Property investing tactic #1 – Find out what’s the REAL Reason They Are Selling
A seller that’s pressed for cash or feeling the squeeze on their finances is more willing to part with their property for a lower price. But you can’t just ask the seller how their bank account looks…
So you need to ask some specific questions:
How long have they owned the house?
Are there any issues with the house?
What are the utility costs?
If they’re letting out the property, what rent are they getting?
And why are they selling (but remember the answer to this isn’t always truthful)
While you’re there, look at the home for signs of why the might be selling. Are there four kids in the house with only three bedrooms indicating the need for more space? Are the walls bare and the furniture sparse, indicating a break up or divorce? If the house is empty, why did the owners move out?
Remember, if you’ve figured out the seller is moving to another province, simply can’t afford the big house after their divorce, or need to sell quickly for any other reason you’ve got leverage to negotiate a better price. On the other hand, if you discover the reasons for selling aren’t that compelling you might already have your answer whether you’ll get a low price or not…
Property investing tactic #2 - Butter up the selling agent to make negotiating easier
The estate agent is the one that’ll present your offer to purchase to the seller. So having them positive about you as a person can only help your chances.
This doesn’t mean a bribe or anything unethical. It merely means begin friendly with the agent. Creating a connection. If you’ve got other property you’re selling, or you plan to flip the property you can offer those deals to the agent in return for lowering their commission a bit.
In fact, telling the agent you are a property investor and you’d like to work with them on future deals won’t hurt your chances either.
Property investing tactic #3 – Make the seller feel like their also getting a good deal, don’t ask too much
Don’t ask for a ridiculous 50% discount on the asking price. That’ll just tick of the seller.
Ask for 5% - 15% depending on the seller’s motivation.
But most importantly of all, if you’re asking for 15% discount on a R1 million property don’t be stupid. Don’t add in loads of conditions for the sale. Things like “Can you write in the lawnmower, leaf blower, and that pile of firewood beside the braai?” Don’t haggle about a couple of paint spots that are chipped off on the wall or the fact that the owner wants to take the DSTV dish with them when they move.
These things are minor issues. They’ll cost you R5,000 or R10,000 at the end of the day, but pushing to get them could cost you a deal with a R150,000 discount.
The secret is, even though you are asking for a discount the seller mustn’t feel hard done by. You’re helping them by buying the property as quickly as possible and taking the ‘problem’ off their hands.
Property investing tactic #4 – Know when to hold and when to fold
When I was a kid, my Dad loved to listen to that Kenny Rogers song “You gotta know when to hold them, know when to fold them, know when to walk away, know when to run”.
This is very important when it comes to investing.
You simply cannot afford to fall in love with a property and pay too much.
The entire process of looking for property and negotiating is an emotional process. You get excited. You invest time and energy into the process and obviously don’t want to see your efforts wasted.
But you can’t allow these emotions to dictate the deal.
There are many more properties. There are many more motivated sellers. Walking away from a deal where you can’t get your price won’t kill you.
You can simply start the process again and look for a better deal.