Mistake number two – They are too cautious in their negotiations.
With the odd and often notable exception it’s part of the British psyche not to want to cause offence. Add to this that we often accept the asking price without questioning it, and the result is often weak negotiations. Let me explain.
When most investors receive property details and look at the asking price, unless it is obviously miles over the top, they will automatically accept that it is where negotiations will start.
Then, in the spirit of “playing the game” they’ll more than likely limit their offer to 5% below the asking price. Any more than this could trigger fears of rejection – what if the vendor says no? Or of criticism of what “they” might say? As in “you can’t put in an offer that low”. Anyway, who are the “they” that so mysteriously direct what we do so often?
The point here is that far too many potential investor’s negotiations are emotion driven and are not financially driven. If you have a figure at which that property works for you, that is the price you should be trying to achieve. If it’s rejected, so what? Move on to the next property. There’s no point in having an offer accepted if it means you now own an unsuitable property.
In the next post we’ll take a look at mistake number 3
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, Author & Property Investor