Case Study - November 2005

We love those win-win solutions!

This month′s case study is a great demonstration of persistence and thinking outside the square.

After finalising our research brief with one of our new clients, Investment House sent them information on three great sites that we thought fitted all their needs. After a few hours, we had a call back from them and they said they would take any one of the three - the clients loved all three sites. That made our job very easy. Our Research Manger jumped on the phone and called the agents of the three sites (two of the sites were with one agent).

Our research Manager told both agents that the clients had liked three sites and were only in a position to buy one. The first vendor that wanted to sell would get the sale. Now we thought that the agents would jump through hoops to get the sale - they had a hot buyer who was ready to sign a contract and since our Research Manger call them early in the day we assumed they could probably still get on the first plane to Hawaii if they wrapped up the deal by 4:00pm.

However, all our plotting was to no avail. Both agents called up a few hours later and said that the vendors did not want to sell at the price we had offered – no trip to Hawaii for the agents… We therefore, went back to our clients and explained the situation. They were not fazed and said lets see what happens over the next few days. Well, what happened over the next few days was a lot of plotting and scheming by our Research team.

On one of the sites the agent had told us that the vendors had decided to complete the council approval and sub-divide the blocks. After several phone calls back and forth we were also told that the vendor had already paid the council contributions of $10,000 (which the agent had failed to mention on our first offers) and that the vendor had already organised for the house that was currently sitting on the site to be demolished and all site rubbish removed. Now our final offer of $420,000 was rejected (they wanted $470,000) however our Research team put together a new offer based on the new information. We played with our numbers and even increased the settlement period and were able to offer $455,000 for the site. And that was a lot closer to their asking price. More importantly, the vendor did not have to go through all the work of sub-dividing the land (and paying for all the operational works including sewerage and water) and “maybe” sell the 2 blocks once the full subdivision went through.

Therefore, we placed a new offer and once again after several phone calls got the deal. Our clients basically got the same deal at $455,000 as they would if they bought the site for $420,000. The vendor had basically “paid” for all of the costs upfront for the client by paying for the council contributions, removing the house and allowing us to finalise the drawings with an extra month of settlement time. Lots of plotting and plenty of money…