I have recently been talking to a vendor about his property which he wishes to sell quickly so that he and his wife can move into a retirement home. The home is worth $245K with nothing to do to it, and he is willing to acept $220K for a fast sale. He needs $150K asap to finalise the payment on his retirment unit and settle some other debts.
I offered him $150K with a 4 week settlement and the final $70K to be paid in 12 months time. He had legal advice and was told that he would need to hold a second mortgage on the $70K and now is is not keen on the deal as it is getting a bit complicated and at 75 he just wants to take the money and run. I think he has now listed the property with an agent as of this morning at $239K so my question is – does anyone have any ideas as to any other offers I could have come up with??
My reasoning behind the offer was 1) I didn’t want to have to refinance my home or investment property to come up with a deposit, so by offering the $150K upfront and renting the home out for 12 months would have enabled me to secure a good quality property in a good area for less than market value and the tenant would have been paying the mortgage
2) In 12 months time I could have refinanced the property @90% LVR and paid out the vendor.What do other forumites think of this – was there a better way to do this?? Your views are appreciated![thumbsupanim]
The $220K sounded like a good deal but it may be too late if he has listed it as he will still have to pay the agent a comission regardless. So his original offer is probably looking even less attractive.
Shame you couldn’t take his original offer without needing to complicate it for him – I can certainly see his viewpoint. He may not even be around in 12 months to collect the final payment[blush2]
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I’m quite agree with Simon’s opinion. The term should be made simple with the good bargain.
Remember, a win-win solution should always be provided in a deal. if you win on the price, you should be lenient in the term; or vice versa.
Cheers,
hermanThanks for your replies…I wasn’t trying to make it too complicated for him, I was actually trying to help him out and he was the one that came up with the $220K price, I just asked if it would be possible to do the deal with 150 now and the 70 later, as I don’t have the deposit in cash, only equity in another property which I didn’t want to refinance as a family member is a co owner and I wanted this deal to be my own. He was also happy to take the 150K now and the 70 in 12 months time at 6% vendor finance. It was only after he had legal advice that he decided it was too complicated and went with the agent option instead.
I’ve actually been talking to him on and off about the property for the past month or so (he lives up the road from me) and up until Friday he had no idea that the retirement unit would become available so soon. He was originally talking about selling his home but wanting to rent it back until a unit in the retirement village came up (which could have been next week, next year, or in 5 years for all he knew)
I can totally understand where he is coming from and understand that now he has listed with an agent then we couldn’t do the same deal, I was just trying to give him the money he needed now ($150K) to get on with moving into the retirement unit, and it would enable me to have some time to either do another deal with enough profit in it to put towards the 70K or to sell our home and move into theirs. I just hope that the property sells quickly for him and he can move on.
I personally thought it was a win win deal, as I was prepared to give him the amount he wanted and didn’t try to bargain him down, I just wanted a little bit extra time to pay the full amount. My question to forumites was did anyone have any ideas as to was there another way to approach the situation? Mainly for experience sake, as the last 2 posts come across as if they feel it wasn’t a win win situation.
Thanks again…I’m always keen to learn!
hi Junkers
couple of thing
first find out who his solicitor is and deal with him or her that will make it alot less complicated next you don’t need a 2nd mortgage you can do a caveat on the property so until you give him the 70k you can’t sell it. it give the solicitor security that his client will get paid.
ask the vendor to have a read of the agents agreement and see if you can do a deal on his/her commission and that you had been negotiating prior to there instructions probably won’t work but worth the try.
try (with the solicitor) to vendor finance with a caveat the 70k back they should be able to do it but it means they have to explain to the vendor and at 70 thats not going to be easy.from a history point of view what you need to learn is before you go into battle you must make sure that you have a an attack plan b the equipment to do the job and c an exit plan if it all goes to mush.
the attack plan is what is it and how am I going to get it.
b the equipment is the lend and funding and how are you going to do that (and that is were this one fell over as you need to negotiate with the vendor and then take it out of there hands and into a professionals hands in this case a solicitor the are removed and will negotiate alot more cleanly) and c how do I get it if this happens.This all need to be done before you even knock on the door.
I see negotiating as a battle field and you have different sides of a battle table ( just like chess and if you become a very good negotiator you wil be a good chess player to) In this case he had a solicitor acting for him and that is a good player so you did ned to move from playing against the vendor to playing with or against the solicitor.
and yes remember that if you make a gain be prepared to give a bit on something so if you made a gain on price give on something, time or come up with the money.
have fun I dohere to help
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