A property auction can be a good place to acquire your next investment.
Owing to the crazy sense of competition it can instill – there can be a tendency to go overboard.
So how can you come out on top and avoid overpaying?
Here are some do’s and don’ts to help you survive your next property auction – especially one of them most people get wrong:
We start to negotiate the day we are born. Our first cry in the cradle is a small negotiation used against our loved ones in the most beautiful ‘power struggle” of our life. Nowhere more do we manifest the skill for negotiation than when we deal with our staffs and suppliers, not to forget the clients.
Property negotiations, without fail, bring up a few critical points to the fore. If they don’t, they aren’t negotiations and you are far from talking turkey yet. While every negotiation is expected to give us a winner, the best property negotiations are those which give us two clear winners- the buyer and the vendor….yes a win-win situation for both.
I know that most of you are well versed with the essential difference between a buyer’s agent and a sales agent. For the aid of a few who are uninitiated on this, a buyer’s agent works exclusively on the buyer’s behalf whereas a sales agent is paid to represent the best interests of the seller. Why then am I bothered if you already know the difference? Let me explain you why and I am pretty confident you will find my line of reasoning appealing.
A house has 5 bedrooms but the 5th one hasn’t earned council approval yet- can you still advertise it as a 5-bedroom flat? The answer is NO. A vendor cannot do so. Plain and straight! Liz Wilcox for the blog Property Update writes why it is important for buyers to prefigure the nitty-gritty of council approvals before buying a property.
Rob Balanda for the Property Update advises how buyers should act if a real estate deal fails being closed on its intended date of settlement.
In cases when you do not show up on the property settlement date, sellers get one-up on the buyers and often quote a higher price (let us say $100,000 more than the agreed amount). Buyers give in, fearful of the Breach of Contract nightmares. However, the best way to go ahead is to engage your solicitor.
Let the seller or his solicitor know about the delay (and purely banking reasons for it). In the event of their asking for a higher sum, politely refuse citing paucity of cash. Do so over phone rather than through a letter.
If they do not agree,lure them with the ‘deposit’ bait. Tell them that you are ready to free the deposit amount right then instead of paying at the time of settlement.
If they act fastidious, go one notch higher on negotiation- tell them that you are ready to increase the deposit amount (do not increase the amount more than the penalty they are seeking, in this case less than $100,000).
Your solicitor will invariably take care of the situation and you won’t need to cough up a higher purchase rate.
You can read the original article here.
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