Understanding motivation is the key
It’s often said that most of the profit in property is made when a purchaser buys the property. While that isn’t always the case, being able to negotiate property deals is crucial to making a lot of money in property investment.
Most people go wrong in property negotiations by not understanding that the person you are dealing with on the other side is human just like you, who has needs and emotions. You will be a far more successful property negotiator if you understand the underlying positions of the other party.
To understand the other parties’ position, you have to ask questions. If the seller is using a real estate agent then you can ask the agent those questions.
There are 7 important questions you must ask a seller. One of those questions is simply “why are they selling”. You want to ask this question for two reasons. Firstly you want to find out the other parties’ level of motivation. How desperately do they need to sell their property? Secondly you ask this question because you want to see if you can structure a deal that meets their needs and at the same time gets you a great deal as well.
Next time you go to a home open, ask the agent this question. Often you will get lots of information that can greatly help you get the best property deal.
An important area to property success is using contract clauses to protect your interests when buying. In some states, a standard contract is used in most property purchases. In other states, the contract is drawn up by the seller’s solicitor. Usually these contracts have one thing in common. They aren’t particularly friendly to buyers.
You need to insert your own clauses to protect yourself when placing offers. They are what I call are “get-out” clauses.
You also should be very wary of accepting real estate agents clauses for building inspections and other contract clauses. Don’t forget the real estate agent is representing the seller, not the buyer. Only a Buyers Agent truly represents you.