Life is about taking chances and if you want to secure your dream property, you have to be in it to win it. Advocate Property Services Director, JO VADILLO says regardless of how many people you’re up against if you want a particular property you should make an offer. Never be put off by others making high offers because the contract offering the most money won’t always win the day, especially if the terms of their contact are not seen by the seller as enticing.
Recently I purchased a house for a client and I wasn’t the first or second highest offer.
Even at the time I pressed send on my written offer to the agent I was not optimistic.
We were at a ‘best offers by 5:00pm’ scenario and being a ‘throw your hat in the ring’ kind of gal I thought we should try despite being at the bottom of the purchase price range.
So what transpired in this property buying journey of success when we were not the top dollar being offered?
Quite simply put, I leverage off the needs of the vendor and paired that with what the property was realistically worth and mixed in the flexibility the clients budget provided.
So how did I come from third place and win?
This property was a sentimental sale; a downsizing homeowner who actually built the property decades earlier. It was once a cherished and much loved family home.
The house itself was also on a two-title block and the opportunity had seen developers circling the listing. It had created so much interest the agent had to call an offer deadline to avoid starting a protracted bidding war.
The house was sturdy and double brick, built in a fashion that no longer exists.
It didn’t represent a smart economic move to destroy the home in the name of freeing up two blocks.
How and why my offer won the deal
When I put forward the offer I did two things right!
Firstly, I told them the house would be kept and renovated.
Secondly, I knew the vendor had moved out already and was in need of a swift sale process. So I offered to settle up in 30-days.
This combined with the home not being demolished was enough to convincingly win over the vendor.
Even with another offer that put more than an extra $5,000 in their pocket, the convenience of the terms I put forward were motivation enough to get the vendor to sign the contract.
By leveraging off the needs and desires of an owner you can often achieve a better price because the terms offered by the contact work in their favour.
Think like a vendor and you might also win
For example, if the vendor is a couple getting divorced with a house on the market it often means the shorter the settlement the better.
Is your vendor one with a long term family home with 30 years of memories to pack up? I would suggest you offer flexible terms to accommodate the emotional and laborious task of packing up a family home.
You could also gain the winning edge by taking settlement timing into consideration.
If Christmas, Easter etc. is on the horizon you might have a vendor that wants to see out one final hurrah, or on the flip-side, they may wish to move out before the festive seasons commences and solicitors, banks and transport removal companies close down for the holiday period.
Use these additional negotiation strategies
When you email an offer, keep it courteous. If you are going to drastically low-ball your offer then validate why. It could be that the house down the road sold for a similar figure or that the roof needs major repair work.
Remember to save the hostile negotiation speak unless absolutely necessary. It only serves to get the agent and vendor off side.
Also, putting an offer forward and then saying it will be revoked by 5:00pm could backfire. Only use this tactic if you have a second option you are exploring with a deadline.
Lastly, agents can tell when a prospective buyer is emotionally invested in a property, so never make the mistake of showing too much love for a property and always be prepared to walk away.
Remember, negotiating a contract to buy a property is kind of like a game of poker with really big stakes!
About Jo Vadillo:
Jo Vadillo is the owner and Director of Advocate Property Services Pty Ltd. She works with investors and homeowners to source new and existing properties that meet the best investment credentials to build a prosperous property portfolio for their clients. Jo is also a Board member of My Property Circles and runs Property Women, an organisation aimed to educate women on their journey to property success.
Jo is an author, mentor, public speaker, fierce negotiator and a terrible cook. When not immersed in her own property dealings and that of clients, Jo and her husband Greg are big travellers and go everywhere as an entourage with their 3 young sons.
General Advice Warning: The advice has been prepared without taking into account your objectives, financial situation or needs. You should therefore consider the appropriateness of the advice, in light of these objectives, financial situation or needs, before following the advice. We recommend that you speak to your accountant and financial adviser to help you determine whether direct property investment is right for you.