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Hardball Negotiating Tactics (To Buy)

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

  1. Bullion Baron

    Bullion Baron Well-Known Member

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    I would like input on (legal) ways to condition vendors into accepting low offers. I'm sure such tactics are unlikely to be successful in a hot market like Sydney (currently). I guess some types of sales that these tactics would be best directed at:

    - Property that's been on the market for a long time or where stock typically takes a long time to sell
    - Market where there is a lot of other similar stock available
    - Market where prices are outright falling (e.g. Perth)
    - Property where the vendor is motivated by personal circumstances (mortgagee, divorce, etc)
    - When vendor has owned long term/has no or low mortgage
    - Targeting inexperienced real estate agents

    I also found this which may be a good starting point:
    http://www.factoradr.com/docs/How To Use & Defuse Hardball Bargaining Tactics.pdf

    Some thoughts of my own modelled on the above (and those I've heard in the past):

    Have other people (friends or people you've hired for a small fee) submit ridiculously low offers on the same property, before coming in with your own slightly higher offer.

    Highlighting the property's negative points when making the offer (I would offer X amount, but given the cost it will take to fix X and X, I can only offer X).

    Take it or leave it offer (I can offer X, this will be my final offer).

    Use finance as a cap (My broker advised I can only borrow up to X, hence that is what I'm offering).

    Time sensitive offer (My offer is X, it will need to be accepted within 24 hours as will otherwise be placing an offer on another property).

    Offer that is conditioned to another not being accepted first (I have submitted offers on property X & Y, first to be accepted by email or text will be successful).

    When buying with more than 1 person, ensure the agent/vendor has the impression that only 1 party is confident about the purchase (the other shows lack of interest, highlights the issues they have with it).

    Making an offer subject to condition of a building report, use the report to rescind on the offer and submit a lower one as a result of any faults (however petty).

    Anyone else have further ideas (that have worked or even those you think may be successful in the right scenario)?
     
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  2. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Great list in the article.

    your ready for war, (or a slaughter it seems:D).
     
  3. Bayview

    Bayview Well-Known Member

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    They're all great ideas.

    One you missed was "unconditional" - no finance, pest or building inspection....and a short settlement on top.

    In the end, unless the seller has to sell; it won't.
     
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  4. Azazel

    Azazel Well-Known Member

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    A good one, another variation is adding that you have offers on multiple properties and that the 1st to come back to you has a sale.
     
  5. Leo2413

    Leo2413 Well-Known Member Premium Member

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    "Higher Authority".

    I always let the REA think i'm a 2 or 3 party buyer. I'm always the good one and 'the others' are the bad ones when I don't want to make a concession or limit the concession. Allows me to keep good faith and keep the politeness with the REA, as well as letting him know I am trying my best to convince the others etc. It also to an extent I feel helps me to gain their trust and empathy. I always try to make the impact on the REA because they are the one going to relay your offer back to the vendor. Exactly how they relay it can have tremendous power, either for or against your positon. imo.
     
    Last edited: 31st Aug, 2015
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  6. S.T

    S.T Well-Known Member

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    I'm not selling anything
    Offer to pay your deposit in gold bars?
     
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  7. Be Developer

    Be Developer Property Developer Business Member

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    Deceptive or reality?

    What happens at time of signing the contract??
     
  8. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Sometimes it actually is more than 1 person so its true. Other times its not. I just say they are silent money partners. Its never an issue. I wouldn't call it 'deceptive' i'd call it strategy. If it were deceptive then most people in this property game are 'deceptive'.
     
    Last edited: 31st Aug, 2015
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  9. HUGH72

    HUGH72 Well-Known Member

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    Leo or nominee maybe? Then later change via your conveyancer/solicitor prior to settlement depending on the state.
    Sometimes you might not be sure which names the investment will be in without further advice?
     
  10. Leo2413

    Leo2413 Well-Known Member Premium Member

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    I just keep it simple and say there are 1 or 2 other partners involved. If the agent presses for details I just say they are silent money partners, I've never had an agent push further than that really.
     
  11. Bayview

    Bayview Well-Known Member

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    Agents aren't silly and probably hear this one (and every other one listed so far) every day and ignore it for the most part, but then go away and have a bit of a chuckle back at the tea room.

    Some of the stuff I heard in my short 3 months in the game was hilarious....on both sides of the transaction.

    My hat is off to agents for what they have to put up with.
     
  12. Leo2413

    Leo2413 Well-Known Member Premium Member

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    @Bayview I don't think generally agents are silly, but I do think there are many average agents out there who are not seasoned. They are not so hard to use tactics on. I have drawn some key information from agents time and time again. Some of the older seasoned ones stop me in my track and then I have to adjust strategy. But like in any profession, only a small percentage are turned on, then a large middle majority are average, then the rest border incompetence. The odds are stacked in the favor of investors who know how to negotiate well and have a range of strategies/tactics to employ. that's been my experience and some of my friends have experienced similar.
     
    Last edited: 1st Sep, 2015
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