Did post this in another forum, but have received no responses so far. Looking for some heads up on this
I've noticed a pattern with regards to people purchasing properties and buying them well below market value in order to gain instant access to equity.
What would the more experienced people here say are the best negotiating strategies to buy properties for less than asking price?
I'm also seeing lots and lots of properties being snapped up in rural areas for next to nothing, done up, and sold at a profit, or kept with good rental returns. Are rural areas really ones to look out for, and is it an area that's generally ignored by the masses, thinking (perhaps as I do) that the city is where the big bucks are?
Cheers!
Hi shangrila
We buy all our properties at well below asking price. The trick to getting our offers accepted is to make them. So many people feel embarrassed to make the offer that works for them.
We're always polite with the Agents or Owners and we just let them know that we're not meaning to be smart but we love the house and that's all we can offer at this point. We then back up a conversation with an Agent with a written offer that always includes a request to put our offer to the Vendor's
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
We do the same thing. In fact we bought a property just under two years ago, renovated it (did a lot of the work ourselves) and just sold it for an amount 30% higher than the original price. Not bad in a market supposed to be fairly flat. Apart from completely renovating it, we added furniture, and tenanted it for an excellent price, which made it very appealing to a 'set and forget' investor market (we ended up selling to an investor rather than a home owner, which was what we anticipated would happen).
We always offer a low price. This is helped by the fact that we always go for places that need some work – so many people are put off by bathrooms/kitchens that need renovating. Even just having a filthy tenant can put buyers off, they can't see how a coat of paint could change the look of the whole place.
We prefer to wait until the property has been on the market for a few weeks. That way, if there's little interest, it's given the vendors time to realise that their asking price might be too ambitious, and therefore be more flexible.
I usually do the legwork, ie. view the property by myself. I'm quite happy to tell the RE agent things like, 'I'm keen but it's not worth the asking price' if I think this is the case, together with, 'I'm keen but my husband hates renovating, and he's the one I'd have to convince'. Both these statements are true, hence I have no problems being upfront.
I also tend to be fairly guarded about the info I give out. In some circumstances I say as little as possible. In others, I'm happy to be fairly upfront. It depends what works in a given situation. For example we're currently looking at two different properties. I've let both agents know that theirs is not the only property we're looking at. Both need work, and have been on the market for a little while, in suburbs that generally sell very quickly. I also get the impression (from the agents themselves) that the vendors are motivated, which always helps!
It does help to know why the vendors are selling. Sometimes agents won't/can't tell you, which is fine, they have no obligation to pass this info on. You can usually gauge from the agent how motivated the vendor is by their actions – one of the agents called me today after another unattended home open, to try to 'suss out' our intentions. I was very upfront with her, and at the end of the conversation she said (twice) 'You know, it's a very good market for you to buy right now'. I can't help but think that this was a bit of a hint to put in another offer (we put one in a couple of weeks ago that was 'too low' so the vendors didn't even budge from their asking price, but it's amazing what happens in two weeks!).
Anyhow, these are just our experiences – it varies widely. But it's all part of the fun
Thanks for the replies!
It's interesting to find out the different strategies people employ to secure their IP's. Also even more interesting when you consider it from a vendor's point of view, especially if the vendor's an investor, and he's trying to maximise the return he gets on his IP. In that instance I'm not so sure I'll fall for the "That's all I can afford right now", but I suppose a seller can't wait around forever to get his exact asking price, especially in this market.
Thanks again for sharing.
The more interested you are in a property the more you will pay. Being prepared to walk away from the deal and find another is important also.
A friend of mine waited 12 months to have an offer acccepted.
A sun set clause in your offer can also a good thing.
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