When you are buying a property, there are a lot of times in the process where you get to negotiate, or to ask for something.
In a recent purchase, while in my due diligence phase, I instructed my lawyer to 'ask' for 6 things in order for me to confirm the property purchase. I got a 50% success rate - but bought the property anyway, let me walk you through the story.
I had found a great deal. Had negotiated a decent price, got the property under contract & had 10 days due diligence to get everything done.
I had finance approved to buy & to fund the renovation, I had insurance in place and I had the reno priced and had already shown some groups of tenants through.
I had my plan, knew the costs, had a bank to 100% fund the purchase & renovation, and knew I had some groups of tenants keen.
This is what I try to do in my 10 days due diligence.
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Then I asked for these 6 things...
- Small price reduction - After doing my DD and pricing the reno, to make my 'ideal' figures work, I needed to have the price drop $7,500. Denied on that one - I did get a $500 price drop, which I took. ❌
- I asked for a change in Settlement date, pushing it out a further week yes, got that one. ✅
- Asked the vendor to cut the very long grass in the big back yard . No ❌
- Asked the vendor to empty all the council bins (all full of rubbish) . Yes ✅
- The vendor had installed new carpet (big bonus for me) but hadn't trimmed the bottoms of the internal doors, or rehung them. I asked for this to be done . No (easy job, I'll do myself) ❌
- Asked for access to the property to run my Value-Add Masterclass the weekend before settlement . Yes. Property was vacant.✅
So a 50% strike rate. There were only 2 items that I 100% needed to happen, changed settlement & access to run my Masterclass.
The others would have been 'nice to have' but not game changes in any way.
So I confirmed the deal.
The game of property can be just that, a game. A big expensive game.
My rational in asking for 6 things, it gave the vendor the ability to 'push back' and deny 50% of the things to make them feel like they also got 'a win'.
Would I have got a yes on just the 2 things that I really wanted, if I just asked for those ? Maybe.
Would a price drop have been nice ? Yes.
I'm happy - got a 8.6% yield deal.
Vendor is happy - got the sale and the price they wanted.
That's a win win.
So, don't be afraid to ask for multiple things in your next property deal. You may not get a yes on everything - but you always get No on the questions you don't ask.
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