What’s our strategy to secure this place?? It’s a careful game that’s about to begin.
The selling agent is going to try and bargain us up, and we don’t want to give control of the process over to them. Our game plan needs to be worked out and we need to orchestrate the process.
The auction is due in just 5 days’ time…. a wonderful way to spend a Saturday morning!!….and we don’t want to get to that.
Mitch and I weigh up the factors to consider, and to determine the price we’ll put forward.
First step…. read the contract.
We check it out and get the contract to our conveyancer, who is amazing. Quick turn around, and we have confirmation….no issues with the contract.
Second step…. read the Strata Report.
The Strata Report will tell us the financial status of the building, including if there are any hidden risks…like Special Levies planned.
We are not only looking for the status, but also looking at what a future buyer will see when they do their search.
This is part of already preparing for the future sale of the place.
We haven’t bought it yet but we need to already be thinking about the future. It’s an important lesson, and one we learnt the hard way….it cost us money in the past when we were over-confident and didn’t do the research. This resulted in buyers being put off a property we were selling…. never again…read, read, read.
The report is all clear!
Now, Third step…. what do we offer and under what conditions. Don’t leave the conditions to the real estate agent.
We determine they are open to pre-auction offers. This may mean there is not as much interest. If there were lots of people interested they would take it to auction. Or, they may want to use this to bargain another potential buyer to increase an existing offer (…. officially there are no such things as Dutch Auctions…. but as we keep being told…it’s what the market is saying…. god that market talks a lot!)
We also think we should use the 11th hour strategy to our benefit. Create tension, a sense of urgency and a fear of loss.
What can we lose, they will either accept it or we go to auction? So here it goes….
Thursday night before the auction wemake the verbal offer.
We confirm we will provide a signed contract and deliver the 10% deposit cheque to the real estate office Friday morning. Real Estate reps love that…they make a potential buyer signed a contract as part of the offer to get them emotionally committed…and then they buy time to bargain. We’ll do it, but we plan to use the time-strategy to our advantage.
We put a time limit on the offer…. the offer stands until midday Friday.
If it’s not accepted with confirmation that the contracts will be exchanged, the offer will be withdrawn. We will walk.
Also, we ensure the real estate rep knows we are looking at other properties and we will buy sometime in the next week, it’s just a matter of which one we choose…. but…. we make sure there is no commitment from us to be present at the auction. This aims to create a sense of urgency and the risk of loss for the other side.
We aim to take control of the negotiations. Are they willing to risk a guaranteed offer for the gamble of an auction? Either way their reaction will flush-out the likelihood of other genuine purchasers being in the hunt, or they have nothing.
…. we wait for Friday morning to pass….
The time goes by…. we wait to see if there is an attempt by the seller to take control back…. what will be the counter strategy…? will they try and increase our sense of urgency…. I keep remembering that high need leads to low power’ in negotiations.
…. The phone rings….
We have acceptance of the offer….
Our strategy worked…
The auction is cancelled, it’s Friday afternoon and the auction for Saturday is cancelled…. we own in Woolloomooloo.
Quickly we move from the thrill of success to the business of planning the renovations and preparing the submissions for Strata Committee approval. No time to waste.
Planning begins with another walk through, because we only saw the property for a total of 10 minutes in our inspections…let’s check out what we have and what we can do.
You can see our video walk through and design concepts at our website www.edwardsmckiedesign.com.au on the Properties page for 413, 63 Crown Street, Woolloomooloo.
Regular progress updates will be posted as we aim to get this renovation completed in 6-8 weeks! Track out progress and see if we can achieve our design goals on budget and in timeframe.