7 Secrets of a successful property investor - Secret #3 - Negotiation

The 3^rd secret I am going to share with you is how to negotiate with a developer on price for your property and here are the  questions I go to them with:

• Ask the developer - How many have you sold to other investors? Because if you hear that 20% or more have been sold to other investors you will be competing on completion and this could impact your rental potential and you should leave this development alone.
  
• Ask the developer to be shown a surveyors report for the valuation of the property. You want an independent valuation from a professional - not just what he tells you.
  
• Ask the developer also to be shown that Joe public has paid the market price declared to you. You want to make sure that any discount you are being offered is genuine discount. Evidence of true value again here backs up what the market value is.
  

When you have all this information you are now ready to negotiate.

·         Tell him you are ready to go to exchange in 4 weeks, with no chain, cash buyer.

Now before you can claim this you will need to have your finance in place so it’s a pre-requisite that you have spoken to a good mortgage broker – if you haven’t got one then please ask us to recommend one our bank of preferred brokers. The mortgage broker will need to know that these timescales are required because he or she will know the lenders that can turn around an application in 4 weeks. For a list of benefits of using a dedicated mortgage broker click here  – and then you will also have to “prime” a good lawyer to do your legal work in equally quick time – so talk to a lawyer in advance of your conversation with the developer.

Then ask the developer how much discount he will offer you and tell him you are able to exchange in 4 weeks  – you have no chain and you are buying as an investment.

He will then be very motivated to offer a discount. Depending on the location and the demand for that location. Some extremely high demand areas will only bear small discounts but it is worth trying for as much as you can get.

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