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Negotiating Tips?

Discussion in 'The Buying & Selling Process' started by Kael, 19th Jun, 2015.

  1. Kael

    Kael Well-Known Member

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    Hi all,

    I've always been curious about negotiating and the best way to go about it. I've been told that pointing out negative traits about a property can benefit you when negotiating with real estate agents or owners, but does anyone have any tips on the best way?
    Does anyone use a specific "percentage" to reduce the offer to from the listed sale price?

    Love to hear peoples thoughts, incase I go for another property in the future!
     
  2. Brady

    Brady Well-Known Member

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    Finding out as much information as possible.

    - Why the vendors are selling
    - how long has the property been on the market
    - has there been any offers, if so why were they not accepted
    - does the vendor have preferred settlement terms
    - etc

    Once you have extracted the as much info you should be in a position to put your offer forward with the best chance of success. I've been successful being when I didn't have the best price on a coupe of occasions as my terms met the vendors. Also I like to set expiry dates on my offers, puts the pressure back on the vendors
     
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  3. Coota9

    Coota9 Well-Known Member Premium Member

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    Karl,

    Really depends on how the market is currently performing when you are trying to negotiate.
    There are plenty of sites that list the average discount achieved off listed price,but the best way to negotiate any market is knowing that market inside and out..
     
  4. Singo

    Singo Well-Known Member

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    There are a few recent books on this topic.

    * How to succeed in Property Negotiations by Margeret Lomas
    * Property Investor's Guide to Negotiating by John Potter

    I hope this helps.
     
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  5. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    If relevant (e.g. negative traits are defects, damage, wear and tear), have "multiple" offer options.

    Like:

    "I'll buy a x price with condition repairs are done to x, x, x and x is replaced" or
    "I'll buy a x lower price if as-is due to x, x, x and x."

    And don't forget rapport building too. It's quite important.
     
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  6. Mick C

    Mick C Well-Known Member

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    Depending on the situation and property type different technique can be employed, so no "sure win technique".

    However the most common one that i use is the " Eddie Mcguire "

    Listed price is: over $600,000
    Buy for $630,000 ( for example)

    Do Pest inspection and building ( there's ALWAYS something wrong lol) Or valuation is short...lets do he val is short issue ( say valuation is $600,000)
    Go back to agent and use the Eddie Mcguire

    " There's a problem with....I'm wiling to meet the vendor half way or to keep it simple take $10,000 reduction and it's a done deal"

    1. You have given the agent 2 options - both options im happy with! i reduce price by $15,000 or $10,000.

    2. i do NOT provide a yes or no question...A common mistake ppl make is to say " There's a problem....we want to reduce the price by $10,000" - there's only 2 answers - yes or NO....big mistake.

    It doesn't always work, but doesn;t hurt to try....i have used this Eddie Mcguire for over 100+ negotiation ( for myself and my clients) and it works 50% of the time.
     
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  7. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Another good book is "Trump style Negotiation" - Powerful strategies and tactics for mastering every deal.

    It was mostly written by his principal negotiator for many years, George Ross.

    Another good one is "Negotiating Secrets" by David Brown.

    I believe learning to be a skilled negotiator will save investors hundreds of thousands over the years and shorten the time it takes to achieve their goals. Its an area seriously worth studying for hardcore serious investors, IMO.

    This is one of the beauties of using property as a vehicle to create wealth. Its an uneven playing field that we can have the house edge! The more determined, focused, skilful and knowledgeable player will beat the others a lot of the time. Much like poker.
     
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  8. Kael

    Kael Well-Known Member

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    Thanks everyone for the replies, learning lots! :) I'll take a look at the books mentioned.
     
  9. Rixter

    Rixter Well-Known Member

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    It's all about asking the right questions and reflective listening to the answers.

    Ultimately you looking to identify what points are motivating the vendor.

    Then pitching your offer to hit the vendor's HOT buttons and doing it in such a way to so as you appear (to them) to be going all out to helping them.
     
