BRENDON ANSELL

The Art of Negotiation - 6 Strategies Real Estate Agents don’t want me to share with You

DISCLAIMER

The information and strategies contained in this presentation/publication are provided by the author and/or publishing company as generalizations which they have formulated. They are not offering the information and strategies as financial, accounting, legal, investment, and/ or tax advice, and are not offering the advice as advice to be relied upon. Readers, viewers and purchasers must obtain specific financial, accounting, legal, investment, and/or tax advice from their professional advisor. Any testimonials included may not represent typical results. The results obtained by following the strategies will vary, according to the skill and experience of the user, and therefore are not guaranteed. Specific experiences and past performances do not guarantee future results.

This presentation/publication and its presenters do not offer any financial advice. Nor do they recommend that the information contained in this presentation/publication be construed in any such way. The producers and presenters/publishers insist that any financial action taken by, (or on behalf of) the purchaser or viewer of this material, is at the INDIVIDUALS OWN RISK and PROFESSIONAL, FINANCIAL AND LEGAL ADVICE should always be sought, when relating to matters of this nature.

The Definition of “Negotiation”

The dictionary defines negotiation as:___________________________________________________“Negotiation – a discussion aimed at reaching an

agreement or…the action or process of transferring legal ownership

of value”____________________________________________________

It does not state anything about disadvantaging another party or taking something of value off of

them

You make your money when you Buy!

An age old saying but true in the property game. However It’s not all about price….terms can equally be as important.

If you are lucky you get both…..but you don’t know till you ask….

Horses for Courses – different strategies work better in some areas than others. Become an expert in your area and find what works for you

Before we start…

1. Before you even get to negotiate a deal you need constant streams of high quality deals so it’s all about RELATIONSHIPS with people in the property industry – RE agents, developers, deal-makers, mortgage brokers etc. Add value to them and stay in touch so you are front of mind..

2. You must buy from a motivated seller…it’s your job to find that motivation before your final offer otherwise you have no ability to negotiate, Motivated does not have to mean financially stressed….ie. Sorrento

3 Don’t get into dutch auctions or multiple bid situations as you lose your power to negotiate.

Strategy 1:The Classic Lowball

Strategy 1 – The Classic Lowball

Be cheeky and ask for a massive discount

Be prepared to walk away

Sets the bar low and then change strategy from there if need be. A basic human need is to connect and be liked….

Do it with respect and courtesy for the agent and seller. Use you own moral compass here to guide you though

Strategy 1 – The Classic Lowball Example

New Farm Development Site - Asking Price $1.1 Million, paid $700k

Strategy 2:Ask for a Long Settlement

Strategy 2 – Ask for a Long Settlement

More relevant to development sites or value add situations ie early access renos (note – minimise expenditure before settlement and beware finance risks)

Great for markets that are bottoming....now perhaps?

Saves on one of your biggest costs – bank interest

In this market RE agents don’t mind as much as long as the sale is locked in and a reasonable deposit paid to cover their commission.

Strategy 2 – Ask for a Long Settlement Example

Hawthorne - Settlement period of 12 months

Strategy 2:Ask for a Long Settlement Example

Settlement period of ….

Strategy 3:Ask for value add terms

Strategy 3 – Ask for value add terms

Ie. Subject to Development Approval, early access to renovate clauses etc

Property should be worth more when you settle if done right

Helps De-risk the project if you can’t get what you want on the site and gives you a way out for a small loss

Strategy 3 – Ask for value add terms Example

Bulimba Mixed Use Project- Subject to DA Clause

Strategy 3 – Ask for value add terms Example

Proposed Development Upon Completion

Strategy 4:Renegotiate the deal

Strategy 4 – Renegotiate the deal

If your due diligence doesn’t check out go back to renegotiate and change strategy.

Can mean asking for an additional discount for extra costs you have uncovered

Can also mean shifting to a longer settlement to save costs ie Our new upcoming project

Be creative – anything goes if 2 parties are willing, but get the right message across to the seller

Strategy 5:Target Specific Types of

Real Estate Agents

Strategy 5 – Target Specific RE Agents

Examples:

Agents who sell premium million $+ properties with a cheap unattractive listing (they are used to much higher commissions)

Tired agents who have been in the game a long time and don’t like to work hard for a sale (they chew from both ends)

Specific agency brands…..in soft markets look for the highest selling agent/s (they get the listing and hammer the seller down)

Out of area Agents

Strategy 5 – Target specific agents

Even better – Out of area agent, out of area sellers

Even better again! – Out of area agent, out of area seller, motivated seller. Both want out fast

Even better yet again! – Out of area agent & seller with motivation to sell who bought decades ago. They have made their money so it is all upside to them

Remember – there are agents to buy through and agents to sell through

Note: Treat all agents with respect & give them lots of honest feedback

Strategy 5 – Target specific RE Agents Example

Development Site In The Booming Town Of Miles

Strategy 5 – Target specific RE Agents Example

There’s A Horse In My Kitchen!

PRACTISE MAKES PERFECT

Final Thoughts…

ANY QUESTIONS?

BRENDON ANSELL – DIRECTORVELOCITY PROPERTY QLD PTY LTD

BRENDON@VELOCITYPROPERTYQLD.COM.AU

Thank You