BRENDON ANSELL The Art of Negotiation - 6 Strategies Real Estate Agents don’t want me to share with You

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The Definition of “Negotiation” The dictionary defines negotiation as: ___________________________________________________ “Negotiation – a discussion aimed at reaching an agreement or… the action or process of transferring legal ownership of value” ____________________________________________________ It does not state anything about disadvantaging another party or taking something of value off of them

You make your money when you Buy! An age old saying but true in the property game. However It’s not all about price….terms can equally be as important. If you are lucky you get both…..but you don’t know till you ask…. Horses for Courses – different strategies work better in some areas than others. Become an expert in your area and find what works for you

Before we start… 1. Before you even get to negotiate a deal you need constant streams of high quality deals so it’s all about RELATIONSHIPS with people in the property industry – RE agents, developers, deal-makers, mortgage brokers etc. Add value to them and stay in touch so you are front of mind.. 2. You must buy from a motivated seller…it’s your job to find that motivation before your final offer otherwise you have no ability to negotiate, Motivated does not have to mean financially stressed….ie. Sorrento 3 Don’t get into dutch auctions or multiple bid situations as you lose your power to negotiate.

Strategy 1: The Classic Lowball

Strategy 1 – The Classic Lowball Be cheeky and ask for a massive discount Be prepared to walk away Sets the bar low and then change strategy from there if need be. A basic human need is to connect and be liked…. Do it with respect and courtesy for the agent and seller. Use you own moral compass here to guide you though

Strategy 1 – The Classic Lowball Example New Farm Development Site - Asking Price $1.1 Million, paid $700k

Strategy 2: Ask for a Long Settlement

Strategy 2 – Ask for a Long Settlement More relevant to development sites or value add situations ie early access renos (note – minimise expenditure before settlement and beware finance risks) Great for markets that are bottoming....now perhaps? Saves on one of your biggest costs – bank interest In this market RE agents don’t mind as much as long as the sale is locked in and a reasonable deposit paid to cover their commission.

Strategy 2 – Ask for a Long Settlement Example Hawthorne - Settlement period of 12 months

Strategy 2: Ask for a Long Settlement Example Settlement period of ….

Strategy 3: Ask for value add terms

Strategy 3 – Ask for value add terms Ie. Subject to Development Approval, early access to renovate clauses etc Property should be worth more when you settle if done right Helps De-risk the project if you can’t get what you want on the site and gives you a way out for a small loss

Strategy 3 – Ask for value add terms Example Bulimba Mixed Use Project- Subject to DA Clause

Strategy 3 – Ask for value add terms Example Proposed Development Upon Completion

Strategy 4: Renegotiate the deal

Strategy 4 – Renegotiate the deal If your due diligence doesn’t check out go back to renegotiate and change strategy. Can mean asking for an additional discount for extra costs you have uncovered Can also mean shifting to a longer settlement to save costs ie Our new upcoming project Be creative – anything goes if 2 parties are willing, but get the right message across to the seller

Strategy 5: Target Specific Types of Real Estate Agents

Strategy 5 – Target Specific RE Agents Examples: Agents who sell premium million $+ properties with a cheap unattractive listing (they are used to much higher commissions) Tired agents who have been in the game a long time and don’t like to work hard for a sale (they chew from both ends) Specific agency brands…..in soft markets look for the highest selling agent/s (they get the listing and hammer the seller down) Out of area Agents

Strategy 5 – Target specific agents Even better – Out of area agent, out of area sellers Even better again! – Out of area agent, out of area seller, motivated seller. Both want out fast Even better yet again! – Out of area agent & seller with motivation to sell who bought decades ago. They have made their money so it is all upside to them Remember – there are agents to buy through and agents to sell through Note: Treat all agents with respect & give them lots of honest feedback

Strategy 5 – Target specific RE Agents Example Development Site In The Booming Town Of Miles

Strategy 5 – Target specific RE Agents Example There’s A Horse In My Kitchen!

PRACTISE MAKES PERFECT Final Thoughts…

ANY QUESTIONS?

BRENDON ANSELL – DIRECTOR VELOCITY PROPERTY QLD PTY LTD Thank You