Page 103 - Paulisms: Gold Nuggets for Small Business

You are looking to buy a building. The sellers have a price of say $500,000. You need to have a strategy and think of what the other person is thinking and what will be their actions. You offer $400,000 but you have already worked out what they will come back at and whether you are prepared to pay that amount, in this case, say, $450,000. They come back at $450,000. Bingo, you won. You then say, ‘Ok, I’ll give you that price, but I’ll pay you in a year’s time’, or in three months’ time, or whatever.
I’ve pulled many of these deals off. You might have to lease the building from the seller at half the normal lease amount for twelve months, or live in and rent the house off the vendor for a year until settlement (which we did once as we had no money) or you go in early and do some work, or it simply gives you time to sell something to pay for it. The thing in their mind is they got their price and they’re happy and as a result will happily negotiate the terms. To stress this again: the main point is that if the vendor gets their price, they become flexible on terms. You’ve got to feel out the vendor and work out how they are going to react.
Over the years I’ve put in offers on property mostly with terms tagged with the offer, but also clean offers. Never subject to finance. When the real estate agent has gone away with the offer, I’ve written down what the vendor would come back with. I know it’s a bit of an art, but you can develop this skill.
For example, on one property we offered $100,000 less than what they wanted. It was a builder’s home, the market was flat and he didn’t live there anymore. I detected he was