You want to buy a property with proven development potential. The vendor wants to sell. But the match isn’t always automatic.
You may need an extra-long settlement, early access or financing, while vendors can come with a whole range of expectations, fuelled by their own desires and the influence of their agents (who are often just looking for a quick sale so they can get their commission).
However, our job as property developers is to dive deeper and understand the true needs of the vendor. If we can figure out their primary concerns, their absolute must-haves, we should be able to get rid of any roadblocks and move forward with a successful transaction.
So today I’m going to take you through the most common problems faced by vendors, and how we can provide win-win solutions.
It’s all about getting to a vendor’s core drivers.
Many vendors kick off the selling process with a laundry list of wants, and while money is obviously on the list, it’s not always the maximum dollars that will lock in a sale.
As property developers, our role is to move beyond the asking price to uncover the seller’s biggest concerns or most pressing problems. Each vendor's circumstances vary, and understanding their unique situation is crucial.
Get to know your vendor
To truly grasp the vendor’s needs, we’ve got to take the time to know them on a personal level. This means shifting the focus away from ourselves and making it all about them.
Ask questions that go beyond the property. Ask them why they’re selling and what their future plans are. Find out if they know where they want to move to, and whether they can afford their desired location. Maybe the vendor’s kids have moved out of home and they’re looking to downsize or maybe the property is too much work and they want to buy something new.
By building a genuine connection, you’ve got a better chance of uncovering opportunities to align their needs with what we can bring to the table.
Certainty
Sometimes all a vendor wants, especially in a downtrend, is certainty. They’re looking for reassurance that a sale will take place at the time and price that’s been agreed. If it’s certainty they’re looking for, they may not be interested in an option over their property, which may or may not be exercised, and they’re probably not going to be interested in a profit split of a development that could take many months to completion.
Time
There are a whole bunch of reasons a vendor might be baulking at a sale, but one I come across a lot is a vendor that hasn’t yet found their new home.
Maybe they know where they’d like to go, but they’re struggling to locate the perfect property that meets their requirements.
As property developers, we might be able to leverage our expertise to offer a tailored solution, perhaps building a property that matches their requirements.
On the other hand, maybe the vendor knows exactly what they want and where, but their budget won’t cover their dream house.
In other cases, the vendor is keen to move but they really doesn’t know where to move to.
Another common situation is a vendor who has bought their next home but there’s a delayed settlement or it’s under construction so they’re not ready to move yet.
In all of these scenarios, what the vendor really needs is more time. And in a lot of cases, time is also exactly what
I need to get my deal over the line.
So all that’s left to do is come to an arrangement where the vendor can stay on in their property for an agreed period of time while you get the ball rolling on your development plans.
Your solicitor can help you nut out the detail.
Quick cash
Sometimes a vendor needs a speedy cash injection to overcome some kind of financial dilemma. Maybe they’ve got an outstanding tax bill, a health crisis or family that needs support.
They might need assistance with mortgage payments or to resolve credit issues.
Your ability to cough up quick cash in these situations will depend on your own financial circumstances.
A vendor may only need a portion of the sale price up front, to cover a fixed expense, or they may need the full payment up front with a quick turn-around. In the latter scenario, you might be able to negotiate a discounted price for a speedy settlement.
As a property developer, you need to become a champion problem solver.
Our chance of getting a sale over the line relies on understanding the true needs of vendors and crafting solutions that address their concerns.
By building genuine connections, identifying roadblocks, and tailoring our offerings accordingly, we can facilitate smooth transactions that satisfy both parties.
Ultimately, the key to getting a vendor on board with your development plans is to shift the focus from your interests to the vendors' needs.
Do it right and you’ll be able to create a mutually beneficial outcome.
You may need an extra-long settlement, early access or financing, while vendors can come with a whole range of expectations, fuelled by their own desires and the influence of their agents (who are often just looking for a quick sale so they can get their commission).
However, our job as property developers is to dive deeper and understand the true needs of the vendor. If we can figure out their primary concerns, their absolute must-haves, we should be able to get rid of any roadblocks and move forward with a successful transaction.
So today I’m going to take you through the most common problems faced by vendors, and how we can provide win-win solutions.It’s all about getting to a vendor’s core drivers.
Many vendors kick off the selling process with a laundry list of wants, and while money is obviously on the list, it’s not always the maximum dollars that will lock in a sale.
As property developers, our role is to move beyond the asking price to uncover the seller’s biggest concerns or most pressing problems. Each vendor's circumstances vary, and understanding their unique situation is crucial.
Get to know your vendor
To truly grasp the vendor’s needs, we’ve got to take the time to know them on a personal level. This means shifting the focus away from ourselves and making it all about them.
Ask questions that go beyond the property. Ask them why they’re selling and what their future plans are. Find out if they know where they want to move to, and whether they can afford their desired location. Maybe the vendor’s kids have moved out of home and they’re looking to downsize or maybe the property is too much work and they want to buy something new.
By building a genuine connection, you’ve got a better chance of uncovering opportunities to align their needs with what we can bring to the table.
Certainty
Sometimes all a vendor wants, especially in a downtrend, is certainty. They’re looking for reassurance that a sale will take place at the time and price that’s been agreed. If it’s certainty they’re looking for, they may not be interested in an option over their property, which may or may not be exercised, and they’re probably not going to be interested in a profit split of a development that could take many months to completion.
Time
There are a whole bunch of reasons a vendor might be baulking at a sale, but one I come across a lot is a vendor that hasn’t yet found their new home.
Maybe they know where they’d like to go, but they’re struggling to locate the perfect property that meets their requirements.
As property developers, we might be able to leverage our expertise to offer a tailored solution, perhaps building a property that matches their requirements.On the other hand, maybe the vendor knows exactly what they want and where, but their budget won’t cover their dream house.
In other cases, the vendor is keen to move but they really doesn’t know where to move to.
Another common situation is a vendor who has bought their next home but there’s a delayed settlement or it’s under construction so they’re not ready to move yet.
In all of these scenarios, what the vendor really needs is more time. And in a lot of cases, time is also exactly what
I need to get my deal over the line.
So all that’s left to do is come to an arrangement where the vendor can stay on in their property for an agreed period of time while you get the ball rolling on your development plans.
Your solicitor can help you nut out the detail.
Quick cash
Sometimes a vendor needs a speedy cash injection to overcome some kind of financial dilemma. Maybe they’ve got an outstanding tax bill, a health crisis or family that needs support.
They might need assistance with mortgage payments or to resolve credit issues.
Your ability to cough up quick cash in these situations will depend on your own financial circumstances.
A vendor may only need a portion of the sale price up front, to cover a fixed expense, or they may need the full payment up front with a quick turn-around. In the latter scenario, you might be able to negotiate a discounted price for a speedy settlement.
As a property developer, you need to become a champion problem solver.
Our chance of getting a sale over the line relies on understanding the true needs of vendors and crafting solutions that address their concerns.
By building genuine connections, identifying roadblocks, and tailoring our offerings accordingly, we can facilitate smooth transactions that satisfy both parties.
Ultimately, the key to getting a vendor on board with your development plans is to shift the focus from your interests to the vendors' needs.
Do it right and you’ll be able to create a mutually beneficial outcome.
