Negotiating Questions

From: Gee Vee


My wife and I are in the process of checking what is available on the local real estate market and have found a couple of possibilities.
The agents are all extremely confident that they will get their advertised asking price PLUS.
Some of these houses are in reasonable areas as far as our location is concerned, but there are features about them that ordinarily you could use as haggling points, but these agents dont seem to want to consider them as they say they have plenty of buyers who will buy.
How do you get past this seemingly stone wall to really negotiate a better price on these or any other property?
Some of you forum contributors seem to be able to get the deal you are after and not have to pay anymore than you have to??
Is there a book or course that discusses or teaches this stuff without having to do the $20k weekender?
 
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Reply: 1
From: Ian Findlay


Make an offer and if the RE don't like it politely remind them that they are
duty bound to pass on all offers to the seller.
If the still don't like it, I'm sure that they will mind you reminding them
that you could always talk to the seller yourself thus potentially cutting
them out.

Ian


----- Original Message -----
From: "propertyforum Listmanager" <listmanager@bne003w.webcentral.com.au>
To: <Recipients of 'propertyforum' suppressed>
Sent: Monday, June 17, 2002 9:43 PM
Subject: Negotiating Questions


> From: "Gee Vee" <geevee@excite.com>
>
> My wife and I are in the process of checking what is available on the
local real estate market and have found a couple of possibilities.
> The agents are all extremely confident that they will get their
advertised asking price PLUS.
> Some of these houses are in reasonable areas as far as our location is
concerned, but there are features about them that ordinarily you could use
as haggling points, but these agents dont seem to want to consider them as
they say they have plenty of buyers who will buy.
> How do you get past this seemingly stone wall to really negotiate a better
price on these or any other property?
> Some of you forum contributors seem to be able to get the deal you are
after and not have to pay anymore than you have to??
> Is there a book or course that discusses or teaches this stuff without
having to do the $20k weekender?
>
>
>
> To reply: mailto:propertyforum.49069@bne003w.webcentral.com.au
> To start a new topic: mailto:propertyforum@bne003w.webcentral.com.au
> To login: http://bne003w.webcentral.com.au:80/~wb013
>
 
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Reply: 1.1
From: Steve Piggott


I'm with Ian !

Be assertive with the agent and state that you wish to sign a contract here and now and have the cheque book out ready.
Leave the price until you get down to that line in the contract this way you already have the vendors name and address which you can now legally visit to submit your offer personally if the agent refuses.]
Tell the agent he/she has 24hrs to respond with the contract signed and accepted by the vendor so you can authorise the deposit and instruct your financier and solicitor.
Make deals firm , clear and business like.
Agents will respect that,even if you have made an offensively low offer.
The worst offers put to vendors sometimes get accepted! It's really just a numbers game. You wont win every deal.... in fact you will lose most... but surprising thing is you'll get one eventually. Its of no value just buying because you can.... making money is done by constructing some basic rules and sticking to them. And tell yourself
'I will never pay full price!', and ' I will get the deal I need , or I dont do the deal'.

Hope I havent raved too much here.... but for myself its mostly about the attitude to investing that makes it work.

Happy Investing Neb :)
 
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Reply: 2
From: Kristine .


Gee Vee

They sound like pretty good agents to me - decisive, confident and protecting their vendor's interests. Just the sort you would choose when it comes time to sell.

Of course, when you're buying, it's a different matter. Don't lose your composure, remember Abraham Lincoln's famous words "You will attract more flies with a teaspoon of honey than you will with a gallon of gall".

Having said that, can you imagine how many tyre kickers the average agent gets to deal with across the course of a year? How are you going to make yourself known to them, to stand out from the crowd of bluffers and blusterers who are gonna buy something - someday?

You say you are looking in your general local area. This is where you take a deep breath, switch on your million dollar smile, wear your business suit, and get down to business.

Start networking, the agents first, but don't forget the post office, the general store, the stock and feed merchants, the gossip at the school gates, and that magic lantern, the internet.

www.realestate.com.au and the other sites are invaluable, the Weekly Times etc, and make sure you go to the open for inspections, auctions, clearing sales etc.

Print up some business card sized tags using your home printer with your name, address, contact details etc, and write further points on it in ink, when you exchange it for some information or another business card.

