Negotiating High Value Deals

1. www.propertywizards.com.au NEGOTIATING PROPERTY DEALS VALUE HIGH Your 5-step guide to securing your dream luxury home Your 5-step guide to securing your dream luxury home

2. Welcome to Negotiating High Value Property Deals – Your 5-step guide to securing your dream luxury home. 2 This guide takes you through 5 SIMPLE STEPS to help you understand the intricacies of negotiating a high value property deal. Whether you’re a luxury home buyer or looking for a premium real estate investment, this guide will help you navigate the sometimes-complex world of high-end property buying and associated issues you need to consider. You will learn how to: Step 1: Get all the facts Step 2: Understand the seller’s motivation Step 3: Work out what you’re up against Step 4: Do your price research Step 5: Include what you can in your deal Any information or advice provided in this document is general in nature and does not take into account the particular objectives, financial situation or needs of any person. The material and opinions of the company should not be relied upon when requiring specific advice and, in that regard, readers need to seek further professional help from an appropriately-qualified advisor or lawyer.

3. So, you’ve found your perfect prestige property with everything you could want – in fact you have mentally moved in and are already picturing the lifestyle. But hold on, there’s one more step to get through. You have to buy the property. Here are some tricks of the trade to help you secure your dream home at the best price. Get all the facts If you’re preparing to negotiate on a luxury home, it’s likely you’ve viewed it a few times and you know the home inside out. But what about everything else? Before negotiating there is a world of information that can help you and that you should know. 3 This information can help your negotiation and even inform your decision on whether to go ahead or not. For example, if a major structure is not council-approved, you might want to factor that risk into your valuation and offer. If the price has just come down from $2.5 to $2.3 million, the seller might be more motivated to sell. If they have rejected a few offers, you might get an idea of their bottom line. Ask yourself: What the seller’s price expectation is? How many offers there have been? How long it has been on the market? Has the price changed since listing? What comes with the home, what doesn’t? Is everything in working order? Is everything council-approved? And many other essential items to check If you hadn’t already realised this, you’ll now know there is much more to it than just viewing and falling in love with the home. It’s a massive purchase and you’ll be living with it for a while. So, you want to go into it eyes wide open and ensure you negotiate with complete information at your fingertips. ‘Enjoy the journey!’

4. 4 Understand the seller’s motivation The key is to understand the seller’s motivation. The seller’s agent doesn’t always disclose this information so you sometimes have to work it out. Sellers of high-end properties often don’t care if they sell or not. If they don’t have to sell, they might just wait and see what offers come along - and sometimes even need to be persuaded to sell. Sometimes they will be incredibly stubborn about conceding on price – simply because they can. If the seller doesn’t need to sell but wants to, it makes it an even playing field and it will come down to a price at which you both are happy to transact. Often, you pay a little more than you want to and the sellers accept a little less than they would like. Emotions can get in the way and block your deal or cause you to pay more than you need to. Sellers who have a pressing need to sell, say for financial or family reasons, need a clean, uncomplicated sale and then price often becomes a lesser consideration. They need to take the best price they can get, so your advantage will be speed. If you can make an acceptable, clean offer quickly – giving the seller a secure way out of their predicament, even though it is at a less attractive price than they hoped for, often they will grab it. They don’t know if they will have another such quick, clean offer if they decline.

