I’m often writing about how being a property developer is not a “Get rich quick” route, but in this post I’d like to point out how some good negociation techniques can help deliver you a life changing porperty deal that could set you up for life.
Let me explain. 5 years ago I was developing flats in South West London. I was given the opportunity to by a detached 3 bed house. It was a munter. It had been on the market for over 12 months and every agent in the area couldn’t shift it. I had just sold a flat and was looking for another to develop. The house had caught my eye in the local paper some 10 months ago so I was surprised to see it again online. I called the agent to understand what was going on. They told me that there had been a number of buyer fall through and the seller was now desperate to move on. The asking price was well in excess of what I could afford, but the economic climate was against everyone in 2008, so I thought I’d put in a really low offer to see what reaction I got.
I thought the agent would call me back with an out right “No” but to my surprise he tried to negotiate with me. Now here’s my first tip in the art of negotiation. When you have nothing to loose (i.e. nothing to sell) you are in the winning position and you have to use it. Stand your ground whenever an agent tries to necotiate the price up. Remember there is always more development opportunities around the corner, don’t get blinded by this one opportunity, their will be others.
Back to my story. When I refused to move from my original offer price (30% below the asking) I was expecting things to go silent. 2 days later I got a call…
“Are you sitting down” said the agent. “my client would like to accept your offer”.
I had managed to buy a 3 bed detached house for the price of the 2 bed flat. This was a life changing deal and it was all because I knew the vendors position and how long the property had been on the market. Proof that sometimes you need to stand your ground when you know you are in a winning position. Proof that you should always make a note of propoerty that struggle to sell and deliver highly motivated sellers. Proof that you can make life changing deals even when the property market is in the toilet.
Most of the time being a property developer is pretty hard work. Finding development, raising finance, construction, and then the same again but every now and again you get given (by chance mostly) a life changing opportunity that can truely change things around.