What should my strategy be for this property negotiation?

Discussion in 'The Buying & Selling Process' started by NewToThis123, 23rd Oct, 2019.

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  1. The Y-man

    The Y-man Moderator Staff Member

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    I feel you are being a bit harsh people. I generally poke at 10% below the lower end of the asking range and see what the reaction is from the agent.

    I don't think that the vendor will be offended as such because:
    1. if there is no chance the vendor will take it, the agent will not forward the offer (and will tell you so)
    2. if the agent does take it to the vendor, then I say there is actually a chance they will take a low one.
    The Y-man
     
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  2. propernewb

    propernewb Well-Known Member

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    Interesting....

    Why would the agent not forward on an offer?
    Would it be best to just sign a contract with the proposed amount and hand that to the agent to ensure your offer is considered?
     
  3. Marg4000

    Marg4000 Well-Known Member

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    We have bought properties with a single offer (signed contract, deposit cheque attached) - “this is our best and final offer”, basically take it or leave it. Usually worked best when a contract had just fallen through.
     
  4. The Y-man

    The Y-man Moderator Staff Member

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    I think it was @kierank who posted something recently about a "perceived win-win"
    That's why I asked about sweeteners.

    In our modus operandi:
    1. go to opens, look at levels of interest
    2. ask for a section 32 (in Victoria this is the vendor disclosure/contract paperwork) which signifies you are interested and "in the game"
    3. ascertain finances and estimated value of property from broker
    4. do a B&P and any other report if needed (this is so you can go unconditional if needed)
    5. call agent, start talking "am interested" and "looking at offering around <$lowball>"
    6. At this point (essentially where @NewToThis123 is at) agent my say "no way" (not passed onto vendor as formal offer not made re question from @propernewb ). At this point, you may counter with a "at what $ could we start talking?" and see if the figure that comes back is something you can play with or walk away.
    7. If the agent's response is "come to my office", it's time to negotiate. This is where you start edging your offer up (if this was your plan) or offer sweeteners ("I know it's low - but I am going full unconditional, waiving cooling off" etc). If you get to a figure the agent can take tot he vendor, sign the dotted line with an expiry.
    The Y-man
     
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  5. Dan Wood

    Dan Wood Well-Known Member

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    And that's just a massive waste of time for both the vendor and agent, especially of you do this multiple times..

    The vendor doesn't care, they've listed it at 800k for a reason.

    [Edit] if you kept creeping 5k over 5 attempts I'd tell you to forget it, it'll just be a waste of effort on everyone's part.
     
    Last edited: 23rd Oct, 2019
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  6. Dan Wood

    Dan Wood Well-Known Member

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    Vendor: no lower than 800k
    Vendor: I don't want see under 780k
     
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  7. Depreciator

    Depreciator Well-Known Member

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    Agents are pretty thick skinned, so they are not going to be insulted by a low ball offer. They would get them all the time. But they would not take it seriously, either. When they report in to the owner, they will likely tell them some bozo put in a silly offer and they will both roll their eyes and have a laugh about it.
    If the property has just come onto the market, it's early days and they are trying to get feel of what the market values the property at. The market will determine the value, so there isn't much point you doing research and emailing a justification for your revised offer.
    You said you are not attached to the property, so keep half an eye on it and keep looking for other properties. If they are doing regular opens, go along and let them take your name and number so they know you are still a bit interested.
     
  8. The Y-man

    The Y-man Moderator Staff Member

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    Yep - as a vendor, exactly what happens over the kitchen table for the debrief.

    The Y-man
     
  9. thatbum

    thatbum Well-Known Member

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    This is the part that I generally don't agree is a "thing" - so called wriggle room for negotiations. How is that persuasive in convincing a vendor to agree to a lower offer exactly?

    Often I personally aim for a one-two offer strategy to secure a property only, and usually the difference the two offers is something like a few thousand $ only, or even no difference in price - just better conditions.

    I'm not suggesting its the only way to do it, but the advantage doing it this way is that you have credibility when your offers are within a reasonable range and you show consistency with that approach.

    I imagine doing it my way would mean you would have better credibility for an email or sales evidence approach, rather than trying to mix that into lowball/haggling style negotiations.
     
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  10. broc119

    broc119 Member

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    What is the "one-two offer" strategy?
     
  11. Archaon

    Archaon Well-Known Member

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    Solid offer then mild sweetener it seems.
     
  12. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Where you make 2 offers on the same place with different condition, eg
    Offer 1: $500k unconditional with 60 day settlement
    Offer 2: $520k subject to finance and 90 day settlement
     
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  13. See Change

    See Change Well-Known Member

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    I have no problems with a low ball offer .

    Esp if it's been on the market for a month with little interest .

    I wouldn't try to justify your offer . That sounds desperate . The owner knows ALL of the flaws in the property . The agent knows the Market .

    Agents are never insulted by low offers though they may tell you they are . In NSW they have a legal obligation to pass on offers and I've reminded agents of that obligation in the past .

    If you want it I'd do either
    • come back with your highest offer - if you really want it and think it's good value at that price .
    • Tell the agent " you're interested but think the owner is unrealistic so come back if there's any interest , in the mean time your looking at other properties "
    Cliff
     
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  14. Empire

    Empire Well-Known Member

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    If it's a buyers market, eg perth , you can low ball all day. Who cares if they get offended. The market dictates what the property is worth and in this instance you may be the only market participant.

    If it's a sellers market, eg Sydney, them I'm afraid you may need to sharpen your pencil.
     
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