The vendor accepts an offer sale in the knowledge that you will complete quickly, with the vendor sacrificing the asking price. You obtain a property with at least a 20% margin of profit.
Throughout the negotiations there is a limiting figure that controls how much you as a property investor can pay for any property – your ceiling figure. For the deal to stand up you must never negotiate past this figure. Keep this figure in your mind at every stage throughout negotiations, every offer and counter offer. Going beyond this figure could result in loosing a great deal of money.
Always remember, in most cases the vendor needs to sell as quickly as possible. At this point in the negotiations, it’s in your interests to put the vendor under ‘Emotional Time Pressure’. At each stage of the negotiation, your skill will be required to ‘play for time’ or to use strategic delaying tactics, in doing so you will be putting the vendor under emotional stress. The longer the period of negotiation takes – the greater build up of emotional pressure on the vendor, resulting in the vendor growing tired of negotiating. Realising he/she will not wish to go through another set of negotiations with another buyer should these fall through, the vendor often strikes a deal that suits you. It’s nearly always the case that the vendor wants to sell quickly and move on with his or her life. Emotional pressure can prove to be an