Negotiating and submitting the offer

So you've found a property and you're ready to negotiate - great! This is where you can start to get creative. Real estate is quite unique in that you can include just about anything you want in the negotiations. I've seen used cars, canvas awnings, furniture and all sorts of items included in property contracts. Your ability to write just about anything you want into a real estate contract is one of the most overlooked and underrated advantages of investing in property. Here are four concepts I usually incorporate as my part of my negotiations with the seller of the property:

1. Do not always write up the contract in your own name. There are many ownership structures you can use to acquire properties. You can acquire it in your own name, a company, a family trust, a partnership or as joint owners. Since I may not know what the best entity will be for a new acquisition, I usually sign my contracts 'As Nominee'. This gives me the legal leeway to buy it in my own name, or to assign the contract to anyone else of my choosing, or an entity.

2. Since I am always trying to acquire properties with as little cash as possible, I need to make sure that I can negotiate not only a good price to buy the property, but also a good mortgage. Hence I usually put in the following clause:

   This contract is expressly subject to and conditional upon the purchaser arranging financing suitable to himself, such financing to be confirmed within 21 working days from the date of signing of this contract.

   The words "suitable to himself" are crucial, as otherwise, if you cannot find financing on reasonable terms (such as at market interest rates), the seller may say to you that he will provide financing for the entire purchase price at 65 percent interest per annum and since you now have financing arranged, you could be obliged to proceed with the deal.

3. Another clause I often add gives me a legal out in case we find something wrong with the property:

   This contract is expressly subject to and conditional upon the purchaser's solicitor's approval as to title, encumbrances, liens, easements and any other regulatory impositions that may relate to the subject property, such approval to be given in writing by the purchaser's solicitor to the seller's solicitor by no later than 5pm on the 20th working day after the signing of this contract.

   Many standard contracts used in various parts of the world already include variations on this theme, but it pays to make sure that you are covered.

4. Depending on what you are trying to achieve and how prolific you are in a particular market, there may be advantages in having a secrecy clause in your contract, so that only the people you are negotiating with on any particular deal get to know about that deal until everything is signed, sealed and delivered.

Now let's talk about actually submitting the offer. There is a tactic you can use to make your offer incredibly seductive to the seller (this tactic works particularly well when your offer is for less than the asking price). To greatly increase the chances of your offer being accepted simply staple a cheque for the deposit to the contract! The seller knows you are serious. He knows that if he countersigns he can bank the cheque immediately. I know from having applied this tactic countless times that it becomes a very persuasive element in the seller's decision as to whether or not to accept your offer.