I met a man not so long ago, who charged $50 dollars each for his business cards. You think I'm joking? I'm not, and he has become an extremely wealthy man through networking and negotiating. So don't go giving your cards away - exchange them!

When the time comes to really negotiate, you will be pleasantly surprised how easy and congenial it is. It's all a great game, win some lose some, but just like practising your golf, you only need a birdie every so often to keep the thrill in the game.

Gee Vee, I went out recently determined to buy that day, and I did. Whether I have bought for myself, or a client, remember the fundamentals of negotiating are the same. My litany is the Gambler's Song "You've got to know when to hold them, know when to fold them, know when to walk away, know when to run", so if you like the look of a property, don't give up until someone else has bought it, and even then, buy it the next time around.

Wayne Berry says "Circumstances have changed a little here, I think we should talk again". As a long time professional negotiator in a variety of businesses and activities including political lobbying, I always have another reason to ring them again, and again, and again, until the situation is resolved.

Let Bruce and the Spider be your inspiration; don't hunker down in the cave of damp disappointment, there are battles to be fought and won out there. Decide that out of the next three properties, that YOU WILL buy one of them, at a price and on terms you are happy with, then go get it! Once you decide, I guarantee you will succeed.

I make no apology for the length of this post - I just love encouraging people - but if you think this was bad, you should hear me in full voice!!!

Best wishes - look forward to reading happy news

Kristine
 
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Reply: 2.1
From: See Change


As with all things , it's a good idea to practise.

When we were looking for a house to buy ( PPOR ) in late last year we saw several houses which weren't exactly what we wanted but would have been "good buys " at a certain price.

We made lower offers on all of these. Some of the vendors didn't shift much but a couple made counter offers which surprised us considering the strength of the market at the time. These counter offers were well below what we considered to be the market price at the time.

Prior to this we'd only made offers on houses that we really wanted and with one exception ended up buying. ( that's what hanging around at somersoft does to you)

The interesting thing was noticing our own reaction and the reaction of the agents to the bids. Some agents have no reaction but others say your offer is ridiculously low and try and push you higher before they submit the offer to the vendor. As with anything, the more times we made low offers the more confidently we dealt with the agents objections. It's also an interesting feeling to negotiate a vendor down significantly and the walk away saying it's not low enough.

Practicing in a situation where you have no emotional or financial desire to buy a specific property prepares you for the ones that are important.

We recently bought our first IP and started of with an offer that was well under what we expected to pay. The vendor responded that our offer was ridiculous and there was " no way he'd sell for anything less than $xxx".

Given the strength of the market at that time and the return on the property I thought $xxx was a good price and promptly offered $xxx which was ( after some hesitation ... ) accepted by the vendor.

Interestingly the agents took the property off the net within a couple of days as they were inundated by other people inquiring about it.

see change
 
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Reply: 2.1.1
From: Duncan M



Hi SeaChange..

All great advice!

I think John Burley suggests travelling to somewhere where your not known
and making mass low-ball offers to get over the Fear Factor etc.. One point
to remember is that Agents sometimes LIKE low offers, it helps them
condition their client down from the unrealistic price the Agent quoted them
in a bid to get the listing..

Duncan.
 
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Reply: 2.1.1.1
From: Gee Vee


Hey everybody thanks for the great replies!
I must re-read all this terrific info and reformulate my/our game plan.
Any one can go out and pay top dollar IF you can get the finance. I dont want to be one of them.
I like the suggestion of working on the networking, and some of the agents are now chatting to us a lot more as they are seeing us at different open houses and inspections.
Still, are there any books that may help us with this particular subject??
I have listened to ROGER DAWSON tapes, they are helpful to a degree.
 
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Reply: 2.1.1.1.1
From: Gunna Doit


Hi there.
I've recently purchased a brilliant easy reading book (and have just lent it to a friend who is selling her house) called, I think, "Real Estate Mistakes." I can't remember the author, but I think it was Neil someone. I'll get the book back and confirm these details. Someone else may know the book I'm talking about, anyway.

It is a book written about the mistakes that both buyers and sellers make when dealing with real estate and how they happen. It gives advice to both the buyer and the seller on negotiating as well as many other areas. It is very easy reading however.
A good book.
 
