How to negotiate via private sale or treaty

In the coming months there will be a big shift to properties selling via private sale, aka private treaty. Here’s a few tips to help you negotiate your purchase better:

Work out how much you are willing to pay.

Firstly, and most importantly you need to work out the value of the property. Use recent comparable sales and think about what the property is worth to you. Yes agents will generally give you a guide by either advertising an asking price or giving you an indicative selling range but that does not mean you should forgo your own valuation process. 

Work out how the agent will conduct the negotiations.

Secondly, speak to the agent and ask them how they plan on running the private sale process. Will it be a call for best and final offer? Or will they be prepared to run a dutch auction? Let them know you have interest and if any acceptable offers are received you would like to be kept in the loop. This doesn’t mean telling me them your budget or exactly what you might be prepared to go to! 

Ask the agent questions.

Here are some questions you can ask the agent, which might help you through the process:

Have there been any other offers made on the property and if so, what were they? The agent will probably not tell you what the other offers will be, but occasionally they will.

How long has the property been on the market and are the owners planning on going to auction if it doesn’t sell via private sale?

Will the vendor consider taking an offer subject to building and pest inspection or subject to finance?

What is the vendors settlement term and are they flexible on this? Sometimes owners may be flexible on price, if you give them a settlement date which they prefer, or giving the vendor the settlement date they want may be the thing that could get you across the line

A written offer is a strong offer.

Thirdly, prepare and present your initial offer in writing either via email or on the contract of sale. If it’s made on a contract of sale it carries a lot of weight when the agent submits it to the vendor… this includes the price, and any terms attached. For example, settlement times, deposit payments, and any special conditions and clauses you need to include i.e.; subject to finance or building inspection. 

Good luck out there, and call in the pro’s if you want to get it done for the best price possible!