5. Work out what you’re up against Are you in a buyer’s or a seller’s market? 4 5 Negotiation depends on whether it is a buyer’s or a seller’s market. In a buyer’s market there are fewer buyers and more sellers and conditions are in the buyer’s favour. So, you may have a choice of properties and more negotiating power. If you are the only buyer and the seller needs to sell, you are in a stronger position to make a lower offer with terms and conditions more favourable to you. If there are competing buyers, you have to consider what they might offer and beat them - if you really want the property – though be careful not to pay more than it is worth. An experienced buyer’s agent negotiating a high-end deal on your behalf can navigate through all of these scenarios. They can read the situation, remove the emotion and help negotiate a better result. Seller’s market In a seller’s market, there are more buyers than sellers. The sellers hold the power as they realise that if you don’t buy their home, there is likely someone else not far away, who will. But there are fewer high-end buyers and if you’re serious and come across as so, they will take you seriously. The key is to read the true situation. Sometimes, assuming it is the property you love and want, you can move swiftly with a good offer, and have it accepted before others have a chance. Provided it is a strong and uncomplicated offer, the seller doesn’t know for certain that if they wait for the home open, they will get a better and similarly uncomplicated offer. You, on the other hand, realise, having done your research, that after a home open, prices may be driven up past your offer price so it is worth making a strong offer in advance. If you have to compete with others in a seller’s market, and it’s a lovely home that others are also keen on, you’ll likely have to pay market price. Just ensure you don’t offer more than market price, unless you do it knowingly and are certain that’s what you want to do. Keep your offer uncomplicated while protecting yourself. Buyers should always have a buyer’s agent for higher-end properties, no matter where they are looking or what their budget or experience.

6. Do your price research 6 Once you have found your dream luxury home in the exclusive suburb you are after, you don’t want to lose it. All your hard work and searching has paid off and you must have it. But you don’t want to overpay. Don’t go on gut feel if you’re uncertain what it is worth. Before you even start looking, research the prices in your area, so you know what they sold for, not what they were asking. The two can be very different. The importance of price research is that if you make too low an offer you could lose the very best property you have found. But you could also overpay if you haven’t done your homework. The agent’s asking price is not the same as the property value – it could be well above the value or it could be under-priced. If the property is under-priced, you need to make a fast offer at a reasonable price so that it is accepted before others come along and you have to compete, driving the price up. If it is overpriced, your homework will pay off and you can confidently make the right offer and explain why you have offered that price. That way, you’re less likely to offend a stubborn agent or seller and cause them to dig their heels in. At auctions you don’t have the opportunity to negotiate, but you can often still influence the outcome through your bidding confidence and strategy. Here an experienced buyer’s agent can be invaluable as they know just how to do this effectively.

7. What can you include in your deal? Often there are high-end extras attached to the property, such as automation systems, sound equipment or theatre seats. As a discerning buyer, you want these items included in your deal. These need to be carefully specified in the contract or you could end up having to separately buy them from the seller. 7 Once your negotiating is done and a deal is struck, it is worth being fair and accommodating where it doesn’t cost you, because the goodwill on both sides can be valuable as you move towards settlement. For example, sellers of luxury properties will often be willing to offload many loose content items, such as furniture, at low prices to save them the trouble of moving the items – especially if they are downsizing – provided there is a good relationship between the parties. You may even be able to include them as part of the upfront contract. Everything in the deal is negotiable and in high-value deals sometimes unusual trades are made to accommodate less- common requirements of buyers or sellers. Conclusion Just as there are no two homes the same, every seller is different and so is every negotiation. When you’re dealing at the high- end the differences can be even greater because the stakes are higher. But if you apply these principles, or hire a buyer’s agent to navigate the purchase for you, you’ll be five steps ahead of other buyers in the market and sure to land yourself a better deal than you would otherwise have done. Buyer’s agents do it on a daily basis and know all the tricks of the trade. They can devise a strategy and make the right move at the right time to help you achieve a better deal

8. Whether you’re looking for your dream home or are a prestige buyer or seasoned investor looking to purchase a second or third investment property, Property Wizards can find the right property to meet your investment strategy, and negotiate the lowest possible price and the best terms and conditions. 8 Proven and Trusted Buyer’s Agents Tel (08) 9381-7450 International Tel +618 9381-7450 www.propertywizards.com.au info@propertywizards.com.au 121 Churchill Avenue, Subiaco Perth WA 6008 Licensed Property Buyer’s Agents Licensed Real Estate Agents Licensed Finance and Mortgage Brokers Property Investment Advisors Subdivision and Development Consultants Member REIWA Member MFAA Licensed Real Estate Agent, Licensee T/C 50550 Licensed Finance Brokers CR 490157 of House & Home Loans Pty Ltd ACL 364974 Property Wizards Pty Ltd atf The Streets Ahead Unit Trust ABN 61 772 441 085