Part II: Mastering the Art of Negotiation.
A lot of people view property buying in black and white, in that they’ll look online and assume the perfect property will just magically appear at the right price. The reality of course is that great deals are made and do not simply manifest. Identifying a property is one thing, but negotiating the best price and terms requires proactive strategy, research, relationships, applied knowledge and above all perseverance.
Expert buyers’ agents, will leverage both professional tools and relationships to access data, so before we even consider a property, we’ve thoroughly researched it, understood its values based on comparable sales, land, the dwelling itself and importantly the true underlying potential. Once we’ve established an opportunity we move forward, creating an acquisition strategy and negotiating the deal that ultimately ends up becoming the perfect home or investment for our client.
To commence negotiating it is crucial you are viewed as a serious buyer, so upon entering an open home, there are two things you can do to ensure the sales agent takes you seriously and keeps you in the loop; the first is to appear positive and qualified, by asking questions which demonstrate you are keen and clear on what you are after and most importantly that you are ready to go and in the financial position to make a deal happen.. The second is simply to request a contract. Contract holders are often given preferential treatment, due to being considered genuinely interested and therefore almost always the first to be notified of any important changes in circumstances i.e. price adjustments or offers by other parties.
When it comes time to put in an offer, keep it simple. Superfluous conditions you may think are designed to protect you; in reality are often unnecessary hindrances, particularly in a competitive market. So keep only what is absolutely necessary and for everything else plan ahead so all expendable stipulations can be removed. Ultimately all parties want to do a deal, so by making your offer as clean as possible, by showing you have completed or are able to expedite your due diligence, such as having the contract reviewed by a conveyancer or organising a building and pest inspection, you will remove barriers, and make it as easy as possible for the agent and vendor to accept the points that most matter, your price and terms.
Once you understand the primary motivation for selling and the vendor and agents best alternative to your offer, you can then secure a favourable position against other buyers by fine tuning terms and adding in low cost yet high value incentives to both the agent and vendor. Simple ways to incentivise an offer include; being flexible with settlement terms, often the sooner the better. If you have a property to sell also or intend to use the purchase as an investment, then letting the agent know you will consider their services in this regard will almost always garner their favour and increase the likely hood of them conditioning the vendor towards your offer.
The definition of a successful negotiation is “to secure a favourable outcome whilst minimally satisfying the interests of the opposing party”. With this in mind, in the final part of mastering the art of negotiation, we discuss how to create the path of least resistance to having your offer accepted.