Join Australia's most dynamic and respected property investment community

Tips to Negotiating Counteroffers

Discussion in 'The Buying & Selling Process' started by Leo2413, 23rd May, 2016.

  1. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,715
    Location:
    Sydney
    I like his overall tips and approach and I think he's pretty much spot on. Thought I might share, others may like to watch. He does speak pretty quick though.




     
    HUGH72, Touristy, Gockie and 3 others like this.
  2. Gurtofen

    Gurtofen Well-Known Member

    Joined:
    13th Jan, 2016
    Posts:
    94
    Location:
    Adelaide
    @Leo2413 Based on this guys tips, if you were to identify a property you were keen on purchasing, what info would you need/find out prior to making your initial offer?

    I get you would do your due diligence etc. but what data would you specifically research and target and what questions would you need/like answered by the seller's agent etc.?

    Do you have a checklist so to speak?
     
  3. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,715
    Location:
    Sydney
  4. markson

    markson Well-Known Member

    Joined:
    14th Feb, 2016
    Posts:
    310
    Location:
    NSW
    Thanks... going through this right now.

    Any tips on if they don't counter offer? They just reject the offer "Thanks, but no thanks"
     
  5. dabbler

    dabbler Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,665
    Location:
    Sid en e - olympic city
    I have had this a few times.

    With one, I called up the agency, someone else answered, said I put in an offer & got a no, explained that if the seller wants to sell, I expect them to negotiate, not go dead, this kick started things again.

    Another one I got call back, offer declined & nothing else, agent was a bit lazy, I left it for a week, decided to up offer, wrote the reasons why etc, copied to the office e-mail in case agent was away, few days later another call with a yes.

    In a busy sellers market, your probably going to have to call the agent and get the lowdown from them, if your offer is way too low, let the agent tell you why & see if you maybe missed something, ask them if the vendor will negotiate and what the agent thinks will get the deal across the line.
     
  6. markson

    markson Well-Known Member

    Joined:
    14th Feb, 2016
    Posts:
    310
    Location:
    NSW
    Yeah I am struggling with this agent.

    Example:

    House on the market for $359K. I know the contract has crashed a couple of times, last time it was $351K. So I started at $340K (yes I low balled). Got a thanks but no thanks. OK no worries. Came back at $346K with my reasons why. Now the agent is telling me he hasnt got an answer back from the vendor yet (been over 24 hours).

    My guess is they are hoping someone else will come in with a higher offer, or they are working on another offer. I am happy to pay $350k but I dont want to go in with my final before a counter offer.
     
  7. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,715
    Location:
    Sydney
    I would put a time limit on it. I would ring up the agent to tell him you have another place you are happy to buy but you prefer his property a tad more. Depending on the agents reaction/feedback you might want to say you can go final offer 348k (as long as you know its still a good deal at that price) but there is a 24 hour dead line after which point you will definitely be signing the other property's contract. If you hear nothing in 24 hours you know your wasting your time and I would just move on. Just one approach of many.
     
  8. markson

    markson Well-Known Member

    Joined:
    14th Feb, 2016
    Posts:
    310
    Location:
    NSW
    Thanks @Leo2413. I will give that a crack. I want it wrapped up today either way.
     
  9. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,546
    Location:
    Melbourne, Australia
    Time is a very valuable thing most do not use in negotiating and I am not talking about time the offer is valid.

    He who speaks first loses.

    Using the Negotiation Tactic of Silence

    @markson From my perspective you have put yourself in a weaker negotiating position by submitting an offer then submitting another. The REA and vendor now know you are keen to buy and can counter at a higher price than before (if they come back).

    If when they came back with a no at 340k and you said thanks I will keep looking but if something develops let me know as I may not have bought yet but you will be buying. You have now made them come to you so they will speak first and if they come to you they may or may not have another offer and if there isn't another offer how strong is your negotiating position?
     
  10. Mick Butterfield

    Mick Butterfield Well-Known Member

    Joined:
    15th Jan, 2016
    Posts:
    408
    Location:
    Bermagui NSW
    Can vouch for the power of silence. It works as an agent when both dealing with vendor and buyer. Present the offer, then SHUT UP!... Present the counter offer, then SHUT UP!!! You would be amazed how effective it can be. I have only had it from a buyer once in my time, was on the phone for about a minute in silence haha.

    In regards to counter offers and negotiation in general I would say that you should never make a concession without asking for one in return. The Japanese are great at this. They never say no in a negotiation (eg. yes we will accept $340,000 for the house, if you through in your first born otherwise we will sell it for $365 and you can keep your child :) ) obviously a very simplified example, however, it is very successful at creating a win win outcome.

    In contrast a lot of people feel that an adversarial form of negotiation is effective. While it can get a good outcome at times it also raises the likelihood of a win lose outcome, for me this is never a desirable outcome.
     
    Leo2413 likes this.
  11. markson

    markson Well-Known Member

    Joined:
    14th Feb, 2016
    Posts:
    310
    Location:
    NSW
    Thanks @Big Will and @Mick Butterfield I am still learning the ropes. The market is a bit hot in the area at the moment which isn't helping

    I advised the agent that I needed some followup on my offer as I have another place to buy but prefer theirs a tad more.

    Agent claims he cant get in touch with buyer, but the buyer that submitted an offer that previously crashed has apparently now got their finance sorted and they will be making a higher offer with no conditions.
     
  12. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,546
    Location:
    Melbourne, Australia
    If you are buying as an investment play your own game don't worry what others are or maybe doing.

    PPOR are emotional so it is a lot harder to take emotions out.

    Learning to separate emotions from financial will help you a lot with negotiations.
     
    mouseburger and RedMarty like this.
  13. Mick Butterfield

    Mick Butterfield Well-Known Member

    Joined:
    15th Jan, 2016
    Posts:
    408
    Location:
    Bermagui NSW
    +1
     
  14. markson

    markson Well-Known Member

    Joined:
    14th Feb, 2016
    Posts:
    310
    Location:
    NSW
    Thanks guys, well I have hit my limit. They have accepted the $4k higher unconditional offer. Next........

    Thanks for the tips... it was good practice for me and I have learnt alot
     
  15. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,715
    Location:
    Sydney
    I think overall it depends on the merits of the deal. While I agree with the others above re offering and then being silent, sometimes that isn't the best approach. I'm sure more deals will come.
     
    Last edited: 27th May, 2016
  16. markson

    markson Well-Known Member

    Joined:
    14th Feb, 2016
    Posts:
    310
    Location:
    NSW
    Yeah being a hot market isn't really helping me. Agents don't seem to be in a rush... they know properties will sell in 2 weeks,
     
  17. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,715
    Location:
    Sydney
    That's one of the main difficulties in 'hot' markets, right from the 'get go' you have a negotiating disadvantage, and often negotiating styles need to adapt.
     
  18. markson

    markson Well-Known Member

    Joined:
    14th Feb, 2016
    Posts:
    310
    Location:
    NSW
    Any tips for negotiating in a hot market?
     
  19. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,715
    Location:
    Sydney
    If the market is really hot?

    Yeah -- stay out. :D
     
    mcarthur likes this.