Offers

G’day Rick,

These are my suggestions only – feel free to agree or disagree !!

1. Crunch some numbers and decide for yourself what you think it is worth. You need to know your “maximum price” before you begin to negotiate. This is the most important step of all.

2. If by your figures you think that it is worth $230 K ( ie substantially more than their suggested price range using your example of $130 k – $150 K), then offer $149 K immediately !!

3. If their suggested price range is perhaps a little more than you think the place is worth, ask the owners or the agent “what they will ACCEPT for it”.
The agent/owner will say “they WANT $x “.
You then say ” That’s all well and good, but I didn’t ask what they WANT – I asked what they will ACCEPT.” You might be surprised by the answer.

4. If the agent / owner become difficult or unrealistic, and you are confident with the numbers you have crunched at Step 1 above, then offer less than your “maximum price”. If the negotiations reach your “maximum price” then simply walk away, and go on to the next property.

I hope this helps,

BDM

willi,
I used that exact stratergy on a property that I have recently purchased.
I paid the vendors asking price, which was more than I felt the property was worth in it’s present condition, knowing that once renovated it would rent easily and give exelent returns. So I made a long settlement , low deposit and access prior to settlement, conditions of the contract.
This means that from day one the property will be in a rentable condition, and because of the low deposit I have the cash to renovate it before my finance comes through(a win for me). Furthermore the vendor gets his asking price and doesn’t have to worry about making the property saleable(a win for him). Thus I’ve created a win/win outcome and have myself a high returning freshly renovated I/P that should be low maintainance for quite some time.
I’m still learing, but this technique seems to have worked very well(only time will tell,as we dont settle for another 4 weeks), so a big thanks to Steve and every one here for showing me the way so far!
Warmest regards,
Scott.

“Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
-anon