Want to know how to piece together that killer offer that the seller will accept?
Want to know the key tips to craft a property offer that stands out from the crowd?
Then read on...
Best deals go quickly. You know that.
Your job? To make your offers stick.
But a word of warning. Each house on the market has a story. Each seller is different. Each will have their own motivations. You must know & appeal to their problem.
Structuring your offers the same way each time will mean you miss out on a lot of sexy deals.
Yes you may feel like a detective at times, hunting down the key information from the estate agent/or the seller.
But the more information you have, the more perceived power you will hold.
Follow the below tips before your next offer. They may be the most basic — but most useful — offering tactic you’ll ever employ.
Tip#1 Offering Higher than the Asking Price
Yes you read right. A small minority of properties enter the open market already competitively priced.
Offering 70% of the asking price will insult the vendor, upset the agent and get you ‘binned’.
Offering slightly above the asking price can make plenty of sense and help secure the deal fast, especially if there is offer from another buyer.
Spotting how a property can be turned around & what needs to be done to realise its true potential is an invaluable quality when investing.
Tip #2 The Man with the Cash Wins
If you can buy with cash, put it in. Whether this is your cash, a JV’s or a bridging facility.
You see, from the estate agents and seller’s perspective, the will view you as not subject to financing. This will help you with lower offers and make your offer extra appealing as you can move fast, especially if they have previously been dealing with offers that involved bank financing.
Tip #3 Stop Talking and Start Listening
Yes it’s one of the most difficult maneuvers to keep silent during negotiations, but this is why you should practise to ensure those silent periods occur.
You have two ears and one mouth. Always listen first. You see, being uncomfortable during those silent periods will mean the person you’re negotiating will be uncomfortable too. The common result? One party will make a concession to break the awkward silence.
Next time you’re negotiating to a vendor, and the vendor suggests an offer, say nothing (‘Flinching’ will help too)
Let the silence drag out. Whether its 10 seconds or 10 minutes, make the other person break the silence. They will often interpret your silence as anger or disappointment – and will break the silence by revising their offer.
Smart investors will use this tactic to get less experienced negotiators to make lower offers without ever having to throw out a counter offer themselves – leaving you with a new lower negotiation starting point.
Tip #4 Say You can Complete in 3 Weeks or Less
We all know that it might be very rare to complete in a few weeks especially if you’re using bank finance. But when estate agents and sellers see you can complete in 3 weeks or less, it makes your offer stand out.
A word of caution. Only say this IF you can complete in short space of time, otherwise you will lose all credibility. If you think the deal might be lost because finance is taking longer than expected, offer to pay the sellers legal fees to sweeten the deal.
Tip #5 Know the Situation of the Seller
Identify who you are working with and really understand the situation from the sellers point of view.
You see, most investors tend to assume that negotiation is always about money. It’s not.
Switched on negotiators realise that in many cases, it’s more important to solve a problem than to offer the most money.
Imagine two investors place an offer on a property. The first investor offers more money, but needs 2 months to get his finance in order. The second investor asks the vendor why he is selling, and answers that he needs to move in the next three to four weeks.
The second investor offers £15,000 less, but agrees to complete in the next 4 weeks. While the first investor offered more, the second investor solved a problem that was more important than the price. All because he gathered some information from the seller before making an offer.
This is one of the most important tips we can provide. You are working with people, even when you are dealing with an asset management company. There is always another person at the end of the phone reviewing your offer.
What can you do to make the vendor [or estate agent] excited about your offer? How will You make your offer stand out?
Remember these nuggets are really just the tip of the iceberg. Start as you mean to go on.
Expect to succeed, but don’t become discouraged if you miss out on a few deals. Don’t ever let your emotions get the best of you. Every ‘No’ gets you a step closer to yes. Enjoy your property journey.
What are some of your tips to making offers stick?