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  10. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    This is such a good point.

    Whilst money is generally the primary motivator - there can be other factors that motivate....which you can only found out by asking the right questions.

    It could be a long/short settlement, a rent back period - who knows.

    With my recent PPOR - I'm pretty sure the elderly owners weren't overly keen on selling it to someone as an investment. When they found out that a young family was going to buy it, and live in it, they seemed more receptive to negotiate :)

    Cheers

    Jamie
     
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  11. No Probs

    No Probs Well-Known Member

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    A great question that will no doubt help many people including myself!

    Nathan Birch posted a good video on YouTube a few days ago called 'How to negotiate like a pro' - take a look.
     
  12. Azazel

    Azazel Well-Known Member

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    Haha, I like it. Must practice my Eddie McGuire impersonation and give it a go.
     
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  13. rajorich

    rajorich New Member

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    cross counting recent sales with distance and number will also break the initial defence line a selling agent has created , look for past on-market history , is property as passed an auction- that's a bonus !!
     
  14. Jerry O

    Jerry O Well-Known Member Premium Member

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    i always try to achieve a win-win outcome in every negotiation (not just property). i know sometimes its not always feasible to achieve a win-win outcome. I always think that by achieving a win win outcome in this one deal, the next deal with the same person would be a whole easier. i may not be buying from the same individual ever again, but i always aim to establish a good relationship with them. so as pointed out above, asking relevant questions and gather as much information from the vendor's side is of paramount importance for me.
     
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  15. Kevin Lam

    Kevin Lam New Member

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    In negotiations, 90% of the time you can create a win-win situation. This can only be achieved by building rapport with the vendor and understanding their motives for selling and what would prompt her to sell - again this goes down to asking open-ended questions and just being genuinely interested in the other party. In all negotiations though, I try to prepare as best I can (like a REA would when his pitching for a property to sell)
     
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  16. Cadbury99

    Cadbury99 Well-Known Member

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    Never ever put in an offer by referencing the asking price as some people ask far more than a propery is worth. You have to do your homework and try to ascertain the value from comparative recent sales.

    When negotiating don't forget to take the RE into account, if you can get them on your side (at the end the day they get paid if they get a sale regardless of price) they may be able to talk the vendor into taking your offer.
    For example you may be able to persuade the agent to tell you something that would sweeten the deal other than price.
     
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  17. MTR

    MTR Well-Known Member Premium Member

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    My best buys have always been dumb luck, dealing with a re agent who is working for you, not the buyer.

    I can't believe how many of these are around. I have purchased 3 properties in the last 2 years, with most recent in Melbs hot market 2 weeks ago, and I estimate at least 100k+ under market/true value.

    I always pay cash, want it signed off by vendor on day 1 as I have another property on my agenda, quick decision and Give them property management.

    Warning... This has an expiry date, when the dud agent realizes you won't give them any properties to sell.. You are done and dusted, find another

    Mtr:)
     
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  18. andrew_de_a

    andrew_de_a Active Member

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    I think the advice to only bid when on the market is very dangerous and I wouldn't endorse.

    If the property passes in and you are not holding the bid then you do not hold the right to negotiate with the vendor in the first instance.


    You want to be holding the bid if the property is passed in.
     
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  19. Big Will

    Big Will Well-Known Member

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    So if the property you believe is 500k (even got a valuation saying 480k) and it is on the market at 400k you wouldn't bid at 440k?

    Yes I do believe you will generally find better deals when the property doesn't sell at auction however you can still find good buys when it is on the market.

    The advice of not bidding when on the market would be suicide for a no reserve auction, surely you would bid $1 on this house?
     
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  20. B-Man

    B-Man Well-Known Member

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    @Big Will
    i think your looking at it wrong.
    Andrew is saying bid before its on the market dont hold out until it is on the market.
    that way if it passes in and your the highest bidder you have the right to negotiate with the vendor.
     
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