Seasoned Negotiators Opinions Needed

[Perry]

This is an odd-ball, for me. It's almost, but not quite, the
opposite of “don't fall in love with the property, fall in love
with the deal.”

This involves a family member, buying home No. 1 in one
city, while living in another. An inspection has been done,
via a flying weekend visit.

So when I set down a potential strategy, things aren't the same
when the property (first owned home) is the focus, rather
than the deal. Neither finance (which is pre-approved) nor
prior sale are issues because they're vacating a rental.

Here's my preliminary thoughts. Rip into them!

Observations

I don't think you really need it, but you, xxxx or your lawyer
can contact me at most any time, if you have a question/
request, etc.

Now, I'm in two minds as to whether an oral offer should
be made, initially, then followed by a written one confirming it.

The best tactic may be to telephone the RE agent and tell her
that a written offer will be sent by courier, with a substantial
deposit. Usual thing, acceptance (banking) the cheque is
taken as acceptance of offer. Otherwise, the cheque must
be returned. The lawyer will know how to phrase that condition.

Summary (as I recall our chat and with addendums)

Do a title check (lawyer)

Maybe even a registered chattels and credit check on the
vendor, if enough details are known. Because, if the vendor
owes money on an item like a car (registered chattel) or is
a 'client' of a credit reporting agency, your cash offer gets
even more alluring.

1) make a written/oral(?) offer of $245k, conditional only on:

* a LIM report (?) being satisfactory to the purchaser/nominee

* and a builders inspection/survey (whatever the locals call them)
being satisfactory to the purchaser/nominee

Given the season, you may orally hint that the LIM report condition
could be dropped, if the Council can't provide it quickly enough. But
maybe still retain the option to opt out, (as with the conditions listed
below) IF a LIM is a condition AND the report received after Xmas
is bad, bad, bad.

Then, with written offer:

2) Attach a deposit of $20-25k (stop screaming, lawyer!)

3) Possession* before Xmas, BUT they can live there, rent-free,
until settlement date in late Jan/early Feb.

(* really means transfer of ownership/title)

4) Settlement late Jan/early Feb.

One condition will be that there will be no material change in
the condition of the property (house and grounds) between
possession date and settlement date (their rent-free period)
or the deal's off and the deposit must be refunded with 10%
added as a penalty. (photos might be good)

Another: the house must be clean and tidy on settlement date.
or the deal's off and the deposit must be refunded with 10%
added as a penalty. (again, photos might be good)

Another: they must not move out prematurely and leave the house
empty (i.e. subject to vandalism) except as negotiated in
writing with you, or the deal's off and the deposit must be
refunded with 10% added as a penalty.

Corollary comments

As for the first that offers always loses, remember that
they have made the first offer: it's just that it's called the
asking price.

Who's going to own it? Might be a good time to set up
a Trust, methinks.

Either way, it's important that the written offer be signed
by xxxxxxx as nominee.

Remember that once Xmas draws nigh, most everything
grinds to a halt for 3 weeks, at best. Possibly four!

[shanenz]

Maybe even a registered chattels and credit check on the
vendor, if enough details are known. Because, if the vendor
owes money on an item like a car (registered chattel) or is
a 'client' of a credit reporting agency, your cash offer gets
even more alluring.

- What a great idea , never thought of doing that thank you for my latest weapon in my arsonal

[drelly]

er... I don't think you're meant to do credit checks without the person's approval.

[Perry]

er... I don't think you're meant to do credit checks without the person's approval.

Interesting point.

A perusal of the Privacy Act Principles does seem to
support your view. However, it seems that the onus is
on the agency and if the entity was a regular client
who sought reports on people for tenancy purposes,
I suspect that there would be no demur.

[tricky]

Hi Perry,
I'm having trouble following what you are trying to do.
Do you want to buy a property which a family member loves?
Why not just buy it?
Make an offer at market value with the builders report clause.

I'm not sure why you are mentioning those 'hard arsed' and 'take it or leave' strategies like charging a 10% penalty on the deposit refund.

Are you trying to woo the seller or knock them into shape?

[Dean@Massiveaction]

I'm with you Tricky. I'm a good negotiator Perry but I haven't the faintest idea what you're asking us to comment on. You're trying to buy a property for a third party?? Why are you attaching deposit cheques on conditional agreement?? The rest of the post is totally lost on me. Please rephrase in commoners English :-)

[Perry]

All I’m doing is offering ideas/ suggestions.
I’m not buying the property.

I'm not sure why you are mentioning those 'hard arsed'
and 'take it or leave' strategies like charging a 10%
penalty on the deposit refund.

If ownership transfers and the (by then ex-)vendor
remains in residence, there needs to be adequate
come-back if the rent-free, resident ex-vendor lets
things go at/on the property.

The deposit cheque was to ‘sweeten’ the offer. It’s
been on the market for 5 months.

[xris]

Hello Perry,

I'm with Tricky and Pooomba here on the pointb about being hard to understand.

But, I'm in a picky mood, so a couple of points stand out.

Maybe even a registered chattels and credit check on the
vendor, if enough details are known. Because, if the vendor
owes money on an item like a car (registered chattel) or is
a 'client' of a credit reporting agency, your cash offer gets
even more alluring.

Are you buying the car as a chattel with the house? Messy, don't do it.

3) Possession* before Xmas, BUT they can live there, rent-free,
until settlement date in late Jan/early Feb.

(* really means transfer of ownership/title)

4) Settlement late Jan/early Feb.

One condition will be that there will be no material change in
the condition of the property (house and grounds) between
possession date and settlement date (their rent-free period)
or the deal's off and the deposit must be refunded with 10%
added as a penalty. (photos might be good)

Another: the house must be clean and tidy on settlement date.
or the deal's off and the deposit must be refunded with 10%
added as a penalty. (again, photos might be good)

Another: they must not move out prematurely and leave the house
empty (i.e. subject to vandalism) except as negotiated in
writing with you, or the deal's off and the deposit must be
refunded with 10% added as a penalty.

It looks like you're muddling up possession with settlement. Ownership and title change on settlement, not possession, even though this is usually the same. Your vendors in your scenario are therefore owner occupiers in whose business you have no say, or are your tenants, which binds you both to the RTA, which in turn will prevent you from attaching some of the conditions you mention.

As for the first that offers always loses, remember that
they have made the first offer: it's just that it's called the
asking price.


This is not an offer by the vendor to you, it is an invitation for you to make an offer to the vendor.

xris

[Perry]

Hell, I almost feel as if I'm being 'picked on,' here.

Are you buying the car as a chattel with the house? Messy,
don't do it.

No – it was solely to see the level of indebtedness of the
vendor (if any)

It looks like you're muddling up possession with settlement.
Ownership and title change on settlement, not possession,
even though this is usually the same. Your vendors in your
scenario are therefore owner occupiers in whose business
you have no say, or are your tenants, which binds you both
to the RTA, which in turn will prevent you from attaching
some of the conditions you mention.

Maybe. That could be a lawyer resolved thing. You're right
– I did express the possession/settlement thing wrongly,
which makes the point somewhat academic.

The vague, general idea remains unchanged, however. I.e.
the vendor remains in residence until all of: settlement,
possession and transfer of ownership date.

This is not an offer by the vendor to you, it is an invitation
for you to make an offer to the vendor.

Hair splitting. "Entreaty to buy" - whatever. The first person
to "name a price," if you prefer.

[krispedersen]

Credit Check

Haven't read the whole post so apologise Perry if it has been covered since Dave's correct concerns, but if you do a credit check on the wrong person they have enery right to go after you for violating their privacy

Cheers