Be aware that there can be a number of variables when negotiating a contract. The vendor has the property on the market because they wish to sell and you are looking because you wish to buy. There are a number of variables that can allow you to satisfy the vendor’s requirements and reflect your own needs. Most mortgage documents or contracts for sale can reflect any number of variables whether they be extended settlement dates, vendor finance or improvements to be undertaken by the vendor prior to settlement.
Consider the state of the market at the time and whether you are in a position to negotiate with the vendor. If the market is running high then your opportunities to negotiate are reduced. Some vendors have a sale price in mind that they are not prepared to move from. Whilst this may be in excess of the price you are prepared to pay you may be able to negotiate an extended settlement or a degree of vendor finance that satisfies the vendor’s need to match a price and your own financial ability to pay such price.
For example if a vendor desires $100,000 for a property and you have already decided your upper limit is $90,000, it may be possible to agree to the $100,000 contract price with the first $90,000 being paid at settlement and the remaining $10,000 at a 12 or 24 months time lapse.
If a vendor has a number of properties for sale it is in his interest to keep the sale price as high as possible so that further sales are governed by the achieved sale price on the property you are interested in. The vendor may be more interested in the sale price reflected on the contract to influence his further sales and therefore may be more inclined to offer a degree of time for you to achieve the final payment.
If you are looking at buying vacant land within a development that consists of a number of allotments it is of assistance to consider the developer’s position.
Most developers are in a position where they need to borrow money to undertake the development and pay for construction costs and the like. The process of borrowing money is much easier for the developer if there is an established sales record, shall we say “ a number of contracts under his/her belt” when he/she approaches his/her financier. Developers can therefore be more receptive to negotiation at the very beginning of a development, especially with regard to settlement date.