Friday, July 24, 1998 — North Shore News - 47

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SHTOTHSSHOHHOSSSHHEHSHSHSSHHETSHSSSHOKEHHSSSEHHOOCHHSSOHTESCESHHF®OSCHOHSHSSHOOEHHSHOSOEHEHOESSHHSOHOHSEEHIOVIOSVHOE

Invest at any price? For go

HERE is a thought
that I’m sure will raise
your eyebrows.

“I will buy any property
yeu wish to sell for any price
you want!” You want to scll
your onc bedroom condo-
minium in Youbou and you
want $600,000? OK, I'l buy
it — full price!

Have I lost any mind?
No. ; will pay your price but
only if you accept my terms
and conditions which are: a
ten dollar down payment
with you to carry the bal-
ance, at no interest, for 150
years. Now, I’m being
Fidiculous 1 know but my
purpose is to emphasize a
very important investment
point...

Most investors focus only
On getting the price as low
as possible. This makes 2 lot
of sense when buying a
home. However, investment
Property has a different set
of axioms. One difference is
in the higher price I might
be willing to pay to acquire a
property.

* Avital key in acquiring
income property is in obtain-
ing favorable terras and ‘con-

_ ‘digions chat will form part of

the Contract of. Purchase and
Sale.

: "Unfortunately, term
- negotiations are often for-

gotten about in the pursuit

of obtaining a low price.

Occasionally, I have paid:

more for a property. than the

. selicr was asking.

Why would. I do this? To
obtain the terms and cond

_ tions that make the i: invest-
ment work for me...

"’ Negotiating favorable. terms
can be the difference ©
between a marginal invest-
ment and a great: investment.

. Sellers obviously want the
highest price possible and

buyers.want the opposite.

These. are, the natural negoti-

ing points for oth

parties.

Once in a white a buyer

will make what realtors term

a “low-ball” offer to try and
acquire a property at a bar.
gain price. This strategy
sometimes makes sciisi:, for
one never knows the real
motivation that lies behind a
seller's desire to sell.

However, most sellers feel
rightcous indignation when
presented »-ith a “low-ball”
offer and refuse to even
entertain further discussions.

In presenting offers, I
have found that usually the
only item the seller is inter-
ested in is “how much is the
offer?”

An experienced realtor
will usually try to avoid an
immediate response to this”
qu uestion as the realtor wants

¢ seller to see the total pic-
ture the offer involves.
Nonetheless, sellers often
will not really “hear” other
thoughts until thev have
heard “the offered price.”

A strategy used by many
sagacious investors and real-
tors is to present an offer
that will be as close to the
asking price as possible. In
some cases an offer above
the asking price may be a
very important strategy for a
number of valid reasons.

The first may be to over-
come the selfer’s fixation
with getting “the price” he
wants. Thus an offer that
‘ appears” & to give the seller

¢ price” he is hoping for
immediately. puts the seller
in a more receptive frame of
mind. After all, he is getting

“the price” he wants. Now
that i have the seller’s atren-
tion and interest he/she may
be far more receptive to the
terms 2nd conditions in mv
offer.

You may think that the
terms and conditions J
might suggest would immce-
diately change the seller's
receptive state of mind. Not
so. The conditions and ierms
I may need, often are, terms
that the seller can accept.
Let’s look at some examples.

A “term” may be as sim-
ple as. the selier carrying a
small second mortgage of
say $9,000, ac market inter-
est rates but with no pay-
ments for the first 7 months.
This would free up some
needed cash flow in these
months that could be used
for upgrading the property
or repaying any short terns
loans used for the down pay-

ment.

Another example may be
that | have enough cash for
the down payment yet not
enough for the costs of
arranging the mortgage,
taxes, inspection reports,
closing costs etc. that are
usually paid by the buyer.

In return for the seller
getting his “price,” I ask the
seller to pay for these costs.
Does this mean that my
offer is really less than the
stated price? Yes! Will the
scHler give me this break?
Somenmes the anaiver will
be yes — depending upon
the scHer’s situation. At the
very least, the selicr will
probably give considerable
thought to my offer.
Negotiation is, after all, a
process to satisfy both
party’s needs.

Focusing on terms and
conditions can also work for

the seller. Recently, a client

2n into an anforeseen finan-
cial set-back. His regular
income was gone and he
desperately needed to reduce
his costs.

One of his investment
properties needed monthly
finencial supvort of more
than $800. The obvious
answer was to scll, yet the
real estate market was com-
pletely flat. What did he do?
He offered che property for
sale with no down payment
and the buyer to assume the
existing first mortgage.

Also a second mortgage
with no payments for one
year wes a condition of the
contract.

To manoeuvre around the
necessity of the bank approv-
ing che assumption of the
first inortgage the transac-
tion was strucrured as an
“agreement tor sale.” The

pd terms

end result was a quick sale
(in a very slow market) with
the title remaining with the
sellee until all financing was
repaid. The seller has there-
fore, by using creative terms,
successfully reduced his
monthly financial obliga-
tions.

I ary not suggesting that
price is not important — it
is? However, do not over
took the pivotal role that
obtzisiing favorable terms
and conditions can play in
acquiring investment proper-

© as Donald Trump might
say ... “itis all in the art of
the deal.”

— Michael Dowsy is the
vice-president of. special pro-
Jjecés at Century
Prudensial Ewates Led. and is
a@ long-time West Vancouver
resident. Call him at 273-
1744.

Garden compeiition deadline extended |

Deana Lancaster

News Reporter deana@nsnews.com
ATTENTION North Shore Green

Thumbs.

You haven’t missed the deadline to enter your
garden in the North Shore Gardens Contest for

According to N.S. Gardens Contest Socicty
president Bill Granger, judging has already

gun for carly nominations, but the judging
team is prepared to continue into Au

Final judging will include gardens in each cat-
egory that scored highest in the preliminary

judging.

Entry forms arc available at cach of the
municipal falls, and at all North Shore garden

centres.

Return them to the City of North Vancouver

Municipal Hall, marked

east entrance.
Best of fuck!

AT A GLANCE

“Attention:
Maglien,” and ify you're dropping it off after 4:30
on Friday, deposit it in the mail slot at the lower

Maria

THE Oasis Car Wash won second place for Best Small Commerc!
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This year, it'is~

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NUMBER OF BEDROOMS:

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ame

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