Submitting offers on property in NSW
One of the most important parts of a buyers’ agents service is submitting offers on behalf of clients.
While the Property, Stock and Business Agents Act 2002 (PSBA Act) does not require a purchaser to submit a written offer, offers are usually best conveyed to the selling agent both verbally and in writing, which confirms to the vendor that it is a serious offer and clearly sets out the purchaser’s terms. The PSBA Act does impose obligations upon selling agents as to how they communicate any offers they receive to their vendors.
When submitting a written offer to the selling agent it is prudent to include the following details:
Property details and client’s name (unless confidentiality is required)
Amount of offer
Settlement period (i.e. either as per contract [usually 42 days], or a different time frame as instructed by your client);
Offer expiry date and time (if any)
Whether the offer is subject to any conditions (e.g. subject to due diligence, conducting a building inspection having the contract examined by a solicitor, arranging a bank valuation required for finance approval etc)
Whether exchange of contracts is to include a five day (or longer) cooling off period, or if the exchange is to be unconditional (i.e. a signed section 66W certificate will be supplied).
When submitting an offer for a pre-auction purchase or a private treaty sale on a property that is competitively sought after, it is generally advisable to keep the conditions of the offer as simple and uncomplicated as possible.
An offer to provide a signed contract, deposit cheque and without any special conditions or cooling off period requirements is likely to be far more appealing to a vendor than an offer with preconditions and delays. Vendors will sometimes accept a slightly lesser amount for the surety of an unconditional contract.
If your client’s offer is accepted, you should ensure that exchange occurs as quickly as possible. This will minimise the risks of the property being sold to another buyer.
Maintain regular lines of communication with all parties all the way through to exchange of contracts, ensuring that you also act in accordance with your instructions.
By Henry Wilkinson – Homesearch Solutions, for the NSW Real Estate Institute 2011
Win Win Negotiation
Win-Win Negotiation
Finding a fair compromise
From www.mindtools.com
Do you feel that someone is continually taking advantage of you? Do you seem to have to fight your corner aggressively, or ally with others, to win the resources you need? Or do you struggle to get what you want from people whose help you need, but over whom you have little direct authority? If so, you may need to brush up your win-win negotiation skills.
Effective negotiation helps you to resolve situations where what you want conflicts with what someone else wants. The aim of win-win negotiation is to find a solution that is acceptable to both parties, and leaves both parties feeling that they’ve won, in some way, after the event.
There are different styles of negotiation, depending on circumstances.
Where you do not expect to deal with people ever again and you do not need their goodwill, then it may be appropriate to “play hardball”, seeking to win a negotiation while the other person loses out. Many people go through this when they buy or sell a house – this is why house-buying can be such a confrontational and unpleasant experience.
Similarly, where there is a great deal at stake in a negotiation, then it may be appropriate to prepare in detail and legitimate “gamesmanship” to gain advantage. Anyone who has been involved with large sales negotiations will be familiar with this.
Neither of these approaches is usually much good for resolving disputes with people with whom you have an ongoing relationship: If one person plays hardball, then this disadvantages the other person – this may, quite fairly, lead to reprisal later. Similarly, using tricks and manipulation during a negotiation can undermine trust and damage teamwork. While a manipulative person may not get caught out if negotiation is infrequent, this is not the case when people work together routinely. Here, honesty and openness are almost always the best policies.
Preparing for a successful negotiation…
Depending on the scale of the disagreement, some preparation may be appropriate for conducting a successful negotiation.
For small disagreements, excessive preparation can be counter-productive because it takes time that is better used elsewhere. It can also be seen as manipulative because, just as it strengthens your position, it can weaken the other person’s.
However, if you need to resolve a major disagreement, then make sure you prepare thoroughly. Using our free worksheet, think through the following points before you start negotiating:
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Goals: what do you want to get out of the negotiation? What do you think the other person wants?
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Trades: What do you and the other person have that you can trade? What do you each have that the other wants? What are you each comfortable giving away?
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Alternatives: if you don’t reach agreement with the other person, what alternatives do you have? Are these good or bad? How much does it matter if you do not reach agreement? Does failure to reach an agreement cut you out of future opportunities? And what alternatives might the other person have?
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Relationships: what is the history of the relationship? Could or should this history impact the negotiation? Will there be any hidden issues that may influence the negotiation? How will you handle these?
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Expected outcomes: what outcome will people be expecting from this negotiation? What has the outcome been in the past, and what precedents have been set?
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The consequences: what are the consequences for you of winning or losing this negotiation? What are the consequences for the other person?
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Power: who has what power in the relationship? Who controls resources? Who stands to lose the most if agreement isn’t reached? What power does the other person have to deliver what you hope for?
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Possible solutions: based on all of the considerations, what possible compromises might there be?
Style is critical…
For a negotiation to be ‘win-win’, both parties should feel positive about the negotiation once it’s over. This helps people keep good working relationships afterwards. This governs the style of the negotiation – histrionics and displays of emotion are clearly inappropriate because they undermine the rational basis of the negotiation and because they bring a manipulative aspect to them.
Despite this, emotion can be an important subject of discussion because people’s emotional needs must fairly be met. If emotion is not discussed where it needs to be, then the agreement reached can be unsatisfactory and temporary. Be as detached as possible when discussing your own emotions – perhaps discuss them as if they belong to someone else.
Negotiating successfully…
The negotiation itself is a careful exploration of your position and the other person’s position, with the goal of finding a mutually acceptable compromise that gives you both as much of what you want as possible. People’s positions are rarely as fundamentally opposed as they may initially appear – the other person may have very different goals from the ones you expect!
In an ideal situation, you will find that the other person wants what you are prepared to trade, and that you are prepared to give what the other person wants.
If this is not the case and one person must give way, then it is fair for this person to try to negotiate some form of compensation for doing so – the scale of this compensation will often depend on the many of the factors we discussed above. Ultimately, both sides should feel comfortable with the final solution if the agreement is to be considered win-win.
Only consider win-lose negotiation if you don’t need to have an ongoing relationship with the other party as, having lost, they are unlikely to want to work with you again. Equally, you should expect that if they need to fulfill some part of a deal in which you have “won,” they may be uncooperative and legalistic about the way they do this.
Negotiation talk
When talking to the selling agent, make sure that you are the one asking the questions and not the other way around.
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