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Reply: 2.1.1.1.1.1
From: J Parker


I would say that, in this current seller's market, it is hard to use negotiating tactics on every sale. Of course there is going to be that motivated seller but trying to get information out of some agents is like squeezing blood out of a stone.

Set your limit and stick to it. Some interesting reading I've been doing in the past weeks includes techniques used by American real estate experts (Wright Thurston is one). They like to talk to the seller direct and, if you can do this, I believe you will have more success, as you can sus out their story and "solve their problem", so to speak. Some of them advocate not making the first offer but finding out what the vendor's rock bottom price is and going from there.

Also be prepared to walk away if you have reached your limit. There will be other sales around the corner. The more you practice, as See Change points out, the better you are bound to become. Confidence works wonders.

A couple of things I have found effective include setting a time limit for your offer. Give them 24-48 hours, telling them you are chasing other opportunities and need a fast answer. Another idea is to let them know that you can settle more quickly, as you have finance ready to go. Nothing more an agent likes than getting his/her commission in 21 days rather than 42!

I would recommend reading De Roos "Real Estate Riches" for ideas as there are a few interesting ones. It's also an inspiring and easy-to-digest book regardless.
Let us know how you go Gee Vee!
Cheers, Jacque :)
 
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Reply: 2.1.1.1.1.2
From: Felicity W.


The book is by Neil Jenman. Some say he goes too far, but at the very least it's a good read to open your eyes and be aware of what some agents do!
I had an agent mention to me the other day, when I asked why the vendors were selling "oh, since the new privacy act, even if I knew I'm not allowed to tell you..."
Anyone got any thoughts on this?
Keep smiling
Felicity :cool:
 
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Reply: 2.1.2
From: Jas


> From: "See Change" <see_change@hotmail.com>
>
> As with all things , it's a good idea to practise.

I'm with See Change. But you don't have to practise on property. I
negotiate all the time in shops. I've found I can get a 10% discount
just by asking for it and more if I give it some effort.

"It's the last one"
"It's the wrong colour"
"It's scratched"
and so on...

Negotiating is negotiating. Practice in the shops helps practising in
the real estate office.

Jas
 
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Reply: 2.1.2.1
From: Mark Pardi


Step One

get a contract

Step Two

have your solicitor review it

Step Three

complete the contract with you price and details

Step 4


sign a 66w

Step 5

get a cheque for 10%


Step 6


go to the vendors solicitor and give it to him

He then has an unconditional signed contract with a big cheque for his client.......awesome fun.....now watch the shit hit the fan as you totally by passed the agent!!!

all good


Mark Pardi
 
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Reply: 2.1.2.1.1
From: David Corey



Felicity

I know the answer to the agents statement about the privacy act. But since the privacy act has now come in, I can not tell you.

David Corey
ALICE SPRINGS
 
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Reply: 2.1.2.1.1.1
From: Paul Hendriks


Hi All,

I used a negotiating tactic with regards to leasing retail retail premises...

I told the lessor of the premises I wanted that I had 3 choices in the same street, this was true, but...

1st was much cheaper! but not available for 18mths ( he didn't know that )

2nd I could get much cheaper than his shop, but neglected to mention the $250k goodwill attached

3rd I wanted his premises! & got it $400 per week cheaper than his Accountant told me they would expect, I bypassed the accountant & chatted to the Landlord himself.

All honest stuff, just don't mention some things, & this gets their mind ticking over.

Just keep trying & you will get there.

Regards
Paul
 
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Reply: 2.1.2.1.1.1.1
From: J Parker


Mark,

Could you clarify what a 66w is? I have heard of it but have forgotten!....

Also, what benefit would there be in bypassing the agent here, as it would only serve to anger them and possibly leave you off their database of buyers? I can see how submitting the offer through the solicitor may work (faster process in some cases!) in the situations where the agent refuses to submit your offer. Because they are legally obliged to do so, then they would have no recourse here. But if they were submitting the offers and still not getting anywhere, then wouldn't the vendor still view any lowball offers (through a solicitor or otherwise) with contempt?

