As a buyer’s agent in the Byron Bay real estate market I have been in the middle of hundreds of property sales. There may be no right way to do it but over the years I have stumbled on a few things that can assist the process.
1. Don’t be emotional
Buying my own property, I know I let my emotions, ego, hopes and fears, stress and over confidence interfere. It can be emotional buying your own home, an investment property has different emotions at play, but best to be clear headed. Buyers, as well as sellers, are often too emotional and that often gets in the way of an unencumbered outcome.
2. Get all the information
It remains unemotional when you are fully armed with the facts. A negotiation should be a simple process: the seller wants x dollars, the buyer only wants to pay y dollars. But it becomes more complicated with a myriad of factors to consider: How long has it been on the market? Have there been any offers or other interested parties? Why are they selling? Is there anything scary in the pest and building inspection report? Is the buyers finance intact? Is there a lease and will we get vacant possession? What is the settlement period? You need to process and weigh up a lot of this information prior to, or during, the negotiation process.
3. Don’t be adversarial
Being pushy and dismissive is counterproductive. Making a gambit offer way below the asking price is often a bad idea. You are basically insulting the owner and this puts them off side. Even if your vendor is in a bind and the property can be bought under value it is still not the best approach to have a “take it or leave it” attitude. A good negotiation is building a relationship.
4. Enlist the agent
There is an obvious weakness in the whole real estate business model: the listing agent is being paid by the vendor but acts as if he is working for the buyer. This subtle conflict of interest can be to your advantage by making the agent’s job as easy as you can. Show them you mean business and get from “offer accepted” to “exchange and settlement” as quickly as possible. It pays to get the selling agent onto your team instead of the vendor’s.
5. Know the market
Approach every negotiation dependent on the circumstances of the time. A buyer’s market is different to a sellers market, as is bidding for a multi-million dollar mansion compared to an entry level first home, vacant land compared to an apartment. Is the market on the rise or on the wane? Does this agency underquote or price properties too high?
Some of these questions or strategies may be too much for you. If that is the case do not be reticent to approach a buyers agent in your area. It may be more worthwhile (and less expensive) than you think. But not just any buyer’s agent – look for one that is accredited with REBAA: the Real Estate Buyers Agents Association of Australia. www.rebaa.com.au
And don’t forget, if you are looking for real estate in Byron Bay, I’m always happy to help.