My last post discussed what you can do to get the upper hand in a negotiation. I also mentioned that you probably won’t be dealing with the seller directly.
You’re more likely to be talking to the seller’s agent. I certainly prefer to do it this way, as do many other investors.
Now the question is, what should you ask the agent?
Of course, this will depend on your situation and what you’re trying to achieve. But from a negotiation perspective, you’ll want to ask the agent the following:
- How Long Has the Vendor Owned the Property?
The first thing you want to know about any property is the time spent on the market.
What difference does it make, you ask?
It can be more drastic than you think. This is especially true if the seller hasn’t owned the property for a long time.
For example, I recently looked at a property in Sydney that the seller had owned for two years. He chose to sell it after his divorce for as much money as possible.
Except that the seller overpaid for the property when he bought it. And he’d only just realised that he wouldn’t be able to get all of his money back.
In such a situation, you have room for negotiation. The seller might agree to lower the price to get it over with, especially if the sale is mandated by the divorce proceedings.
- What Does the Vendor Really Expect?
In most cases, the asking price is not firm. Most sellers only set a price as a starting point to negotiation.
But you won’t know this unless you ask your agent about the vendor’s expectations.
The agent is likely to answer this question truthfully about what the seller wants. They may inform you that the seller is quite flexible, for example.
- Would the Seller Agree to Secured Part-Vendor Finance?
There’s a chance that the agent won’t know what you’re talking about here.
Most people don’t know how part-vendor financing works.
It’s quite simple really.
Let’s say you need to put down a 20% or 30% deposit on the property. If you don’t have this much money, you can ask the seller to lend it to you. Of course, you’ll pay them a higher interest rate than the going rate.
Unless the seller explicitly wants or needs all the cash right away, they might take this under consideration. Of course, your solicitor will have to work with theirs to finalise the deal.
Since this isn’t a common form of financing, the vendor will want to make sure they’re making the right decision.
Knowing this, don’t get your hopes up right away even if they do agree to part-vendor financing. Before you go out and celebrate, wait for the solicitors to finish their part of the deal.
It won’t cost you anything to ask these questions. And there’s a lot to gain. You might be able to negotiate enough to save a nice sum of money.
Better yet, there are more ways an agent can help you save money – and even buy at below market value.
Would you be interested in learning about them? Sign up for my webinar to learn more.