Property Investment Wise: Negotiating With Property Sellers For The Best Deal

Talking to new investors you could be excused for thinking that the price of the property was the most important issue when purchasing an investment property, and in most instances this would be right, but also there are often circumstances where this is not so.
Sellers also have a agenda when it comes to selling their property and buyers should always find out just what it is that they want to achieve from selling the property.  You see different reasons will mean you have different strategies for negotiation and could get you a better deal.
Let’s look at some of the scenarios that a buyer could be faced with as a property investor:
Buying from an estate – this seller could be interested in the price because it may be money they had not counted on, but more important to them may be the fact that they have an unconditional contract which means that they may be happy to have a longer than normal settlement – this may benefit a buyer from:

1. a finance point of view,
2. because they need to sell a property,
3. they want to have some time to arrange contractors for a renovation,
4. they want to let it out as soon as it settles but the property needs some tidying up which they are prepared to do but want to do it before settlement

Buying from a seller who is building

1. the seller may be building a new home so they need the money, but don’t want to move just yet because the house is not finished so right here and now the investor has a tenant! The buying price in this situation is often adjusted to take into consideration some rent, but of course care needs to be taken in this regard.
2. the seller may be building and needs some finance so you may negotiate a partial release of monies prior to settlement (usually the deposit), the date of which is when their new property is finished

Buying from another investor who needs to go to contract before the end of the financial year
A seller who does this is working the sale to their tax advantage, but they may not necessarily need an early settlement because it is the date on the contract that is the ‘date the property is sold‘ so as long as it is a signed contract before the end of the financial year the sale is deemed to be  in that financial year.
***You can see that there can be quite different situations where a seller may negotiate a contract quite differently from what was initially intended.  Not only can the time be advantageous to an investor, but if an investor works with the seller they will often save a few thousand dollars as well.  A double move within a few months, for example, would cost a vendor more than a few thousand dollars! Never mind all the hassle!
***Always make sure a solicitor knows exactly what you are trying to achieve with these types of deals and get them to write the clauses that affect anything different than a standard sale contract.