Before you make an offer on your next property, here are a few things to consider, that should give you the upper hand in negotiations:
· Always substantiate and provide explanations for
your offer. Point to any defects in the property and if you have to make
counter offers, employ the same tactic. This affects the sellers’ expectations
of what you are prepared to pay and softens them up when they make a
counteroffer. Use facts and figures if necessary, especially if it is going to
cost you more money to fix defects etc
· Don’t try and low-ball the seller as this can
cause insult and they could even refuse to deal with you. The amount of your
first offer should be a balance of securing the property at the best possible
price and presenting a credible offer to the seller without being offensive.
· Increase your counter offers in small
increments. Each offer should go up in decreasing increments so as to suggest
to the seller that you are running out of options and that they may miss out.
· Convey a sense of authority if you are going to
use stalling tactics and rather than say, "I need to check with my husband or
wife” say "I need to check with my fellow director/business partner.
· Agents tend to operate on the principle that the
less conditions and matters in your offer, the better the chance of having your
offer accepted by the seller. From your perspective as a buyer, the more
factors your offer is subject to, the better, ie finance, building inspections
· Make the contract subject to a valuation by
adding a clause to your offer. If a valuation does not reflect the purchase
price, then provide it to the seller and ask for a reduction.
· Don’t offer a big deposit as this will undermine
your power if you try to include conditional clauses in your offer.
· Be sincere with your offers and avoid phrases
like "take it or leave it” etc.
· Always tell the agent that you are looking at
another property through another agent so that they will pass it on to the
vendor- it gives the impression that you are not too keen and levels the
playing field a bit.
· Once you have made an offer, wait for the seller
to respond. Never show impatience and if necessary, just walk away. Don’t make
another offer- they will just take advantage of you.
· Don’t make any concessions in negotiation
without getting something back in return.
· Always take your time and try and make the other
party feel like they are also getting a good deal.
· If you are negotiating on behalf of a team,
don’t let the seller try the ‘divide and conquer” rule. Ensure that all the
negotiations are through one person as the spokesperson.
· Never get personal with the property or seller.
Avoid terms like "demolition job” or "dump”, it will just turn the seller off.
· If you are dealing with a seller who is a tough
nut to crack, the best approach is to create doubt about their valuation of the
property. Use comparative sales data or access reports from independent
· Always be ethical even if you are faced with
unethical behavior from other parties- just because they want to roll around in
the mud, it doesn’t mean you have to join them.
Want to learn more
about Managing your own Investments and increasing your return?
Use RealRenta for Free
for up to 2 months and see how easy it is.
You will never pay a
Property Manager again!
Start your Free trial
Need a property loan?
Contact us @ firstname.lastname@example.org
Thursday, 29 August 2019