Negotiating a good deal

[Brendan]

I am hoping to put an offer in on a property in the next few days, I plan on offering under the asking price since the market is a little slow right now, can anyone recommend any negotiation tactics that may be useful when trying to get the best offer on a property?

[JamesGG]

Hiya,

One of my past lives had something to do with being a real estate agent.

*reminisces*

Interesting days. Learned an awful lot, though, fantastic experience.

The most important thing, IMO, is to understand that price is not everything.

Play price vs terms.

If you want a low price, you might have to concede on the terms offered. By concede, I mean find out what the vendor wants (how? ask the agent!) and make a point of meeting those requests.

For example, if they need a short settlement and don't want to run the risk of finance falling through... give them 30 days unconditional. And, ask to pick it up for a low price in return.

For whatever it's worth, many properties are sold for under listing price, even in boom times. Don't be afraid to ask for what you want, and, don't be afraid to walk away from a deal if you can't get it.

I know you're on the Somersoft forum, too, so maybe throw some questions or run a search in that general direction if you've got a moment.

Good luck with it mate!

Cheers

James.

[JamesGG]

One of my past lives had something to do with being a real estate agent.


Hiya,

I found a pdf article (http://www.houseofwealth.com.au/HOW%20Property%20Buying%20Tips%20From%20A%20Fellow %20Investor.pdf) just recently that I wrote a couple of years ago, that may or may not be of some use, too.

Good luck with it, mate. Let us know how the negotiations go...?

Cheers

James.

[Slade]

Great advice James! One thing I always wanted to know, how do you know a Real estate agent isn't lying?

I had one mate who was discussing offers, with an REA and why the vendor wanted to sell and all he got back from the agent was the responses that would entice him to put in a higher offer and offer as soon as possible.

Things like '.. yes, there have been lots of offers, all above $xxx, so in order to secure it you will neede to offer above that.. '

How did he know this was a lie? well he offered below that with standard terms and his offer was accepted.. the REA was pretty red faced..

[Brendan]

Well I put the offer in about 3 days before the auction, it was below the reserve.. so they didnt accept the offer and decided that it was so close to auction that they didnt want to counter-offer nor negotiate.

I am still in London so I was not in a position to go to Auction.. so missed out this time ..

There are plenty more properties to choose from hopefully!

[JamesGG]

Hiya,

Thanks, mate.

Great advice James! One thing I always wanted to know, how do you know a Real estate agent isn't lying?

When his mouth is shut. ;)


I had one mate who was discussing offers, with an REA and why the vendor wanted to sell and all he got back from the agent was the responses that would entice him to put in a higher offer and offer as soon as possible.

Things like '.. yes, there have been lots of offers, all above $xxx, so in order to secure it you will neede to offer above that.. '

How did he know this was a lie? well he offered below that with standard terms and his offer was accepted.. the REA was pretty red faced..

Unfortunately, there is not a lot that you can do in most cases to verify the agent's stories. This is why it is important to know exactly what you are happy to offer and to play your cards close to your chest in the meantime.

Unless the agent has written instructions from the vendor to the contrary, they must present all offers. So, your first offer should be at a level where you are not going to offend the agent or vendor (who may become difficult to work with afterwards), and with enough room to negotiate if it is not accepted.

If you have complete confidence in your knowledge of the property and the area, then you will always know when enough is enough and when to walk away. This confidence will mean that you can always make good decisions without doubting or second-guessing yourself.

Cheers

James.

PS - Really, you cannot blame the agent in your story for trying to entice a quick, high offer - this is what he is paid to do!