Negotiating property acquisitions

Thursday, 24th Mar 2011

To start off on the right foot, you should never make your best offer first. If you make your first offer or counter offer your best offer, you may find that the other party will try to negotiate something additional, even if they may have accepted that offer under normal circumstances. It is human nature to try and gain something from the negotiating process. It is important that you have conditions or other positions you are willing to negotiate away.

If you are the purchaser, perhaps you may make an offer with an extended period of settlement time. Perhaps you may make an offer that requires the vendor to complete some repair work on the property, or pay the next year’s rates or strata fees. There are a significant number of conditions that you could include that you may not necessarily require and may be willing to negotiate away.

Another reason to put in conditions you are willing to negotiate away is to distract the other party from the major issue which is probably price. The focus on a relatively minor point may give the other party some satisfaction and they may let this matter take more importance to the deal than the price. If you get the price you want you are probably more than willing to give ground on the minor matters you didn’t want anyway.

The same situation applies if you are the seller. Counter offers can include conditions you are willing to negotiate away.

Whether you are the purchaser or the vendor, it is important to include conditions you are willing to negotiate away, that do not severely impact upon the deal. If the conditions are too onerous, it may result in negotiations collapsing unnecessarily.