No Nonsense Property Offers to Purchase. Do not act like you are buying fruits at your Sunday farmers market... 

08/05/2020 06:05
Contrary to much given advice on the subject matter of offering to purchase any real estate, residential or commercial  property, we don't believe in the popularly advised so called negotiation tactics, "knowing how to talk down a price is an integral part of the profession." A lot of time is wasted with these so called tactics and ultimately focus on other profitable use of professional investors limited time is mis-directed. 


Many situations arise where homeowners or agents overvalue a property to such an extent that it is more than likely the norm than the exception unfortunately and whilst its surprising how many seem to believe it can be hard to have a conversation about how much the property is actually worth, there is a very simple solution to this minor obstacle. 


Whether the property is overpriced due to inexperience, a lack of understanding of the market, or simply someone hoping for the best, your role as a value focused real estate investment professional is NOT to help guide negotiations to something reasonable for the people involved but rather simply WIN, WIN, WIN! Anything other than WIN, WIN, WIN will more than likely resulted in wasted hours, days, weeks or even months. Take a hint from Warren Buffet's Value Investing Simple & Effective strategy.   

We aim to deliver much needed capital for SME’s and Property Developers.

1. Use Objective Market Data 

The best way to frame a negotiation is the buyer and seller working together to establish a fair market value based on third-party, objective market data and current economic as well as political climate. 


Being indignant or haggling over price only serves to put the seller in defensive mode. If comparable sold property date is carefully chosen and sound fact based arguments are made for their inclusion, it doesn't need to get emotional or haggling contest. 

2. Invest for the long term 

As an investor, you should be making money at the point of purchase NOT some unknown future date. Your initial offer MUST always be 20-30% less than seller/vendors target asking price and must be backed-up with appropriate market data. Whilst many sellers will bury their heads/ frown at your "serious offer" and prefer to wait for the next possible buyer who will over-pay, you must every 30 days or so, check in and remind the vendor or agent of your still standing serious offer and ready to complete transaction within 8 weeks. Such an approach will definitely work best for you, as it allows you to win when at the point you acquire the property with the future even brighter. 

3. We all know that Cash Is King. Attach a deposit cheque to your offer.

Showing up or submitting your offer together with a contract stating instruction of solicitors & property survey with the aim to complete within 8 weeks and a deposit cheque sends the message...
 

a. I am a serious professional 

b. I am backing my words/intentions with crystal clear actions and ultimately cash 

c. No time to waste. I respect your time and more importantly mine. Lets transact or lets move on and its really that simple 


Its a fact not just psychology, putting a contract and hard cash on the table will set you apart from the "competition" and show the seller how serious you are about buying the property. The check must always be made out to title or escrow so you don't have to worry about a random seller running off with your money. Take professional legal advice & assistance on the best way to do this for your circumstances & jurisdiction. 

4. Transparency Builds Trust, Long Term Relationships & WINS always.

It's always difficult for a vendor/ seller to disagree with market factual data. Stating the factors behind arriving at a certain valuation will build a collaborative relationship between buyer, agent and or seller. Ultimately contract subject to purchase price not being lower than official survey value and abortive costs undertaking should very easily resolve this minor challenge for a WIN, WIN, WIN outcome. 

5. Above all Know & Understand Your Seller as well as Motivating Factors 

The most important and initial task to do is to understand the other party's priorities & motivations including any time factor constraints. You want to know what ultimately is most important offer acceptance factor(s). It is not always the highest price as is generally thought as most buyers don't do in-depth research in this aspect. You wouldn't play a game without knowing the rules, would you? 

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