How do you get the best deal on a property?
By making yourself the preferred buyer.
Because, as you know, the profit you make in a chunk deal starts with what you pay for a property, doesn’t it?
How do you become the preferred buyer of a property?
Gain the trust of the seller
By going out of your way to find out what the buyer needs and wants…
You put yourself in a better position to meet those requirements.
That includes what the buyer ultimately needs from the sale of the property…
Why he’s selling…
How fast—or slow—the seller needs to get out of the property…
And other tangible but sometimes hidden needs like tax protection…
A leaseback agreement…
Post-sale access, easement or other unusual needs.
Find out why the seller is selling the property.
For instance, do they need the money?
And if so, how soon do they need the money?
If this is the situation, one way to become the preferred buyer is offer a low price…
But come in with a higher earnest money deposit.
Say, for example, that you find out from the agent that the seller has just had a judgment against him…
Or he needs a chunk of money to keep the doors open in his business…
Find out what that amount is.
Find out the seller’s situation
Say, for instance, the seller needed $30,000 within a short period of time…
And the property is worth $250,000…
But because of bad credit or other issues, he can’t get that money without selling the property.
So, he puts his property up for sale at a bargain price.
Now, which buyer is he going to go with…
The buyer who offers full price, but with a 60-day settlement period and small deposit…
Or the buyer who brings him the money he desperately needs, in hand…
But offers less than the asking price?
You want to be the second buyer, don’t you?
But you can’t be unless you know what the buyer’s situation truly is.
Finding out the needs and wants of a buyer is how you become the preferred buyer.
Build trust with the agent
The hard part of that effort can be with the agent…
Becoming the preferred buyer may also mean building that kind relationship with the agent, even before you do with the seller…
If an agent is busy, that will be harder to do.
But you got to make the effort.
That means talking to the agent, letting him know what you’re about…
An agent doesn’t want to waste time…
Because time is what they don’t have if they’re worth their salt.
But even when that’s the case, you’ve got to make the agent see you not as bother…
But as a real buyer.
That means making yourself as attractive as you can as a buyer…
Like getting prequalified for financing…
Being specific about the type of property you want to buy…
And the locations you’re interested in.
It helps, as the example above shows, to let the agent know what your capabilities are…
Including becoming a JV partner…
Flexibility with settlement periods…
Handling the subdivision of a block of land…
Or any other strategy that might be helpful in making the agent understand that you’re a serious buyer…
And that you are willing to do what it takes to get a bargain on a property.
Target slow selling properties
Cultivate relationships with three or four agents ‘round about your target areas…
But also do your own research in those property markets…
Find properties that have been on the market longer than three months…
Six months is even better.
Because after a property has been on the market a few months and hasn’t sold…
There’s either a problem with the property…
With the agent.
Or the seller.
Most of the time, the property is priced too high…
Which means there’s a problem with the seller.
Those are opportunities to become the preferred buyer in the seller’s eyes…
Because you’re might well be the only buyer.
In that situation, you can offer the seller a lowball price…
He may not take it today…
In fact, he probably won’t…
But talk to the seller every other week or so…
And ask the agent how long he’s been trying to sell the property.
Ask the seller what kind of contract he has with the agent…
And if he’s pleased with the agent’s efforts.
Get on the seller’s side…
Sympathize with him…
Build a rapport with him.
And then let him think about your offer.
It’s not rocket science
The better your relationship with the seller and the agent…
The more you will find out about the reasons behind the sale of the property…
And what’s really important to the seller.
It’s not rocket science…
It’s people science.
It’s putting your relationship-building skills to use in the right way.
Chances are good that when you do these things…
When you build relationships with agents and sellers when you can…
You get rewarded with the deal…
And sometimes, you get even a better deal than you bargained for.