Would appreciate further feedback and your thoughts here. Does this method work for you a lot?
Cheers, Jacque :)
 
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Reply: 2.1.2.1.1.1.1.1
From: Jas


> From: "J Parker" <jacqueparker@ozemail.com.au>

Hey Jacque

> Could you clarify what a 66w is? I have heard of it but have
> forgotten!....


It's the form you sign to waive your cooling off rights. This is a
certificate that complies with Section 66W of the Conveyancing Act 1919.
http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s66w.html


> Also, what benefit would there be in bypassing the agent here, as it
would
> only serve to anger them and possibly leave you off their database of
> buyers? I can see how submitting the offer through the solicitor may
work
> (faster process in some cases!) in the situations where the agent
refuses
> to submit your offer. Because they are legally obliged to do so, then
they
> would have no recourse here. But if they were submitting the offers
and
> still not getting anywhere, then wouldn't the vendor still view any
> lowball offers (through a solicitor or otherwise) with contempt?

The idea behind it is to talk to the vendor directly, cause they are
more likely to agree with a lower figure (don't have an agent to push
for more). Once you've opened negotiations with them, you can find out
more about the house (and what's wrong with it), the motives for
selling, and generally help your negotiations.

Jas
 
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Reply: 2.1.2.1.1.1.1.2
From: Jas


> From: "J Parker" <jacqueparker@ozemail.com.au>

Hey Jacque

> Could you clarify what a 66w is? I have heard of it but have
> forgotten!....


It's the form you sign to waive your cooling off rights. This is a
certificate that complies with Section 66W of the Conveyancing Act 1919.
http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s66w.html


> Also, what benefit would there be in bypassing the agent here, as it
would
> only serve to anger them and possibly leave you off their database of
> buyers? I can see how submitting the offer through the solicitor may
work
> (faster process in some cases!) in the situations where the agent
refuses
> to submit your offer. Because they are legally obliged to do so, then
they
> would have no recourse here. But if they were submitting the offers
and
> still not getting anywhere, then wouldn't the vendor still view any
> lowball offers (through a solicitor or otherwise) with contempt?

The idea behind it is to talk to the vendor directly, cause they are
more likely to agree with a lower figure (don't have an agent to push
for more). Once you've opened negotiations with them, you can find out
more about the house (and what's wrong with it), the motives for
selling, and generally help your negotiations.

Jas
 
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Reply: 2.1.2.1.1.1.1.2.1
From: Mark Pardi


The last post by Jas is correct

A 66w waives your right to cooling off period.

Hence the contract is unconditional

It is a one page document that you must sign with your solicitor

So with an unconditional contract and a cheque for 10% you have enormous negotiation strength.

Does it work........you bet......I and my team of people use it all the time.

As for the agent.....too bad he/she still gets paid.....and will still kiss your a* for your listing.

and if you think that 99% of agents can even spell data base never alone use one you are sadly mistaken LOL

this technique is about crunching a vendor for you....not you the buyer being crunched by the agent for the vendor.

I have personally beaten many other buyers with unconditional lower offers and hence reversed gazumped on a lower price.

Its all good !!!

Mark
 
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Reply: 3
From: Jas


On 6/17/02 9:42:00 PM, Gee Vee wrote:
>Some of these houses are in
>reasonable areas as far as our
>location is concerned, but
>there are features about them
>that ordinarily you could use
>as haggling points, but these
>agents dont seem to want to
>consider them as they say they
>have plenty of buyers who will
>buy.
>How do you get past this
>seemingly stone wall to really
>negotiate a better price on
>these or any other property?
>Some of you forum contributors
>seem to be able to get the
>deal you are after and not
>have to pay anymore than you
>have to??

Here's a short list I found

save on the purchase price, as compared to the list price.
save by negotiating extras into the purchase price that were not previously included.
save by negotiating for lower settlement costs.
save by negotiating for repairs to be paid for or completed before settlement, at the seller’s expense, which were not part of the original listing terms of the property.

Jas
----------------------------------
When facing a difficult task, act as though it's impossible to fail. If you're going after moby dick, take the tartar sauce
 
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Reply: 3.1
From: Lars Andersson


Is it possible to negotiate on brand new property as well?

I have been to a number of property developments and they all have a printed price list. As people seem to be keen to buy, how could these prices be negotiated down? Is there a difference between property that is almost ready and property that is purchased off the plan?

Regards,
Lars
 
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