Property investment deals are considered to be business deals in that the investor is supposed to be using their ‘business head’ to do the deal and not so much their emotions. Why? Well the answer is quite simple. Property investing is the business of growing wealth through the purchase, rental, management and sale of properties. These steps are quite obviously ones that are made with a profit in mind.
Therefore it stands to reason that a property investor needs to be doing a property investment deal with a reasonably cold hearted approach. In saying that I am not trying to say go in with all guns blazing, but work through the steps of the steps in a cold hearted fashion leaving the emotions at the door, so to speak.
To do a deal that is a good buying price for the investor there needs to be a motivated seller. Without this there is not a very good chance of getting a very good price on a property. Of course each and every deal and property listing will be different and what the motivation for with a vendor is today could well be different tomorrow if their circumstances have changed.
Because of this you need to interview the agent and find out about the listing of the property and its recent history:
· Have there been any contracts
· If so, why did they fall over
· Has the seller shown strong signs of selling
· Has the property had price reductions – what is the price history of this listing
· What are they going to do when they sell – have they bought another property
· How much do they need from the property (you will be lucky if you find this out but you may and if you do it is an advantage in negotiations)
With these questions answered you can formulate an offer:
· will you make a cash offer – even if your offer is cash will you put in a finance clause
· what length of time do you want to put for arranging finance
· do you need any extra time before settlement for other reasons such as preparing to rehab
· how long do you want before going unconditional
· can the sellers rent back from you
· what other conditions will you put in the contract
Remember that part of negotiating a great deal is fixing times and clauses to suit both you and the seller. If you go in the first time that help the sellers meet their requirements and timeframes then you have a better chance of getting the price that you want. Not all contracts are won purely and simply on the right amount of money being offered. People’s other necessities in life often hold a lot of weight in negotiating a contract successfully.