amateurs always seem to come up with ways to negotiate that works better than negotiating techniques employed by the pros. Let me tell you about J.J. He worked for the Mercer County school system near Seattle and wanted to buy a small piece of land on which to put the trailer on Hood Canal, about 70 miles away from where he lived.
spent the weekend pouring over the ads in the paper and finally found the ad for the property, which seemed to satisfy his needs. He contacted the owner and agreed to meet him on a lot of the typical Seattle rainy day. He and the seller walked across the land for a few hours and then got down to brass tacks. After the price was agreed, J.J. , said, "I like a lot, and I like the price, and now there is just one problem: I do not have any money there any way that I could buy this much time on ?"
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owner, frustrated at what was invested in the afternoon driving a lot and shows he realized there was nothing to lose with a vision of what JJ had in mind. He led off by figuring how much he wanted to pay and what the interest rate would apply. He also wanted 30% down payment. The first thing that came from JJ mouth was pure gold: "How long will I have to make the payment before I saved up enough for a down payment, " What is it amounted to a zero interest loan for as long as it took a 30% down payment to accumulate.
From the owners standpoint, a lot has been sold and as long as he would have got 30% of the cost, all you had to do to get the payments started to sign the purchase agreement. From JJ's point of view, he bought his dream a lot with nothing down and no interest for a few years. If times have changed, and he was unable to complete his purchase, he would have no lingering liability for payment. He could simply walk away and leave your contract without further obligation to pay.
JJ's immortal words to his owner really getting motivated to do the job of trooping through the wet, cold underbrush for a few hours before asking his question is hard to beat when you buy something with a little down and zero interest. Try next time you are prepared to buy anything from the owner.
option negotiation is limited to their own creativity and negotiation skills. Here are some teasers to stimulate your negotiations:
A. Use a set interval, with an occasional contributing to increase the repayment of principal are counted towards the purchase price. This will effectively provide you with a zero-rate financing until you exercise the option. ie $ 1000 for 1 years. Then $ 2000 for another year. Then $ 3000, etc.
Option B. Increase in price by 5% every three years with the extension. Or a set dollar amount. or the $ 250,000 building to add $ 10,000 for one year. This limits the risk to the original amount paid for a share of future profits.
C. Use your own efforts to upgrade the property through the re-habits, upgrading, market and feasibility studies, engineering plans, re-zoning, etc. as an option consideration. Assign all your results Optionor if you do not quit.
D. Use of exercise for an option as well as fees for other options on different piece of property - even the paper / property / rental company /
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E. Use your knowledge and communication in solving problems in real estate management, finance, construction, land development, the purchase option.
F. Instead of putting money into an escrow account as an option, pledge CDs, money market check drawn on an account bearing interest, tax certificate, note. In this way, your money earns interest in the course closes.
G. 'How long will I have to pay before I saved up enough money for a down payment? Use the rate contract to extend the length of time you control the property so that the rate of purchase option, which, when completed, will give you the option for a given period of time, plus negotiate extensions, which when achieved, will lead to a purchase agreement with a lot of contingency built in to delay the actual closing date. This will give you time to find any financing or a buyer.
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