Friday, March 27, 2009

Getting the deal across the line

So, you’re about to buy an investment property, or any property for that matter and you want to get the absolute best deal. Always keep in mind that a contract for purchase doesn’t just consist of a price. Many times there are other conditions on the contract which are just as important to the seller as the price.

If you’re trying to get your offer accepted and it’s not quite at the sellers asking price, or you’re in competition with other buyers and want to make your offer stand out… here are a few things you can try to help smooth the deal.

1. Leave the settlement date (the date when you officially own the property) off your original offer and let your agent know that you’re happy to settle whenever suits the seller. If a certain time specifically suits them (quick or a long), being flexible may just help you get the deal across the line

2. Put down a sizeable deposit. This shows you’re serious and are capable of completing the contract. Oftentimes attaching a cheque for the deposit to your offer is enough of a mental stimulus for the seller.

3. Where possible make your contract unconditional or subject to as little as possible. Unconditional means that a contract isn’t subject to a building inspection, finance, selling another property etc. If you can get your building inspection done prior to offering and have your finance approved, this can be a very strong incentive for a seller to sign and put the sold sticker up straight away.

4. Consider letting the agent pass on your circumstances. You’d be surprised how many sellers I’ve dealt with over the years who like to know who is going to own their property after they’ve moved.

It’s important to note that if you’re not able to do points 2 and 3 – DON’T! These are only handy hints and they only work if you’re able to do them.

The points also work in reverse if a seller wants you to come to their price. You can then start to be more rigid with settlement date (perhaps you want to stretch it out so that rent increases can be completed) or deposit (perhaps you want to put down NIL deposit so that your cash isn’t tied up).

Contracts are like living breathing organisms and they’re open to being changed, amended and reworded so that they best suit the parties involved. Before you sign any contract make sure the agent takes the time to explain it and that you’ve read every part of it. Where possible, take it to your conveyancer or solicitor to check over.

Happy purchasing!

By Kirsty Dunphey with 1 comment


Hi Kirsty, great blog, from my experience the terms of settlement can be just as important as the price to a vendor.

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