Strong competition for properties and rising prices has created a sellers’ market in many parts of Australia. So how do property buyers tips the scales in their favour? In this week’s show Michael Yardney explains the 3 critical property negotiating pressure points at work in every negotiation; either you are applying them to the other party or they are using them on you.

Also in this show, Jane Slack-Smith runs through some quick cosmetic reno tips that will return high value, Josh Masters tell us where you can go wrong when researching a market or a property and Nhan Nguyen has some very helpful tips for you to follow when you are starting out as a developer.

Miriam Sandkuhler explains how having a view of the end tenant you want in an investment property has helped her.

And Andrew Mirams, from Intuitive Finance digs deep and tells us some of his tips for dealing with the banks. Now that’s worth listening to a broker on how better to deal with the banks.

 
Transcripts:
Michael Yardney
Kevin:  A strong competition for properties in rising prices has created a seller’s market in many parts of Australia, so how do property buyers tip the scales in their favor? Well, let’s find out. We’ll ask one! Michael Yardney is one of the best-known buyer’s agents in Australia from Metropole Property Strategists. He’s also a regular guest on our show.

Good day, Michael.

Michael:  Hello, Kevin.

Kevin:  How do you tip the scales in your favor?

Michael:  I believe negotiating, even in this hot market, can help savvy property investors get themselves a pretty good deal. What they really need to understand, Kevin, are the three critical negotiating pressure points.

Kevin:  Okay. What are they, Michael?

Michael:  These work in every negotiation. Either you’re going to apply them, or they’re going to be used on you by real estate agents who have been taught well how to negotiate. The first one in my opinion is options. The person with the most options has the most power.

When you’re buying a property, it’s important to convince the seller that you have more options than they do because the power of negotiation, as I said, goes to the person with the most options. Look at it this way. If a seller has two buyers willing to offer him $500,000, you probably don’t have the option or the ability to get your offer of $480,000 accepted.

However, it’s important to realize that in negotiations, often perception is the reality. Agents will often tell you this other buyer is interested or they have better offers than you, and maybe it’s not the case; it’s just a pressure tactic.

Kevin:  What sort of language can we use in this case, Michael?

Michael:  I’d let the agent know that you’re interested in the property, but I’d say something like, “I like this property, but there are two others I have in mind. One is in a bit of a better location. One is maybe in not as good a location.” You actually let him know that yes, you’re interested, but not that much – because the person with the most options has the upper hand.

Kevin:  Wow, that’s very powerful. What’s the other one, Michael?

Michael:  Time is another critical pressure point in negotiations. If the vendor is highly motivated, if they’re under time pressures, you can find yourself a terrific buy. Now, sometimes it’s hard to know the pressures on the vendor. Some agents will sometimes tell you, but other times, it’s worth asking some questions, Kevin, to try and see what’s really behind it.

Kevin:  Michael, what sort of questions?

Michael:  Now, you may even know the answer to these, but what you want to know is what’s going on in the background. I’d ask questions like, “How long has the property been for sale? Have you received any other offers? By the way, how did the vendor come to his price? Was this your suggestion? Was it his suggestion?”

Kevin, I like to use time pressures when writing an offer. I put