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Gold Coast negotiation

Discussion in 'The Buying & Selling Process' started by Leo2413, 31st Aug, 2015.

  1. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Recently a very good mate of mine asked me to help him secure an IP he wanted in the gold coast, an inner suburb with 700-800k homes in the street around. As a wedding gift to him I said i'll help him. After I knew what he was looking for, his budget etc I did some DD and eventually made some verbal/written offers with agents on 6 properties. They were pretty much all the same in terms of size, features, locations were few streets apart in most cases. condition of the homes were rentable with room to do a cosmetic reno. Offers varied slightly according to what I felt was slightly superior or inferior.

    1. Asking 530k, we offered 420k (really would pay 450k) Rejected
    2. Asking 500k, we offered 410k (really would pay 430k) Rejected
    3. Asking 510k, we offered 420k,(really would pay 440k) Rejected
    4. Asking 550k, we offered 430k (really would pay 455k), Rejected
    5. Asking 490k, we offered 405k (really would pay 430) Rejected
    6. Asking 495k, we offered 415k (really would pay 440k) Got a bite

    Deal six the agent came back pretty much saying that the offer was a bit low and the vendors asked if I had any other better offer. (music to my ears). I asked the agent if there was any better offer put forward and he, too quick to speak, said we are the only offer at this time...(wtf I'm thinking there's nothing wrong with this property.) . Long story short the vendors had some bad luck with regards to 2 times they tried to sell and both times finance fell threw (more music to my ears) both from young couples. He also said the vendors would also like a 6 month settlement because they needed to live there as they are planning to move overseas and want piece of mind of having sold and they found it really hard to get interested parties to agree to that. (music in my ears playing louder). I said to the agent yes I can understand most people just cant wait for 6 months. They were also worried about how the economy/property market is going (one of the doomsayers, so I accentuated that to him quite a bit after hearing that). After some banter forward and backward he asked me if I can better the offer. I said to him, mate to be completely honest its right at our budget that we are comfortable with and we are already financed approved so definitely no finance issues I can assure you, so the vendors should not be anxious about that . We wont be backing out of any home we are looking at now and we are looking at 2 more and to be honest all 3 properties are acceptable for us to buy(actually just got rejected 5 times) I may...just may be able to help you extend settlement to 4 months if that can help the vendor (actually for us the longer the settlement the better).

    So long story short, I rang the Agent that night to tell him unfortunately we are just unable to increase our offer but the great news is that we are able to extend to a 7 month settlement!! to really help the vendors, but we need certainty because we really like another place and we don't want to lose it (simple bluff) so we need an answer by Friday (time pressure), it was Thursday morning. Agent came back saying vendors accepted offer of $415,000 on a 7 month settlement which he said really "tipped it" for them. I estimate conservatively its at least worth 470k.

    Buyer super duper happy, Vendor Happy.
     
    Last edited: 31st Aug, 2015
  2. Azazel

    Azazel Well-Known Member

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    Ouchie! Nice one, thanks for giving us the details.
    Looks like there are still bargains to be had around the GC.
     
  3. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Hi @Azazel yeah the GC is not my thing really but that's where he wanted to buy so I don't argue. But I do think when compared with similar sales and the add value ability, he got a steal. I think the vendors were already emotionally battered with 2 buyers falling through on finance. Actually when the agent asked for a better offer I said we are finance approved and don't want to have any finance issues so please let the vendor know that. Truth be told finance was obviously never an issue. He actually wanted to increase the offer to 425k but I let him know his position is superior on a few fronts and said stay strong (he's quite the nervous type). He thinks its a crazy game and wouldn't operate that way, but he was more than happy with the subsequent result. lol. go figure.
     
    Last edited: 31st Aug, 2015
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  4. Azazel

    Azazel Well-Known Member

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    Geeze, he probably felt bad for the sellers, increase it just to make himself feel better ;)
    I feel sorry for the seller, but someone is going to buy it, and they can move on after the distress of the other 2 falling through.
     
  5. Leo2413

    Leo2413 Well-Known Member Premium Member

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    I agree with you @Azazel re feeling sorry for the seller. But the seller is never my primary focus. I often hear about win-win deals.

    I gotta be honest I don't believe in them. I believe in win --vendors feeling like won deals. I always try to remind myself this is business, not personal.
     
  6. Azazel

    Azazel Well-Known Member

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    Yeah, I don't feel like I need to screw someone against the wall and I don't get any pleasure from someone elses heartache, but the best deals for me have been the ones where someone else has lost out. And the more they lost out, the more I gained.
    Win - vendor feels lucky to have even gotten that deals (I think I get what you mean).
    Depends on the market. And they don't have to sell.
     
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  7. Leo2413

    Leo2413 Well-Known Member Premium Member

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    I too take no pleasure in being tough. But its business.

    And if you think about it, it makes perfect sense. You (most often) cant do really well unless the other person is going to do poorly. Now they can THINK they got a good deal or feel happy with the result (and I try my best to leave them with this feeling), . But 9 times out of 10, the person who got a great deal really did so because the other party in reality lost out in the negotiation, for whatever reasons.
     
  8. S.T

    S.T Well-Known Member

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    I'm not selling anything
    You should get your QLD Real Estate license and become a buyers agent, nice work!
     
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  9. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Hi mate, god knows the deals I've done for people over the years I could probably put down a few deposits on ips if I charged a BA fee :D