It’s OK to ask….

One common mistake buyers often make is assuming that there are set rules that can’t be broken when negotiating for a property. From negotiating a passed-in auction with a finance clause to facilitating a sale that allows them to collect the keys and move in before settlement, there are many twists and turns that can be taken when everyone agrees to it.

This week illustrated that auction negotiations can be flexible…. and just because there is no cooling off doesn’t mean that terms can’t be negotiated and agreed upon prior to bidding.

Yesterday we secured a two bedroom ground floor apartment in Carmichael Street West Footscray after auction with a building and pest inspection condition in the contract. Reluctant to invest in the inspection and auction process due to a high level of confidence in the property surpassing our client’s budget, we discussed the potential of buying it at our budget in the event that it passed in. True to their word, the agents contacted us and we workshopped our position and signed a contract. Interestingly the gross rental yield is a whopping 5.1% based on a current weekly rent of $350 per week and the property lends itself to easy improvement with a simple cosmetic renovation and tidy up.

Another exciting acquisition this week was a premium townhouse in Yarraville on its own title. The current owners were in the midst of opting to lease the property when our investor came along. Rather than force their hand to accept a vacant holding pattern for two months, we agreed on a condition that enables the vendor to find a suitable tenant and for the purchaser to equally have a say in the selection and sign off on the application. The vendor’s rental income stream is enabled and the buyer takes on a property with a tenant already in place. At 3.6% gross rental return we were excited to encourage them to consider the initial applications.

We often identify fantastic houses in gentrifying areas that are being sold by upgraders, down-sizers or people building a new home a bit further out. Often the offer to lease back to them during their construction phase is enticing enough to create appeal to what would otherwise seem an less enticing offer.

Being creative with terms and just asking what the vendor might want can make all the difference.

Some of the more daring questions can seem difficult to ask, but as I always say to clients – we’re only asking. The vendor may well say no but it doesn’t hurt to ask. I’ve bid with finance clauses agreed to. I’ve negotiated a deposit of $20,000 only on a short settlement. I’ve bought with a 365 day settlement in place. And I’ve even signed contracts subject to the buyer inspecting the property and liking it. Everything is negotiable and while auction rules are strict, conditions are all negotiable.

… provided they are negotiated prior to the auction and agreed on by all parties.

Last month we proudly secured a villa unit for a first home buyer on a 5% deposit and subject to the vendor providing us with certificates and proof of the car space on a 99 year leasehold. The process took over three weeks but it all worked out.

Due diligence is important and in this case we didn’t let the absence of important information get in the way of securing the property; we just clearly documented our sets of conditions.

Thinking outside the square and being prepared to ask for variations can often bring success.