do not back up their action of listing with the motivation to sign on the dotted line.
To find out if the vendor is motivated a buyer needs to communicate with the agent and find out what has been happening in the past regarding the property:
- has it had any contracts
- did they fall over and if so, why
- how long on the market
- price reductions
- have they ever said they are in no hurry
- have they bought
- what are they going to do when they sell
- are they saying they “need $…..” out of the sale – this is one comment that is a giveaway because if the property has not been on the market very long sellers still believe that they will get their asking price (but the asking price may not be the true value of the property). Many sellers still believe that buyers should pay their real estate commissions and their bank loans! This misconception is one of the biggest reasons that offers do not get accepted
Now that you know the answers to these questions you can establish just how to put your offer in on a property. Considerations to take into account are:
- will you make a cash offer
- how long do you want for finance
- do you need time for any reno organising
- when will you want settlement
- how long do you want before going unconditional
- can the sellers rent back from you
- what other conditions will you put in the contract
When negotiating a contract it is not always about the money funnily enough. Sometimes there are other issues more important to the sellers than an extra thousand dollars or two. For example they may be building and need somewhere to stay for a few months and if they can keep living in the house then they save money on a move.
When you have all the facts give consideration to other factors that will sweeten the deal for the vendor and which may allow you to get the property at the price that you want to pay.
Filed Under: Investment Strategies
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