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Over the next five blogs I'm going to share my top five tips. My first is about negotiations. Everything is Negotiable - The more deals you do with property the more you will realize that anything and everything is negotiable.
Blogger: Andrew Allen, Allen Real Estate
“You don’t get what you deserve, you get what you negotiate.” - Dr. Chester Karrass
Often people don’t know they can ask for something besides a reduction in price because nobody has told them or perhaps they are simply unaware that you can ask for anything you like (within the law preferably if you don’t want too many adverse consequences!)
You frequently don’t uncover a seller’s true motivation until you test them.
Don’t assume anything said is correct, especially advice given by the agent representing the vendor.
Negotiate on Price
Asking price is always negotiable, often when people tell you it isn’t. Also if it isn’t negotiable now it might be in the future. Be respectful and be persistent, sometimes a selling agent won’t know the true motivations of the vendor themselves and will give you advice that might not be 100% accurate.
If you have done your homework on the property and purchasing at your intended price level will help with your investment goals then don’t be afraid of submitting an offer.
One strategy for advertising a property is to ask for over a certain amount such as “Submit all offers over $400,000” Sometimes the vendors actually really mean this and you can buy this property only for $400,100 or higher; but not on much better contract condition for the vendor for just a few hundred dollars less! Other times the stated price range will be meaningless and you can disregard to your advantage and submit the offer you are comfortable with.
Negotiate on Conditions
Price is an important part of any purchase but it isn’t the only component. Adding conditions and clauses to a contract of sale is where you get a chance to put your creative hat on.
One key element is time, if a person isn’t negotiable on price then you might be able to extract value by using time to your advantage. If you can extend settlement then that can be just as good if not better than a reduction in contract price.
A contract might have standard dates and times already inserted, why not look to change these? No rule exists why settlement has to be thirty or forty five days, try for something in between if required, thirty five day settlement will rarely cause a seller to complain compared to a thirty day settlement but gives you an extra five days breathing space.
Perhaps you are able to negotiate for the furniture to be included in the sale? Look for some angle that will let you create a win-win scenario.
The vendor had their property advertised for offers over $600,000. The owners were an elderly couple who had no debt on the property and were looking to down size, so they weren’t worried by settlement dates as much as getting ‘their price’.
We originally offered $575,000 but the sellers wouldn’t budge below $580,000. In the end we agreed to the increase in price but delayed settlement for 6 months which resulted in a large interest saving for our buyer as we were prepared to pay over $580,000 on a one month settlement. Both parties were happy with this.