Tony Brazier

www.braziers.co.nz

Tony Brazier

The Press - Tuesday 2 June 2009

Negotiating the Agreement

So, you’ve made an offer on the property of your choice. While you sit nervously waiting ensure you are told of the likely timing of the presentation, eg. tonight at the vendor’s home. Expect immediate communication of how it went. Don’t expect the salesperson to tell you over the phone what, if any, changes were made. They know from experience that if they do you will have thought of a hundred reasons why not to accept the change(s) by the time they see you. Be prepared to stay up a bit longer from going to bed to complete a negotiation. Don’t expect to get any sleep if you do go to bed.

Time kills deals. Letting someone ‘sleep on it’ only allows negativity to set in and stall proceedings.

You may have put clauses for further terms of sale in your offer (ie. conditions). Vendors can do this too. (Take care at your time of confirmation that the vendor has already satisfied their condition(s) otherwise it will not be totally unconditional). The vendor may also change one or more of your conditions, eg. time frames, price, settlement date. This affectively makes your offer null and void, ie. he/she didn’t accept it as you gave it. Their ‘counter offer’ is now an offer from them to you, for you to accept or not. It should be accompanied by initials beside every change to show the difference between your offer and theirs. You may ‘counter’ back which in turn makes their ‘offer’ out of existence. If your second attempt at offer is not as attractive as the first, (due to whatever reason,) the vendor cannot fall back on your first offer as it is already out of existence.

Try to use the correct terminology. An ‘offer’ is the promise you make in return for a transfer of ‘consideration’. Consideration can be money, other property, cars or other items as part payment for the consideration of the property sought. A ‘conditional agreement’ is what you often have at the end of your negotiation if there are still items for the purchaser, (or vendor) to check out. If there are no items to check it is referred to as an ‘unconditional agreement’. This is never quite the case as in the fine print the purchaser’s solicitor has the right to check Title (and LIM if circled) so vendors shouldn’t quite get the champagne out yet. Neither should the sales agency disburse the deposit until such time as they have established that the purchaser’s solicitor is satisfied with the ‘fine print’ items.

An ‘unconditional offer’ is what a vendor is after, and once the fax comes through from the purchaser’s solicitor saying it is ‘unconditional’, (and the vendor had no conditions to satisfy,) then now for the first time you can start using the word ‘contract’.

A contract is a legally binding agreement and includes all conditions inserted to be met within the prescribed timeframes. As mentioned in an earlier article the ‘warranties and undertakings’, if broken, cannot automatically enforce a cancellation of the contract but it becomes subject to claims for specific performance and damages, so do what you said you would in the contract or it could cost you dearly.

Part of the the salesperson’s job is to keep the negotiation amicable between parties. You may not always like the way the other party is negotiating but remember buying and selling property is one of the most stressful things people do. You are not buying the vendor (or purchaser). They will be gone by settlement. You are however buying the property. It will be there as long as you want it to be. There is a lot of psychology in selling, so don’t ever pull out of negotiations because of a dislike for another party, only do so for a dislike of the property. Buyers will sometimes do this when they find themselves in a multi-offer situation letting the other parties dictate whether they will bother to continue. The old saying goes, “The answer is always no if you don’t ask the question”. Like lotto, you’ve got to be in to win.